Justin King insists Sainsbury's will not go the way of Tesco when he departs

 

Sainsbury's outgoing chief executive Justin King has insisted the supermarket will not unravel when he leaves – as Tesco did after Sir Terry Leahy's departure – despite revealing a second consecutive quarter of falling sales.

Mr King, who is being replaced by Sainsbury's commercial director Mike Coupe after 10 years at the helm, also attacked Sir Terry's Tesco legacy, saying the former boss's ambitions were only ever "short term". He said: "Let's draw attention to some of the key differences. Tesco was run by a team that didn't expect to be around in the long term, and that can lead to people thinking in the short term and not the long term.

"I'm handing over to someone who's been on the same journey as me for nine years. Mike has put in place his team for the future, which consists entirely of people who have been with the business previously. [At Tesco] there was massive change. By comparison, we've got continuity and me leaving is the only change."

The outspoken chief executive has also promised to give Mr Coupe time to settle in to the role, vowing to keep his opinions of the business to himself, unlike some former bosses of other supermarkets.

Last week, Sir Terry said he was disappointed with the current Tesco performance, while Sir Ken Morrison, the former boss of the Bradford-based supermarket, called the board's strategy "bullshit". Last year, Tesco's former chief executive Lord McLaurin also attacked Sir Terry publicly, saying he had "lost the plot".

But Mr King said: "I'll be entitled to attend AGMs because I'm a shareholder, but I intend to leave Sainsbury's on 9 July and I think the legacy of any leader is to give the team and new leader the space to run the business. So I have no intention to speak publicly on the trading."

His comments come as sales at the supermarket dropped 1.1 per cent in the three months to 7 June, the second fall in a row following 36 quarters of growth. Falling sales at larger stores were propped up by an 18 per cent boost in convenience store sales, while the company's website was also expanded to include its TU clothes range.

Low inflation, tough comparisons following last year's horsemeat scandal, and shoppers spending less caused the fall, according to the company.

But both Mr King and Mr Coupe disagreed with rival supermarkets' assessments that the rise of discounters Aldi and Lidl has created a structural change in shoppers' habits, leading to a price war.

Mr Coupe said: "What we're seeing is not unprecedented. It's much more about competitors letting prices slip and they're now playing catch up."

Mr King added: "Having the right price is necessary, but it's not the only important aspect. Customers are also concerned about quality and provenance."

He leaves Sainsbury's in a far better condition than when he joined a decade ago, but is keen to avoid the downfall suffered at Tesco following Sir Terry's departure. Tesco issued a profit warning, saw profits fall for the first time in 20 years, shut businesses in the US and Japan, and continues to lose customers after Sir Terry left.

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