And so The King’s farewell tour has come to an end.
After a rapturous send off at Sainsbury’s AGM this morning, Justin King officially handed over the reins to Mike Coupe after a decade in the hot seat.
In scenes more befitting to a pop star than a retiring CEO, King was besieged by shareholders and staff for autographs and selfies after the event in London.
The glowing tributes paid to King and regular bursts of applause were testament to the regard held in the room for the job he has done in dragging the supermarket into the modern age. But the depth of praise also points to the extent of the challenge new CEO Coupe faces to fill the void left by the exit of the business’ charismatic leader.
The message coming from Sainsbury’s since the announcement of King’s departure in January has unwaveringly been one of continuity and “more of the same”.
Today’s AGM was no different – in his final address to shareholders, King said: “I hope you are investors in Sainsbury’s because you agree our own brand and values are our key point of difference – and that’s a point of difference that is sustainable in the longer term.
“I know I leave it [Sainsbury’s] in safe hands and I know you’ll continue to enjoy being shareholders in this company.”
Coupe was on exactly the same page, commenting: “It is an honour and privilege, to take over the leadership of a company that you [King] have led with such courage and inspiration for the past 10 years. I am proud to be given the opportunity to build on the legacy you have left us.”
Although the “business as usual” narrative will be of comfort to those wary of change to a successful formula, it also effectively ratchets up pressure on the King-less board to continue “performance as usual”.
There is also the sense that King may have picked a good time to step down.
Sainsbury’s is not experiencing quite the same performance pressures as Tesco and Morrisons, but its 1.1% fall in first quarter like-for-like sales (excluding petrol) announced last month shows that the retailer is far from immune to the rapidly changing market.
Sainsbury’s remains confident of a 0.2% rise in full year like-for-like sales and pressure will immediately come on Coupe and the board sales fail to return to positive territory (though Sainsbury’s quarterly year-on-year comparatives will become less tough in Q3 and Q4).
It’s certainly true that following in the footsteps of charismatic front men can be fraught with difficulties – think Sir Stuart Rose or Sir Terry Leahy – even if the seeds of a downturn were arguably sown during their tenure. Former CEOs who have presided over long-term growth and success have built up a huge amount of credit in the bank so blaming the new guy for any trading woes seems the easier course of action.
When King came in a decade ago Sainsbury’s was effectively on its knees – Coupe has a considerably less blank slate.
Chairman David Tyler told shareholders of the £10bn of incremental sales achieved in King’s time and the total shareholder return of 85% in the decade since his arrival.
Life president Lord Sainsbury of Preston Candover joined in the plaudits, thanking King for his “hard work and inspiration in turning around and making Sainsbury’s great again.”
No pressure then, Mike…
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