Coupe, who succeeded previous boss Justin King in July, pledged “there will be no stone unturned” as he examines every aspect of the business following a further drop in quarterly sales.
The supermarket chain, which is battling with rival Asda for second place behind embattled market leader Tesco, saw like-for-like sales fall by 2.8 per cent in the second quarter and 2.1 per cent for the first half. It warned of a similar decline over the final six months of its financial year, having previously pencilled in growth of 0.2 per cent.
Sainsbury’s is facing a “perfect storm” of customers shopping around and falling food prices amid the ongoing grocery sector price war, Coupe said.
He added: “Customers have more choice today than they have ever had and they are shopping around more than they have ever done. There is top spin added to that by the fact that there is price deflation for the first time in a generation.”
Coupe insisted he was “100 per cent confident” in the firm’s accounting practices relating to suppliers after a £250 million overstatement of profit guidance by Tesco, which is being probed by the City watchdog.
The major chains are engaged in a desperate battle to counter the challenge posed by discounters Aldi and Lidl as the German pair gnaw at their market share.
James McGregor, director of consultancy Retail Remedy, said: “In recent years, Sainsbury’s has almost been observing the battle of the grocers from a privileged field position, but now it’s in the trenches with everyone else.
“Sainsbury’s is increasingly being caught in a pincer movement between the aggressive discounters and the higher-end grocers such as Waitrose.”
Shares in the group tumbled 17.5p, or 7 per cent, to 234p after it said it would assess its dividend payout as part of the wider review. Couple promised to give investors a “detailed” update when the group publishes its interim results on 12 November.
Chief financial officer John Rogers said: “If we are doing a full scale strategic review… you’d expect the dividend to be part of that full-scale review.”
Clive Black, an analyst at Shore Capital, said: “Whilst we may be over-aggressive here and we respect the strategic work that management is undertaking, we believe it sensible to create the expectation of a lower dividend pay-out in future from Sainsbury’s.”
Black downgraded his full-year dividend expectations to 11.25p a share, a cut of 35 per cent on the 17.3p paid out last year. He also slashed his annual pre-tax profit forecast by 17 per cent to £645m – well below the £798m figure that the grocer delivered for the year to March.