Outgoing Sainsbury’s boss Justin King told MT that when he took over as CEO in 2004, the supermarket was struggling to provide a good service for its customers and even his family questioned his decision.
‘My mum had shopped with Sainsbury’s all her life and there were 14 million others like her shopping in Sainsbury’s every week in 2004,’ he said at the MT Live conference in central London recently.
'But we were not doing a good job for them. Our availability was not where it needed to be, our prices not as sharp, our quality hadn’t kept ahead of the competition. My mum knew that but she was still loyal...We’ve given that back and 24 million now shop at Sainsbury’s every week. So it’s for my mum but 24 million others too.’
He added that when he first told his mum he was moving from M&S to Sainsbury’s, her response was: 'Are you sure darling? I shop there every week and it's shit.’
Justin King will step down as CEO after Sainsbury’s annual general meeting today. During his 10 years in the role, he has grown customer numbers from 14 million to 24 million a week, added £10bn of extra sales and boosted annual profit from £254m to £798m.
At the AGM, chairman David Tyler praised King for his financial success and for guiding the supermarket through an economic crisis. But he said King's departure 'doesn't mean the end of this success story...it's the closing of one chapter and the opening of another,' Tyler told shareholders this morning.
Like other major UK supermarkets, Sainsbury’s has had to fight to retain its market share as the popularity of discounters such as Lidl and Aldi has surged.
Recently, Sainsbury’s announced a joint venture with Danish discount grocery chain Netto to take on its discount rivals.
Speaking of the Netto trial stores which will open later this year, King said they will offer customers something new: ‘We’re going to give our customers a different kind of customer experience than the existing German brands in the UK. In years to come we’ll look at our joint venture with Netto in much the same way we do our convenience stores and our online business now – an important part of our growth.’
King also told the MT Live conference that customers are prepared to stand up to global companies which avoid paying tax in the UK.
‘Sainsbury's is the seventh-biggest taxpayer in the UK – and that’s not including the tax our employees pay. If we have to compete with businesses that do not contribute to our society in the same way, that's a consumer issue. The great thing is that consumers sort it.’
Meanwhile King remained tight lipped about his movements after Sainsbury’s: ‘I don’t intend to compete with Sainsbury’s. I have a non-compete clause which I’m very happy to honour, so I’m going to take some time to see what opportunities are on offer. I want to do another big job, I’ve said that. It’ll take me a bit of time to find something as exciting as Sainsbury’s.’
He will, however, allow himself one indulgence: ‘I’m going to see the World Cup final... I don’t care who’s playing in it, England are out so from here on in it doesn’t matter, but I want to watch 22 men in shorts, who don’t bite each other.’