…But will the M& S man and Sir Peter be able to steer Sainsbury on a course for growth? Sean McAllister reports
When Justin King sails into Sainsbury’s HQ in Holborn on March 29 next year, he will no doubt be expected to map out his strategy for growing sales at the business. King almost certainly has a few ideas already. But when The Grocer spoke to the M& S food boss earlier this week, just as he was heading off on his gardening leave, he was giving nothing away.
Instead, King joked that he would be using some of his time off to enjoy his sport. He’s a huge fan of sailing and skiing - so the next few months may well include a trip to his favourite ski resort in Canada.
This love of sport is one sign of King’s highly competitive nature. He’s also very ambitious, as he readily admitted to The Grocer back in September 2001 in his first major interview at M&S, although he said he was not ambitious in the conventional sense. “My ambition is to be successful and win at whatever I am doing. But I would like to do it in a way that does not leave a lot of detritus in my wake. Ambitious people tend to be self-serving. I hope people would say I am collective and collaborative.”
So what do other people say about him? Boots chief executive Richard Baker, a close friend and former colleague at Mars and Asda, says King is the best man for the Sainsbury job. “He’s bright, courageous and one of the business people I most enjoy having a pint with,” says Baker.
And King’s new boss, Sir Peter Davis, tells The Grocer his incoming chief executive is strategic in his thinking but also good on an operations level. He also has good communication skills and leadership and plenty of energy, which will be vital in what Sir Peter says is a physically demanding role.
Sir Peter says King is the ideal candidate as he brings a wide experience of the food industry through his stints with Mars, Pepsi and Häagen-Dazs, but, more important, a food retail experience covering both ends of the market - value-orientated Asda and quality-focused M&S. “Justin identifies with our trading strengths and, in an increasingly competitive market, has the talent and experience to drive our business forward on a greatly modernised and improved infrastructure,” Sir Peter says.
King started his career with Mars in the early 1980s and held positions first in production and then sales working with Allan Leighton. After a brief spell with Pepsi in 1990, he spent three years as md of Häagen-Dazs and was responsible for the UK launch of the premium ice cream brand. But he had always harboured a desire to work for a retailer and hooked up with his old Mars colleague Leighton at Asda.
“I believed then, and still do, that people who have experience of both retail and manufacturing are best equipped to work in this industry,” King told The Grocer.
He spent seven years at Asda in a number of roles including deputy trading director and MD of its hypermarkets division. King’s ambition was to run a “decent-sized business” but, with a young family, he was not turned on by the idea of taking on an international opportunity with Wal-Mart in one of the “less sexy parts of the world”.
So when, in 2000, M&S came calling for him to head up its food division, King immediately grabbed the opportunity. In his 33 months at M&S he has achieved healthy growth in the food division and overseen the rapid expansion of the Simply Food c-store format - an experience some City analysts say will be valuable to Sainsbury’s continued rollout of its convenience stores.
But why did he leave a role that he has described as the best job in food in the UK?
Well an annual paypacket of £675,000 - more than double the £300,000 he was on at M&S - plus bonuses and benefits that will take the total to about £1m a year will surely have tempted him. Sainsbury even sweetened the deal by agreeing to compensate him for losses arising from M&S share and bonus schemes in the form of shares totalling £685,000.
Money aside, King will also have relished the challenge of helping Sainsbury rebuild its top line growth. A formative work experience in the British car industry of the 1980s, at Lucas, taught him “never to work for a business going backwards. It’s just too painful” - so we can assume he must see potential in taking the food giant forward.
But it will not be plain sailing for Sainsbury’s new chief executive. For starters, becoming chief executive of a FTSE 100 company is a big step up for King. Sir Peter acknowledges that, but says King clearly has the potential to take that step.
Then there’s the concern within the City that King will not have the remit to alter Sainsbury’s strategy, particularly with Sir Peter hovering over him as the new chairman. Sir Peter regards such speculation as “rubbish” and says King will be in charge. “I’ll be there long enough to help but not too long to be in his way,” Sir Peter tells The Grocer. He says Sainsbury has a broad direction to drive quality and roll back prices, but King will fill in all the details. “It works according to plan. I ease off. Justin does the running. And I can help when needed.”
Arguably, King’s biggest challenge will be finding the right formula for growing sales.
Some analysts say there’s no need for King to bring radical ideas. “The radical phase at Sainsbury has already been happening,” says one. “People will look to King to start a phase of top line growth and a reversal of market share attrition.”
The consensus among analysts is that King must focus on the front end - the customer - and turn Sir Peter’s restructuring and cost savings into sales growth.
As King says: “You win by doing what you are good at and not trying to do something else.” The trick, say analysts, will be defining exactly what Sainsbury is good at.