5 reasons Sainsbury's chief executive Justin King will be a hard act to follow

As King takes his final bow at today's Sainsbury's AGM, here are the reasons his successor, Mike Coupe, could struggle to avoid Philip Clarke syndrome.

by Rachel Savage
Last Updated: 28 Apr 2015

It’s been an illustrious decade at the helm of Sainsbury’s for Justin King, who is facing shareholders for the very last time at the company’s AGM today. Success stories are inevitably hard to repeat, but here are five reasons King will be a particularly tricky act to follow for incoming boss Mike Coupe.

1.  The numbers

When it comes down to it, business is about making money and Justin King has definitely done well at generating more of it. His track record includes adding £10bn to annual sales, boosting weekly customer numbers from 14 million to 24 million and more than trebling yearly profit from £254m to £798m.

That kind of figure will be nigh on impossible to repeat in any circumstances - if a company has already been turned-around there isn’t any need for that to happen all over again. But with like-for-like sales slipping for two consecutive quarters after nine years of unbroken growth, Coupe has a job on his hands if he’s going to get those numbers climbing again.

2.  The competition

As those sliding sales show, Sainsbury’s has not been immune to the challenge of German discounters Aldi and Lidl, who are eating away at the market share of all the ‘Big Four’ supermarkets (Tesco, Sainsbury’s, Asda and Morrisons). Sainsbury’s did well under King in part by emphasising differentiating factors such as freshness. As customers look more to their wallets, that weapon may not be the most effective choice of those in Coupe’s declining arsenal. At least the joint venture with Danish discounter, Netto, looks like a good parting gift from King.

3.  The timing

As the supermarket price wars really get going, with Tesco and Morrisons in particular floundering as they try to fend off the Germans (they’re not doing quite as badly as Brazil did, but then that’s not hard), it is rather convenient for King to be getting out now.

While there is unlikely to be a Fresh ‘n’ Easy-style bombshell waiting to explode on Coupe, as happened to Philip Clarke when he took over from Sir Terry Leahy at Tesco, those aforementioned declining sales aren’t exactly the best way to start his time at the top.

4.  The communication

King didn’t win MT’s coveted Britain’s Most Admired Leader award for nothing. Aside from that enviable growth he presided over, King is known for being an excellent communicator. One of his first acts as chief exec was introducing ‘Tell Justin’, to give Sainsbury’s staff, who were demoralised and unmotivated when he started back in 2004, the opportunity to suggest things to the big boss. King received over 65,000 suggestions in a decade and said back in 2012 that around 10% were taken up.

‘Message Mike’ could well be just as popular, but that comes with its own pitfalls. Anyone receiving a veritable avalanche of correspondence is going to struggle, especially when they’re settling into a new job.

5.  The comparison

Humans are, by and large, lazy beings. We like simple metaphors and handy shortcuts. So just as Clarke is compared with Leahy and Marc Bolland is measured up against Sir Stuart Rose, so Coupe will be judged against King, instead of on his own merits.

That’s not entirely unfair - he will be running the same business after all. But Coupe won’t be able to so much as sneeze without someone casting King’s shadow over him. The best advice MT can give Coupe is what King himself has said: ‘You’re in charge.’

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