Sainsbury to ring changes

THE City is braced for more senior management changes at J Sainsbury, Britain's biggest food retailer, after Thursday's surprise decision to replace its marketing director less than a week before reporting what are expected to be disappointing interim figures, writes Patrick Tooher.

Analysts believe further appointments from outside are inevitable if the board is to be strengthened and cumbersome decision-making structures improved.

Sainsbury last week appointed Kevin McCarten, a trading director at the rival Kingfisher- owned Woolworth, as its new marketing director. He replaces Ivor Hunt, 54, who is taking early retirement next year. The move follows criticism that Sainsbury's marketing had lost direction in the face of national loyalty card schemes launched by its biggest competitors, Tesco and Safeway.

"The moves to shake up management have only just begun," said Tony MacNeary, retail analyst at NatWest Securities. In particular, pressure is growing for David Sainsbury, the chairman, to name a successor to his deputy chairman and joint managing director, Tom Vyner, who is due to retire in about two years.

Mr Vyner, who is responsible for all buying, merchandising and trading activities, has a formidable reputation among suppliers for his tough stance on negotiations and will be a hard act to follow, brokers say.

But they fear that delay in appointing a successor risks low morale at head office filtering down to store management and further aggravating poor like-for-like sales.

Figures for the six months to mid-September due on Wednesday are expected to show only a small rise in pre-tax profits to about pounds 455m compared with pounds 444m for the same period last year. Underlying sales growth in the core UK supermarket business is likely to be well below the industry average of almost 6 per cent.

Concerns about sluggish sales growth saw Sainsbury's shares hit a seven- month low last week.

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