Sainsbury’s CEO Coupe to stand down in May

Sainsbury’s has picked retail boss Simon Roberts to succeed CEO Mike Coupe, the architect of the British retailer’s failed bid for rival Asda who will step down in May after six years at the helm.

Roberts’ task will be to grow earnings in the face of weakening consumer demand and the relentless march of German-owned discounters Aldi and Lidl, which continue to win market share from Britain’s traditional big four grocers – market leader Tesco, Sainsbury’s, Asda and Morrisons .

Coupe, 59, has faced questions about his future since April when the Competition and Markets Authority blocked Sainsbury’s attempt to take over Walmart-owned Asda for £7.3 billion and become the country’s biggest retailer.

Sainsbury’s shares have fallen 25% over the last year, and were down 2.2% at 0940 GMT.

All eyes will now be on whether Roberts, 48, will adapt a strategy set out in September that was designed to show Sainsbury’s could prosper on its own.

That strategy focuses on cost cutting, paying off debt, investment in technology and further integrating the Argos general merchandise business Sainsbury’s purchased for 1.1 billion pounds in 2016.

Roberts, a former managing director of health and beauty retailer Boots, joined Sainsbury’s in 2017.

“Simon has been extremely effective during his three years at Sainsbury’s, leading our store teams through great change in that time,” said Chairman Martin Scicluna.

Roberts has re-built Sainsbury’s operating model in its supermarkets and convenience stores. He has invested in stores, implemented new leadership structures, standardised shop floor workers’ contracts and introduced more technology. That has driven efficiencies and improved product availability.

“I am really excited about working together with our 178,000 colleagues to become one multi brand, multi channel business,” said Roberts, whose base salary will be £875,000.

Sainsbury’s said Coupe would remain a director from June 1 until the annual shareholders’ meeting on July 2, at which point he will retire from the company he joined 15 years ago.

“This has been a very difficult decision for me personally,” said Coupe, whose total remuneration was £3.9 million in the 2018-19 year.

“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.”

Sainsbury’s profit is forecast to fall in its 2019-20 financial year.

While Coupe’s purchase of Argos was generally regarded as a big success, his tenure will likely be defined by the failure of the Asda transaction.

He will also be remembered for one of the most notable corporate gaffes of recent times.

He made unwanted headlines around the world shortly after the Asda deal was announced in May 2018 when he was caught on camera singing “We’re in the Money”. He apologised, saying he had been trying to compose himself before a television interview.

Roberts’ appointment means Britain’s two biggest supermarket groups will be run by Boots alumni.

Ken Murphy, a former joint chief operating officer at Boots UK & Ireland, will succeed Dave Lewis as CEO of Tesco in the summer. Murphy and Roberts are friends.

Before joining Sainsbury’s, Roberts was executive vice president of Walgreens Boots Alliance and president of its Boots unit. Prior to that, he was managing director of Boots UK, where he was responsible for leading retail and pharmacy activities in over 2,500 stores across the UK and Ireland.

Earlier in his career, Roberts spent 15 years at clothing and food retailer Marks & Spencer, where he had roles in stores and operations.

“He’s got a great pedigree,” said someone who has worked with Roberts.

The person said Coupe and Lewis represented the last generation of “command and control” supermarket group CEOs.

“You’ve now got two guys whose real skill set isn’t about knowing the answer to everything, their skill sets are being good guys that people want to work with…bringing the best out of others.”