Coupe not singing any more

THE first job of a new chairman is to decide if the chief executive has outlived their usefulness. In the case of Mike Coupe of grocer Sainsbury’s, that became obvious in April last year when the competition regulator effectively blocked the proposed merger with Walmart-owned Asda.

Everything about the deal looked wrong from the day it started. It was an old pals’ act, with Coupe and Asda chief Roger Burnley former colleagues – never the best basis for a deal.

Then Coupe made it even worse with his crass singing of ‘We’re in the Money’ in a warm-up for a media interview.

The bigger mistake was totally misjudging the regulatory issues, believing that the Competition and Markets Authority would put to one side the consumer interests, and accept Sainsbury’s arguments that the grocery market was changing sufficiently fast, because of digital shopping, to wave the deal through.

It was clear from the outset that going from four big supermarket chains to three was always going to diminish choice and leave the remaining players more pricing power whatever the promises made about lower prices on a mysterious basket of goods. As critically, the impact on smaller suppliers would have been detrimental.

Sainsbury’s competition law advisers Linklater shored up confidence with an overconfident analysis of how the regulatory position had changed. What a waste of shareholder funds.

This is not to say that nothing good came during Coupe’s six-year sojourn at the top. He recognised changing consumer habits and rolled out neighbourhood stores.

He tidied up the company’s relationship with Nectar, its gift point supplier, by buying in the brand.

And he recognised the value accretion in terms of logistics, non-food market penetration and credit book in Argos. He pressed the button hard on integration.

A clue to the actual circumstances of Coupe’s departure comes from the firm’s press release. Chairman Martin Scicluna is so over the top in his praise of the leaving CEO that one might believe that the company was losing a figure of biblical stature rather than someone who has struggled to hang on to market share in admittedly tough trading conditions.

Successor Simon Roberts will face much the same Lidl, Aldi, Ocado, Just Eat and Amazon challenge.

Three decades in retail, starting at the bottom at Marks and Spencer at 16 years old, should help restrain him from wasteful flights of fantasy.

Early spring

THE Bank of England doves seeking an early cut in interest rates may wish they held their fire.

The post- election data sets (with the exception of the High Street) show a nation quick to put Brexit tensions behind it.

The parliamentarians who thought they were acting in the national interest in holding up various iterations of a deal were engaged in an act of self-harm. Many lost their seats and the economy and business lost momentum.

Data shows an economy steaming back to life. Employment in the three months to November recorded its biggest rise since 2015. The pro-Remain CBI reports a sixyear high in manufacturing optimism.

The business investment leap forward anticipated by the Bank looks to be arriving with intentions soaring from minus-44pc rating in October to plus-5pc in the January survey. Finally, some of the £750bn of cash sitting on the balance sheets of corporate Britain could be unlocked.

In spite of Brexit uncertainty the service sector looks as it is still going to be the rapier for global Britain.

In the third quarter the surplus widened to £24bn. Over the period the UK exported £49.1bn to non-EU countries against £33bn to the EU and the US retained its lead as Britain’s most important trading partner for services.

And, by the way, after a year of overshoots the public finances are starting to look better ahead of the budget.

Who would have thought?

Audit shambles

START poking around under the bonnet of corporate accounts and heaven knows what you will find.

After all the shocks at Patisserie Valerie last year Deloitte has discovered that hipster fashion outfit Ted Baker overstated the stock on its balance sheet by £58m. That’s more than twice the £ 25m originally announced to the stock market.

The case for the Government getting on with the audit reforms proposed by Sir Donald Brydon and Sir John Kingman is overwhelming.

Endless reviews and delay should not be an option.