Justin King is to step down as CEO of Sainsbury’s after a decade in charge of the UK grocer. King has revitalised Sainsbury’s, taking a business with stock issues to one that has consistently outperformed its rivals in recent years. Here’s a look at the key events of King’s reign.
Sainsbury’s announces Justin King, the head of Marks and Spencer’s food business, as chief executive, replacing Peter Davis. The news came alongside half-year results that included a 0.1% rise in like-for-like sales.
King takes the Sainsbury’s hot seat. Within days, there is speculation US private-equity giant KKR is rumoured to be mulling a bid if King fails to turn the business around.
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Sainsbury’s reports 3% fall in annual profits. King shakes up management team, with the departure of Stuart Mitchell, the MD of its supermarkets business. All Sainsbury’s senior executives to report into King.
The retailer heralds its first significant move into the UK convenience channel under King with the acquisition of c-store group Jacksons Stores.
Data from the then TNS Superpanel indicate Sainsbury’s has halted the decline its share of the grocery market. For the 12 weeks to 10 October, Sainsbury’s share stood at 15.4%.
Sainsbury’s reports another year of falling profits but King says turnaround is “on track”.
The grocer books a 12% rise in annual underlying profits, ahead of market forecasts. King said the end of the financial year had seen the company’s fifth consecutive quarter of like-for-like sales growth.
A private-equity consortium consisting of CVC Capital, Kohlberg Kravis Roberts, Blackstone and Texas Pacific Group announced it was evaluating the possibility of a takeover bid for the retailer.
The consortium withdraws its offer after failing to win over the Sainsbury family, then the retailer’s largest shareholder.
Weeks later, Qatar-based investment group Delta (Two) Ltd became Sainsbury’s biggest investor. The fund and another shareholder, property tycoon Robert Tchenguiz, are said to place pressure on Sainsbury’s to divide its grocery business from its property portfolio.
Delta, a vehicle of the Qatari royal family, ups stake in Sainsbury’s to 25%, prompting renewed takeover speculation.
Sainsbury’s expresses “disappointment” at a decision from the UK’s Office of Fair Trading to fine the retailer GBP26m for fixing dairy prices in 2002 and 2003.
Sainsbury’s full-year profits jump, prompting King to say the retailer had “fulfilled the commitments” the company made when it launched its turnaround strategy – dubbed Making Sainsbury’s Great Again – in 2004.
Sainsbury’s announces plans to launch a GBP445m fund-raising programme to accelerate its expansion in the UK. The retailer’s ambition is to grow its floor space by 15% – or 2.5m sq ft – by March 2011.
King says Sainsbury’s has exceeded its space target, with a rise of 15.9% in the two years to March 2011. However, fourth-quarter same-store sales, excluding inflation, fell between 0.5-1% once the impact of VAT and store extensions was removed. King said the “tough” trading environment was the consequence of a more cautious – and poorer – consumer.
Sainsbury’s rolls out its Brand Match price-comparison initiative throughout the UK in a bid to emphasise the value it says consumers can get from its offer.
The retailer books a 7% increase in annual underlying profits, ahead of City forecasts. A month later, reporting sales for the first quarter of its new financial year, King says the grocer has “maintained our outperformance of the market”.
UK advertising watchdog The Advertising Standards Authority bans a spot for Brand Match, calling it “misleading”. King says Sainsbury’s had stopped running the ads a year earlier.
Later that month, King calls on the UK food industry to adopt common front-of-pack nutrition labels.
Sainsbury’s dismisses reports King could step down as chief executive in two months’ time.
King brushes off news of Tesco‘s national roll out of its own price-comparison scheme, which, unlike Brand Match, includes own label. He says: “We would say that most of our own label is not comparable to that sold by our competitors. We sell much more high-end [products]. Our customers tell us these things make our own label higher quality and therefore price comparing to them with products that are not as good and not as greater provenance is not a fair comparison
King reveals he could see the UK grocer having over 1,000 convenience stores in its estate, up from the over 520 in its network. Sainsbury’s plans to increase the proportion of its space made up by convenience stores to reflect a change in consumer habits that had started in the teeth of the downturn and had stuck, King says – top-up shopping. Sainsbury’s also announces sales from both its convenience stores and its online service are worth over GBP1bn.
The ASA clears Tesco’s Price Promise comparison scheme after a complaint from Sainsbury’s, which calls the ruling “unfair” and “contradictory”.
It emerges Sainsbury’s is to take its battle with Tesco over the retailers’ price comparison schemes to a judicial review.
Sainsbury’s share of the UK’s grocery market now matches Asda, the country’s second-largest retailer, according to the latest data from Kantar Worldpanel. For the 12 weeks to 5 January, both Asda and Sainsbury’s accounted for 17.1% of grocery retail sales in the UK. Sainsbury’s was the only one of the UK’s five largest grocers to hold their share of the market in the face of increasing sales at discounters including Aldi and Lidl at one end of the market and the continued growth at upmarket grocer Waitrose at the other.
On 29 January, Sainsbury’s announces King will leave the UK supermarket group this summer, with commercial director Mike Coupe taking the helm at the company.