LONDON: 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 No. 2 player behind Tesco.
King overhauled the 145-year-old retailer to achieve a 60 percent 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 Marks & Spencer.
“Coupe represents continuity for Sainsbury’s, something that may reassure investors who will naturally 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 percent at 346 pence at 1420 GMT after briefly falling by as much as 5.8 percent. It has gained 8 percent in the past year, while Tesco has dropped 10 percent in the same period as it suffered a run of poor results.
“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,” said Coupe.
Sainsbury said King would leave after its annual shareholder meeting on July 9.
Reuters
