Sainsbury’s chief executive Justin King is to step down in July after ten years in which he has transformed the fortunes of Britain’s third-largest supermarket chain.
The move sees long-standing commercial director Mike Coupe replace King at the helm of the company, which commands a 17 per cent slice of the food retailing market, including about 50 big stores in Scotland.
It ends months of speculation that the 52-year-old boss was to depart, despite him claiming as recently as the autumn that he saw himself as a long-term player with the group.
David Tyler, Sainsbury’s chairman, hailed King’s “outstanding achievements” at the company. “Justin is a truly exceptional leader, who has reshaped Sainsbury’s during his ten years as chief executive, as well as playing a leading role in the sector and the wider business world,” Tyler said.
King commented: “This was not an easy decision for me to make, and in truth it will never feel like the right time to leave a company like Sainsbury’s.
“It has been a privilege to have led the company for the past ten years and I am incredibly proud of our achievements in that time. I am confident that under Mike’s leadership the business will go from strength to strength.”
During King’s tenure the group attracted an extra ten million customers a week, boosted sales from £16 billion in 2004 to £25.6bn in 2013, and lifted underlying profits from £254m to £756m.
Analysts said Sainsbury’s has resisted the pressure from discounters like Aldi and Lidl better than its rivals, recently striking its 36th straight quarter of like-for-like sales growth.
The transformation wrought by King followed a failed attempt to turn the grocery giant around between 2000 and 2004 by his predecessor, Sir Peter Davis, following a perceived period of drift in the 1990s when Tesco was increasingly dominant.
Tyler said today that Coupe, aged 53, was the “natural choice” to succeed King, having worked closely with the outgoing chief executive over the past decade.
Coupe, a former director of Iceland Food Stores and Asda, said: “It’s an absolute honour to be appointed as the new chief executive of Sainsbury’s in this, the company’s 145th year, and at a time when thanks to Justin’s leadership, we have been consistently outperforming the market.” King will step down at the group’s AGM on 10 July.
Coupe had been seen in the City as favourite to take the top job, leading the battle with Wal-Mart-owned Asda to be Britain’s second-biggest supermarket retailer after market leader Tesco. He will receive a basic salary of £900,000.
There has been speculation for some time that King could quit the op job at Sainsbury’s, with media reports linking him with a top post in Formula One motor racing.
One top-40 institutional investor in Sainsbury’s said today: “King’s decision isn’t a complete bolt from the blue. It has been rumoured a bit in the last couple of years. His successor has big shoes to fill and I suppose the million dollar question is what Justin decides to do next.”
Sainsbury’s, where sovereign wealth fund Qatar Holdings is the biggest investor, with a near-18 per cent stake, saw its shares close down 2.3 per cent at 348.5p.