Sainsbury's board reshuffle shines light on succession plans

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The Independent Online

Sainsbury's reshuffled its board yesterday to position the UK's third largest grocer for the "significant growth opportunities" ahead, but the move was also seen as having implications for its succession programme.

Darren Shapland, currently chief financial officer (CFO), will become group development director, and Mike Coupe, its trading director, will take on the role of group commercial director from 19 July. Both retain their seat on the main board. The grocer also named John Rogers, Sainsbury's property director, as CFO, and elevated him on to the top table from the operating board.

In addition, the supermarket chain has promoted Helen Buck, the business unit director, on to the operating board as convenience director for its 335 Sainsbury's Local shops.

The changes come at a testing time for Sainsbury's, which last week said its underlying sales growth in the first quarter had slowed markedly to 0.3 per cent. Like its grocery rivals, Sainsbury's is battling a fall in food price inflation and constrained spending from nervous consumers.

On the board changes, Justin King, the chief executive of Sainsbury's, said: "Sainsbury's today is a bigger business than it has ever been. The business now serves over 19 million customers weekly and has significant growth opportunities by accelerating our space expansion, growing the non-food business and developing new channels for our customers."

However, industry observers suggested the reshuffle was a sensible move for succession planning at Sainsbury's in the event that Mr King, who took the helm in 2004, eventually steps down. While there is no suggestion that Mr King is even considering such a move, it is seen as good management by all companies to address the issue.

Clive Black, an analyst at Shore Capital, said: "In terms of generating some internal competition and positioning Sainsbury's for a time when Justin King hangs up his boots, by giving Darren and Mike a broader role, plus the new CFO, it does all make sense."

He added: "The subtext to us is about retention and succession but, of course, they could appoint an external candidate [if Mr King should move on]."

As group development director, Mr Shapland, 43, will be in charge of ensuring that the grocer's "existing growth plans are realised" and will lead the delivery of future plans. He will also take responsibility for convenience, property, strategy and Sainsbury's Bank. Mr Shapland could eventually look at international expansion for the grocery. An industry source, who did not want to be named, said the wider remit given to Mr Shapland means the odds on him eventually becoming chief executive had probably "shortened".

Mr Coupe will assume responsibility for marketing in addition to his remit for trading, IT and online.

Before his current role of property director, Mr Rogers was director of group finance and director of corporate finance.

Ms Buck inherits a convenience business which will open between 75 and 100 new stores in 2010/11.

Overall, Sainsbury's will add 1.45 million square feet of new floor space, including new supermarkets and extensions this financial year – similar to the size of Netto in the UK which Asda acquired last month. Sainsbury's total sales, including petrol, grew by 7.6 per cent in the first quarter.