SAINSBURY’S chief executive Justin King is to step down after ten years at the helm, having overseen nine years of consecutive growth and restored the company’s status as Britain’s second largest supermarket chain.
King will step down at the company’s annual general meeting in July, when he will be replaced by Sainsbury’s commercial director Mike Coupe.
Chairman David Tyler yesterday paid tribute to King, describing him as an “inspirational leader” who has helped lead one of the most striking turnarounds by a British company.
“In 2004, when he joined, Sainsbury’s was close to being on its knees, its shelves were often unstocked, morale was at rock bottom, market share was falling and profits were wholly inadequate,” he said.
“From the moment he joined Justin was clearly on a mission,” he added.
Sainsbury’s had been in decline for years when King joined and was losing ground to rivals Tesco and Asda who were gaining new customers through new tactics such as loyalty cards, which Sainsbury’s was slow to adopt.
Among King’s achievements has been to build new businesses in online and in the convenience market as well as to launch Sainsbury’s Bank, which it took full ownership from Lloyds this year.
Profits have almost trebled since he joined and the company has added £9.5bn of incremental sales.
King waived his entitlement to a cash severance payout worth up to £1.7m and will not receive an annual bonus or share award for 2014-15, the group said.
However, he will still be eligible for his bonus and share awards from the 2013-14 year and share vested in prior years, subject to performance.
Analysts welcomed Coupe’s appointment but said King’s departure also raised questions as to how it will defend profits in the face of a tough retail environment and growing challenge from discount retailers such as Lidl.
But Coupe said he was prepared to take on the challenge. “It’s very much business as usual but equally we have to accept that the dynamics of the market are changing and, as we look forward, we may need to change some things.”
King said rumours linking him to a possible move to Formula One were “entirely speculation”, adding that a non-compete clause also barred him from joining another major grocer for a year.
“I am still a relatively young man and I am sure when the right opportunity comes along I’ll know it when I see it. There is plenty of energy left in the old dog yet,” he said.
PROFILE: Justin King
KING steps down after nearly ten years at Sainsbury’s having joined the firm as chief executive officer (CEO) back in 2004. His time in the role will finish this July, after his final annual shareholders’ meeting.
His departure has been rumoured for some time, but last year King told reporters that suggestions that he would leave were premature. He is credited with turning Sainsbury’s fortunes around, taking command of a declining brand and returning it to success.
Previously, 52-year old King was Marks and Spencer’s director of food from 2001, and had previously worked for Grand Metropolitan and helped to introduced Haagen Dazs to the UK market.
In the last quarter of 2013, Kantar Worldpanel say that Sainsbury’s were the only UK supermarket to expand their share of the sector, growing to 17.1 per cent of the UK market. By the same figures, Sainsbury’s is the third largest supermarket chain in the UK, behind Tesco’s 30.5 per cent market share and only narrowly smaller than Asda’s 17.3 per cent.
King has not yet announced his plans for professional life after Sainsbury’s. Announcing his departure, he said: “It is the 157,000 colleagues that make Sainsbury’s so special and I would like to thank them for their amazing efforts over the last decade in making Sainsbury’s great again.”