He will be replaced by the current Retail and Operations Director, Simon Roberts. The 48 year-old Roberts joined Sainsbury’s in July 2017 from Boots where he worked for 13 years and became president. He has also worked at Marks & Spencer (MKS) and boasts over 30 years retail experience.
The shares were marked down 2% to 208p on the news.
Coupe says: ‘This has been a very difficult decision for me personally. 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.’
Coupe hasn’t been short of ambition as demonstrated by the company acquiring and integrating Argos, but the failed attempt to merge with Asda was a step too far and probably distracted management at a crucial time for the business.
Russ Mould, investment director at AJ Bell says: ‘Farewell, Mike Coupe, the deal-hungry Sainsbury’s boss who 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 and partner with Danish retailer Netto in the UK.’
At the capital markets day last September the new course for the business was laid-out and involves a mixture of improvement in grocery value, capital discipline, cost reduction and doubling down on its digital strategy to create ‘one multi-brand, multi-channel business.’
The financial goal is to reduce costs by around £500m over the next five years and get the cost to income ratio below 50%, while achieving double-digit returns on capital employed.
Future growth will be driven by adding a further 110 Sainsbury’s locals, around 80 Argos in Sainsbury stores and 10 new supermarkets. These actions are expected to deliver an incremental £120m of profit over the next five years.
Broker Shore capital reckons that the strategy set out by Mike Coupe is ‘pragmatic, realistic and sensible, if dull for growth investors.’
‘As such we would expect Mr. Roberts to represent strategic continuity for the foreseeable future.’
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