£400m shares shock as Sainsbury’s chief quits
ALMOST £400million was wiped off the value of Sainsbury’s shares at one point yesterday after chief executive Justin King announced he is stepping down. Mr King, who has spent a decade at the supermarket’s helm, is credited with taking Sainsbury’s from strength to strength, despite the cost of living crisis that has hurt customers.
He is considered a retail success story and is now much sought-after, with speculation linking him with top jobs ranging from M&S to Formula 1.
During his tenure, the store’s profits have almost trebled to £756million, while sales have increased by 59 per cent. At the same time the number of customers visiting stores has risen by around ten million a week.
Recent success has been built around an expansion of the ‘Local’ convenience stores and promotions such as ‘Feed Your Family for a Fiver’.
Mr King, who was raised in Solihull, West Midlands, joined Sainsbury’s in March 2004 from Marks & Spencer, where he was head of the retail group’s food department.
The 52-year-old father of two enjoys the limelight and a flamboyant approach to public relations, which means always being ready to fight Sainsbury’s corner in TV and radio interviews. During his tenure, he has masterminded a successful commercial
‘Plenty of energy left in the old dog’
partnership with Jamie Oliver and, more recently, David Beckham.
He also made great play of a decision to ditch his Maserati Quattroporte, an £80,000 sports car, in favour of a ‘green’ Lexus limousine, at £88,000, for his commute to London.
The Manchester United fan, who lives near Leamington Spa, Warwickshire, has listed his recreations as coaching a village football team and sailing.
News of the departure of Mr King, who will step down in July, saw the firm’s share price drop by 5.8 per cent at one stage, taking the firm’s market value down by some £395million to £6.38billion.
At the end of the day’s trading shares were down by 2.3 per cent, equating to a fall in value of £156million. This drop signalled some concerns about the future of the UK’s joint second-largest supermarket.
Its market share is under threat from the budget chains Aldi and Lidl on one side and supermarket rivals Waitrose and Marks & Spencer on the other. At the same time, there is pressure from the likes of Tesco and Asda – and now Morrisons.
Independent retail analyst Nick Bubb said: ‘Supermarket retailing is getting a bit tougher and it’s understandable [King] wants to go out on a high note.’ Mr King has not lined up another job but said he felt young enough to take another ‘big one’, although a noncompete deal rules him out of taking a role with a rival grocery chain for 12 months. He said: ‘There’s plenty of energy left in the old dog yet. I’m sure the right opportunity will come along and I’ll know what it is when I see it.’
Mr King is being replaced by the firm’s commercial director, Mike Coupe, 53, a former director of Big Food Group and Iceland, who has been at Sainsbury’s for ten years. Analyst Clive Black said: ‘Coupe represents continuity for Sainsbury’s, something that may reassure investors who will naturally be a little disconcerted by change.’
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