Sainsbury's CEO Mike Coupe to retire

Lianna Brinded and Oscar Williams-Grut
Chief executive of J Sainsbury plc, Mike Coupe, speaks on a panel at the annual Confederation of British Industry (CBI) conference in east London, on November 6, 2017. / AFP PHOTO / Daniel LEAL-OLIVAS        (Photo credit should read DANIEL LEAL-OLIVAS/AFP via Getty Images)
Sainsbury chief executive Mike Coupe. Photo: DANIEL LEAL-OLIVAS/AFP via Getty Images

The chief executive of Sainsbury's (SBRY.L), one of Britain’s largest supermarkets, is set to retire after six years in charge.

Sainsbury’s said Wednesday that CEO Mike Coupe will retire from the group in May. Simon Roberts, the current head of retail and operations, will take over at the helm.

Coupe said it was a “very difficult” decision to leave but said it was “the right time for me to hand over to my successor.”

“Sainsbury's is a very different business today to the one I took over in 2014,” Coupe said in a statement. “I have focused on setting the business up to deal with the strategic challenges of our industry.”

Coupe oversaw Sainsbury’s £1.4bn takeover of catalogue retailer Argos in 2016, transforming Sainsbury’s from a supermarket group into a retailer of everything from clothing to watches. The deal also expanded the range of ways people could shop with Sainsbury’s.

“I am proud that almost 20% of our total sales now come from our online channels and that we are becoming one multi brand, multi channel business, able to continue to evolve and adapt with customers' ever changing needs,” Coupe said in a statement.

Coupe also tried to merge Sainsbury’s with rival supermarket Asda, a deal that was blocked by the UK competition regulator last year.

READ MORE: Regulator blocks Sainsbury's and Asda mega merger

Analysts said Coupe’s departure was expected and his card was marked by the failed attempt to merge with Asda.

“This is not a surprise,” said Bruno Monteyne, a retail analyst at investment bank Bernstein.

“For the last few months we have been discussing with investors the likelihood of Mike Coupe stepping down. The discussion initially started after the failed Asda-Sainsbury's merger discussion.”

Clive Black, a retail analyst at Shore Capital, said Coupe had “materially over-extending the business’ capabilities” withe the Asda deal but said he “never faulted” him for the attempt.

Sainsbury’s share price has declined by around a third during Coupe’s time in charge, as the company has battled competition from German discounters Aldi and Lidl, as well as a resurgent Tesco. Coupe said his time in charge had been “the most challenging and competitive of my 35 year career in retail.”

Chairman Martin Scicluna thanked Coupe for his work, saying he had been an “exceptional” chief executive who has been “bold and ambitious on behalf of our shareholders, customers and our colleagues.”

Roberts said in a statement he felt “really excited” about taking over the business and thanked Coupe for his time in charge.

Monteyne said Roberts was “a continuity-operator appointment for Sainsbury's, reflecting the fact that the board and the management team probably think that Sainsbury's is doing a good job within a tough market and no major changes are needed.”

Coupe said: “I am delighted that Simon will be the next Chief Executive and am confident that he is the right choice for our customers, our colleagues and our investors.”

News of Coupe’s departure comes just a day after Sainsbury’s announced plans to cut hundreds of office jobs, as Argos and Sainsbury’s teams were merged. Roles within Sainsbury’s senior leadership team have already reduced by 20% since March last year.

READ MORE: Sainsbury's and Argos set to slash hundreds of jobs