Sainsbury’s chairman David Tyler has warned that the grocer will face a tough challenge from discount rivals “for the foreseeable future” as he heaped praise on former boss Justin King, who stepped down yesterday after ten years at the helm.
Life president Lord Sainsbury of Preston Candover led the tributes to King, telling shareholders at the group’s annual meeting that his “hard work and inspiration” had turned the business around over the past decade.
King, who joined the supermarket when it was in disarray in 2004, went on to notch up nine successive years of rising profits. He has been succeeded by Mike Coupe, previously group commercial director.
There was laughter at a question from a shareholder called Philip Clarke – the same name as the Tesco chief who has overseen falling sales and profits since replacing long-serving predecessor Sir Terry Leahy.
He said: “I am very sad to see Mr King go and I hope Mr Coupe doesn’t suffer the fortune my namesake has.”
Coupe told his former boss: “It is an honour and privilege to take over the leadership of the company you have led with such courage and inspiration over the past ten years, and I am proud to be given the opportunity to build on the legacy you have given us.”
King oversaw 36 successive quarters of like-for-like sales growth as Sainsbury’s fought off the threat from discounters Aldi and Lidl, but the end of his tenure saw two quarters of decline as the grocery sector continued to be squeezed by cautious consumer spending.
Tyler said: “Despite some signs of economic recovery, the food retail sector is likely to be faced with a tough trading environment for the foreseeable future as customers continue to manage their budgets cautiously, and discounters grow their share of the market.”
In an attempt to beat the discount grocers at their own game, Sainsbury’s last month announced a surprise move to bring the Netto brand back to the UK through a joint venture with the Danish retailer’s parent, Dansk Supermarked.