Why Sainsbury’s chief Mike Coupe is stepping down
The executive aggressively cut costs to compete with Aldi and Lidl, but failed to acquire Asda
Sainsbury’s has announced that its chief executive Mike Coupe will step down in May after six years at the helm of the supermarket group.
Coupe, 59, will be replaced by Sainsbury’s head of retail and operations, Simon Roberts.
“This has been a very difficult decision for me personally,” said Coupe. “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.”
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
While he led the successful attempts at diversification with the 2016 acquisition of Argos and, in 2018, Nectar Loyalty Ltd, which runs Sainsbury’s Nectar card loyalty scheme, Coupe’s tenure has come to be indelibly marked by his failed attempt last April to purchase supermarket retailer Asda for £7.3bn.
The deal was blocked by the UK’s Competition and Markets Authority (CMA), and the consensus seems to be that, ultimately, it was this failure that cost Coupe his job.
Sainsbury’s share price has fallen 22% since the deal collapsed.
“Mr Coupe’s exit is hardly unexpected,” says the Financial Times. “Last year the UK’s trustbuster clipped his wings as it kiboshed Sainsbury’s plans to take over its rival, Asda. The failed tilt cost Sainsbury’s about £50m. Mr Coupe held on gamely as the recriminations followed.”
It was in response to the failure of that takeover that Sainsbury’s - the UK’s second largest supermarket chain - enacted an alternative business plan: step up efforts to reduce prices to outdo budget German chains Aldi and Lidl, and reduce costs by cutting jobs and integrating distribution, logistics, and supply chains with Argos.
–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues free–––––––––––––––––––––––––––––––
Only on Tuesday, Sainsbury’s announced plans to cut hundreds of management roles as part of that integration, while last week, the retailer was named the UK’s cheapest supermarket chain by Which? magazine.
Coupe has agreed to waive his bonus and share awards for the 2020-21 financial year, and will continue to receive his £962,000-a-year salary until he leaves.
Roberts, who is due to take over on 1 June, is the former president of retailer Boots UK, and will start on £875,000. “The fact that they’ve got a candidate to take over makes it seem much more like it’s been planned,” Maureen Hinton, a retail analyst at GlobalData, told the BBC.
Perhaps this is why the market responded relatively well to the news of Coupe’s exit - Sainsbury’s shares only fell by 2.2% to 208p in trading on Wednesday.
“Roberts’ task will be to grow earnings in the face of softening consumer demand and the relentless march of the German-owned discounters Aldi and Lidl, who continue to aggressively open new space and win market share,” says The Guardian.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
William Gritten is a London-born, New York-based strategist and writer focusing on politics and international affairs.
-
Today's political cartoons - October 13, 2024
Sunday's cartoons - the swing of things, fear of facts, and more
By The Week US Published
-
5 timely cartoons about climate change denial
Cartoons Artists take on textbook trouble, bizarre beliefs, and more
By The Week US Published
-
Kris Kristofferson: the free-spirited country music star who studied at Oxford
In the Spotlight The songwriter, singer and film-star has died aged 88
By The Week UK Published
-
Should supermarkets stop selling fireworks?
Speed Read Sainsbury’s bans the bangers from all of its stores in response to fears for pets
By James Ashford Last updated
-
Why the Sainsbury’s-Asda merger has been blocked
In Depth Competition authority says its concerns cannot be addressed
By The Week Staff Last updated
-
Asda-Sainsbury’s merger ‘should face competition probe’
Speed Read Opposition politicians fear thousands of workers could be laid off with customers left worse off
By The Week Staff Last updated
-
Sainsbury's shares suffer after dividend cut
In Depth Company reported lower profit but still managed to beat analyst expectations
By The Week Staff Published
-
Sainsbury's halts talks on Nisa buyout
In Depth Supermarket is waiting to see outcome of review of Tesco-Booker deal
By The Week Staff Last updated
-
Sainsbury's sales rise but Lidl and Aldi 'win Christmas battle'
In Depth Supermarkets report record sales for the Christmas period, with winners at both ends of the market
By The Week Staff Published