Justin King has stepped down as chief executive of Sainsbury’s after 10 years at the helm, claiming he wants to leave at the top and warning that he had seen too many chief executives stay on too long.
The 52-year-old will hand over the reins to the current commercial director Mike Coupe at the company’s annual meeting in July, having helped the chain regain its place as the UK’s second-biggest supermarket and record 36 consecutive quarters of like-for-like growth.
Mr King has waived a £1.7m pay-off he would have been entitled to, but could still receive a deferred share award worth around £3m, and is eligible for long-term share awards over the next few years.
He also walks away with a personal shareholding in the company worth £4.5m at today’s share price.
He said: “Succession is something we have been actively engaged in for the past three or four years. I believe transition doesn’t work if you leave it too late. I think a two-term presidency can be a very good thing in politics and I think it could work in business too. The decision was entirely mine. I’ve observed businesses where leaders have stayed too long.
“It’s not an easy decision to make. Emotionally I’ve invested 10 years of my life into this supermarket but part of the leadership is knowing the right time to step down and now is that time.
“I hope the judgement of history of my time at Sainsbury’s is that I leave it in a great place.”
The former Asda executive, who has also worked for Mars and advised the Government, said he has no plans for his future and has yet to talk with any other companies. Some have suggested he may want to go into politics, since he has been an outspoken critic of several key policies, including business rates, online taxes and internet giants using tax avoidance tactics.
He said he plans to move to a new career, but has yet to decide where he will look or in which sector. He added:“I think I’m a relatively young man. I’m sure the right opportunity will come along and I’ll know what it is when I see it.”
Mr King has been linked with the top job at Marks & Spencer, where the current chief executive, Marc Bolland, is under pressure. However, he said his contract stipulates that he cannot take on a job with any rival grocers, including M&S, for at least a year. He said he has been “definitely 100 per cent focused on my job at Sainsbury’s and have not talked to anyone about any job.”
Since joining Sainsbury’s in 2004 Mr King was tasked with saving the supermarket, which had previously been the biggest in the country.
Years of under-investment had left its stores shabby and staff demotivated. He rebranded the business and started winning back customers from Tesco, Asda and Morrisons. Sales have soared from £15.5bn in 2004 to £25.6bn last year, although profits have barely risen, with underlying pre-tax profits in 2003 at £675m, compared with £756m last year.
He joined when the current business model was arguably unsustainable and took a big hit in 2004/5, as profits plunged to £254m.