Profile: Leader of the family pack: David Sainsbury has a surfeit of relatives minding his store, writes Patrick Hosking

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The Independent Online
MOST company chairmen can ignore their predecessors. They gaze down harmlessly from dusty portraits on the boardroom wall. David Sainsbury, super-rich philanthropist and since November chairman of the family grocery chain, has no such luxury.

A couple of floors above his office at the shabby headquarters of J Sainsbury on London's South Bank sit his uncle Alan, Lord Sainsbury of Drury Lane, 90; his father, Sir Robert Sainsbury, 86; and his cousin John, Lord Sainsbury of Preston Candover, 65.

They all have the title of president. They all turn up for work most days. They all have strong views on how to run the shop.

The surfeit of Sainsburys at Stamford House gives a clue to fourth-generation David's sense of family duty and responsibility. It's not just the ghosts of dead Sainsburys looking over his shoulder. There are the live ones too.

Young David, 52 and, according to a recent survey of the super-rich, Britain's richest person after the Queen, has a hard act to follow. He took over the reins from John, who transformed a middle-ranking regional grocery business into one of the most successful companies in Britain. In his 23 years as chairman profits grew from pounds 4.3m to pounds 628m, sales from pounds 166m to pounds 9bn and the share price from 9p to more than 500p.

David is the antithesis of his fiery cousin. John is emotional, instinctual, extrovert and High Tory: David is analytical, methodical, quiet and liberal.

David, finance director for most of his cousin's rule, has lived and worked in his shadow. According to his arch-rival Sir Ian MacLaurin, chairman of Tesco, 'We really don't know David very well. John has been such a commanding figure in Sainsbury's and David has been very much in the background.'

But in one sphere at least, David can be said to surpass his cousin: personal wealth. David's beneficial shareholding in J Sainsbury is valued at more than pounds 1.7bn. That is after he recently handed over pounds 200m of Sainsbury shares to his Gatsby Charitable Foundation, the trust which channels millions in dividend income into his pet charities and other projects.

Whereas John had to share his inheritance with his two brothers, Tim and Simon, David was an only child. In league tables of personal wealth, Sainsbury's unstoppable growth has catapulted David ahead even of the Duke of Westminster, whose vast estates have been hit by declining property values.

You would not know it. The family lives unostentatiously in London's Notting Hill. There is a Cotswold retreat, but there are no yachts, no aeroplanes and no racehorses. David must be the only FT-SE 100 chief to travel in a chauffeur-driven Chevrolet van - quite a contrast to John's Bentley.

His commitment to Gatsby (his favourite book was Fitzgerald's The Great Gatsby when he formed the trust in the Sixties) is unstinting. 'To understand David you have to realise he has a huge sense of duty,' says one friend. 'He believes wealth carries its responsibilities.'

Early on he decided he would not give willy-nilly but would concentrate on a few key areas. His choices give a clue to the man. Not furry animals, not the arts: the Sainsbury Wing of the National Gallery was financed by his cousins. David chose grave, worthy and decidedly unglamorous causes: mental health, industrial policy, education, engineering, social policy. Gatsby now holds pounds 500m of Sainsbury shares after last week's boost, and its dividend income has been raised from pounds 10m to pounds 15m.

David's largess to charity may partly reflect a growing despair with party politics. It might have been very different. When the Gang of Four quit the Labour Party to form the SDP in 1981, it was David who bankrolled them.

He later said: 'The SDP stood for the kind of politics which put enormous emphasis on the market and efficiency, but also put an emphasis on social policies, social justice . . . it mirrored my own beliefs.'

In the heady, hopeful days of the SDP's infancy, David was chosen to lead a panel of business executives to hammer out economic and industrial policy. If the party had ever achieved power, the odds were that David would have become trade and industry minister. Ironically, it is his cousin, Tim Sainsbury, who now does that job for the Conservatives.

But while David saw eye to eye with David Owen, his relationship with Roy Jenkins, Shirley Williams and Bill Rodgers was more distant. He stood by Owen to the end and they resisted the merger with the Liberals, condemning themselves to the wilderness.

The SDP's failure scarred him deeply. At the general election last year he did not vote at all. He now says of his aborted political career: 'I could never really go into something else and see someone else running Sainsbury's, but at one time it certainly looked very tempting.'

That leaves him with a 13-year stretch to shape the family business. He takes on a company in good shape. Last year it overtook Marks & Spencer to become Britain's most profitable retailer. It is popular with customers - each week 9.5 million people visit a Sainsbury, Homebase, Savacentre or (in the United States) Shaw's - and with many of the staff, who have received pounds 250m in profit share. Among grocers, only William Morrison has a higher stock market rating.

Even the company's many critics have found it hard to inflict serious damage on its public standing. It offends Sabbatarians by opening on Sundays, environmentalists by building on green-field sites and some consumers, who believe the prices are excessive and the queues too long. Yet independent surveys still put the company ahead of most of its rivals, with an unparallelled record for sales per square foot.

Staff at Sainsbury have noticed few changes in strategy since the hand-over of power last November. David believes the group's growth will continue to be fuelled by superstore openings in the UK. However, some observers say he may be more favourably disposed to US expansion than his cousin. He took an MBA at Columbia in New York, where he developed a taste for things American, and he was instrumental in the Shaw's acquisition, which has yet to yield a decent return.

As discounters poach market share from traditional grocers, Sainsbury may have to look outside its core market of UK food to continue its earnings growth record. The creation of a new senior post, director for new business opportunities, hints at acquisitions to come.

But while strategy so far remains little changed, management style has altered. David delegates more. Decisions are based more on research and logic and rather less on gut feeling and experience. There is more collegiate decision-making. However, he shows no sign of splitting his dual role of chairman and chief executive, in line with the Cadbury Committee's recommendations. City analysts say he is well complemented by Tom Vyner, the joint managing director and deputy chairman, who is regarded as a born trader.

The executive floor no longer rings to the famous dressings-down of the autocratic John. But with elder relations watching his every move, David is not about to let one hundred flowers bloom and one hundred schools of thought contend.

David was a war baby, born in 1940, after the Battle of Britain and at the start of the blitz. He was not a very happy child - his schooldays at Eton are noticeably absent from his Who's Who entry. He enjoyed King's College, Cambridge, where he studied history, then switched to psychology. He was always serious, sometimes seemingly weighed down by the sense of responsibility and duty.

Friends say his marriage to Susan has helped to bring him out of himself, preventing him from taking life too seriously while keeping his feet firmly on the ground. Their friends are drawn from business and the professions. She is a governor of St Paul's Girls' School, where their three daughters were educated.

Great-grandson of the founder, John James Sainsbury, David joined the family firm in 1963, in the personnel department, and apart from the spell at Columbia he has been there ever since. Since 1988, when he was appointed deputy chairman, there has been little doubt he would take the top job. Privately, he admits that he might not have got there but for the family's 43 per cent shareholding. Accusations of nepotism are unlikely to be heard in future: none of the founder's great-great-grandchildren show any sign of wanting to enter the family business.

David Sainsbury's heroes are not retailers at all, but manufacturers - such people as Christopher Hogg of Courtaulds, Robb Wilmot, formerly of ICL, and John Egan, the ex-Jaguar chief now at BAA. He was suspicious of many of the much-lauded 1980s retailers long before they fell by the wayside. And he is contemptuous of asset-shufflers. He believes Lord Hanson has been enormously harmful for the image of industry.

Chairman of the governing body of the London Business School and a visiting fellow of Nuffield College, Oxford, he has written two books on industry, most recently Wealth Creation and Jobs. He has a venture capital operation providing seed capital for entrepreneurs with high-technology ideas.

Whatever his outside achievements, however, he must be all too conscious of that trio of old-timers at Stamford House, watching hawk-eyed to see he minds the shop properly.

(Photograph omitted)

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