Justin King will step down as chief executive of British grocer J Sainsbury in July after a decade at the helm, with the company opting for continuity by choosing commercial director Mike Coupe as his successor.
Coupe (53), had been favourite to succeed the highly regarded King to lead a company battling with Wal-Mart Stores’ Asda to be Britain’s second-largest player behind Tesco.
King overhauled the 145-year-old retailer to achieve a 60 per cent increase in sales and a near-tripling of earnings.
While no major surprise, his exit raises the question of how his successor will defend profits in the face of stagnating household incomes and a two-pronged challenge from discount grocers Aldi and Lidl and upmarket food retailers Waitrose and M&S.
"Coupe represents continuity for Sainsbury's, something that may reassure investors who will be a little disconcerted by change," said Shore Capital analyst Clive Black, who maintained a "buy" recommendation on Sainsbury shares.
The stock was down 3 per cent at 346 pence in afternoon trading after the announcement. It has gained 8 per cent in the past year, while Tesco has dropped 10 per cent in the same period as it suffered a run of poor results. King will leave after its annual shareholder meeting on July 9th.
Chairman David Tyler praised King as an "inspirational leader" who effected one of the most striking turnarounds in recent British business history. As well as taking Sainsbury's to a decade-high grocery market share of 17 per cent, King built new businesses in clothing and general merchandise, powerful convenience and online operations and took the firm into financial services.
A former executive of Big Food Group, Iceland, Asda and Tesco, Coupe, like King, is a 10-year Sainsbury’s veteran. He will receive an annual salary of £900,000 as well as a beefed-up long-term incentives package. – (Reuters)
