Sainsbury’s has announced its chief executive Mike Coupe will retire from the supermarket group.
Mr Coupe has led Sainsbury’s for almost six years, during which time he oversaw a failed attempt to merge with rival supermarket Asda.
The head of Sainsbury’s retail and operations, Simon Roberts, will take over from Mr Coupe.
“This has been a very difficult decision for me personally,” Mr Coupe said.
“There is never a good time to move on, but as we and the industry continue to evolve, I believe now is the right time for me to hand over to my successor.”
Mr Coupe will step down as chief executive at the end of May and retire from Sainsbury’s in July.
His exit was announced a day after Sainsbury’s said it was cutting “hundreds” of management roles to reduce costs.
It said the cuts were largely due to its integration of Argos, the catalogue store that it bought in 2016.
Mr Roberts, who is due to take over on 1 June, has been involved in integrating Sainsbury’s and Argos. He was also the former president of retailer Boots UK.
In a statement, Mr Coupe said he was “confident” his chosen successor was “the right choice for our customers, our colleagues and our investors”.
Mr Coupe will continue to collect his £962,000 a year salary until he leaves. His successor will begin the role with a smaller £875,000 pay cheque.
‘We’re in the money’
Mr Coupe gained a reputation for being deal-hungry after he successfully led talks to buy Argos and Nectar, the loyalty-card scheme used by Sainsbury’s.
But other deals were less fruitful – most notably the proposed £12bn merger with Asda.
News of the deal sent the supermarket’s share price up by as much as 20% and Mr Coupe had appeared confident when it was announced in 2018.
He was even caught on camera singing “We’re in the money” ahead of a media interview to discuss the merger.
But Mr Coupe’s optimism was short-lived. And, in April last year, the UK competition regulator blocked the merger.
“Just when you thought being caught on camera singing ‘We’re in the money’ was a low point, the Asda merger subsequently didn’t happen and Coupe was left scrabbling for a plan B,” said Russ Mould, investment director at AJ Bell.
He said Mr Coupe “may unfortunately be remembered for his singing rather than retailing”.
“He did the dance with Argos and Nectar but tripped up with attempts to marry Asda,” he said.
In the past year, the value of Sainsbury’s shares has fallen by 22%. On Wednesday, its share price fell by 1.3% to 210p.
Mike Coupe took the reins at J Sainsbury at what should have been an auspicious moment.
A few months earlier Philip Clarke had been forced out as chief executive of Tesco, and Sainsbury’s biggest commercial rival was in upheaval. Not only had Mr Clarke’s chaotic reign left internal morale and profits at a low ebb, but there was a looming accounting scandal. All should have been set fair for Mr Coupe, but the reality was much tougher.
There was a new competitive threat in the shape of Aldi and Lidl, German-owned discounters that have steadily taken market share in the UK. Morrisons was beginning its revival, and once Dave Lewis was established at Tesco it quickly got back into its stride. Sainsbury’s was again in a fiercely competitive battle, squeezed by large mainstream rivals and upstart competitors.
Mr Coupe’s answer was to try to diversify the company’s sources of income, a plan that became real with the successful purchase of Argos. He then thought he could add scale through a merger with Asda. The time was right – Asda’s American owner, Walmart, was eager to sell, and the UK competition regulator had approved Tesco’s purchase of the wholesaler Booker.
A deal would have created a chain big enough to frighten Tesco, but Mr Coupe misjudged the situation. The Competition and Markets Authority rejected the tie-up in brutal fashion, leaving many investors wondering how the board could ever have thought it would go through.
From that moment the clock was ticking for Mr Coupe, and his departure is not a surprise. His successor, Simon Roberts, inherits the same basic problem – how to make Sainsbury’s stand out in the crowded middle ground of the UK grocery market.
Mr Coupe’s exit did not come as a shock to Maureen Hinton, a retail analyst at GlobalData.
She thought the timing had been planned to allow for a period of stability at the supermarket following the failed Asda deal.
“The fact that they’ve got a candidate to take over makes it seem much more like it’s been planned,” she told the BBC.
She said Sainsbury’s had probably timed the announcement to give customers, staff and investors a period of “stability” after the failure of the Asda tie-up.
She expected Mr Roberts would try to make further cost cuts and attract more shoppers, although she said some believed the grocery market was becoming saturated.
“There’s only so much we can eat,” she said.