The battle of the UK supermarkets has hugely intensified since the end of the recession, with consumers now focused upon quality as opposed to seeking bargains. This has meant that Tesco, which undisputedly held the top spot in the supermarket race for many years, has faced a high level of competition from Sainsbury’s which has increased its market share to the point where it is now almost level with the larger chain.
However, Sainsbury’s future prospects have today been shaken by the news that chief executive Justin King will resign his post as the head of the chain in July. Upon the news being made public, Sainsbury’s shares value fell by more than 2 per cent – indicating the high level of confidence Mr King has garnered with consumers and market analysts alike.
In a statement made by Mr King, who has held the company’s reins for 10 years, he called the experience of leading the company for so long a “privilege”.
He continued; “This was not an easy decision for me to make, and in truth it will never feel like the right time to leave a company like Sainsbury’s.”
During the 10 years that Mr King led the company, Sainsbury’s managed to increase market share by 10 million customers per week and sales rose by a total of £9.5 billion. The supermarket chain has also racked up an impressive five consecutive years of profit growth despite the fact that the recession caused key rivals such as Tesco and Morrisons to struggle in the same period.
At present, Sainsbury’s has a stock market value of £6.8 billion and holds a 17 per cent share of the UK grocery market. Furthermore, this is expected to increase further given that underlying profits for the 2012-2013 financial year totalled £756 million – a huge increase from the £254 million achieved in the 2004-2005 financial year.
Mr King will remain in his current position until the company’s annual general meeting on the 9th of July, after which present group commercial director Mike Coupe will take over as company chief executive officer.
With the employment market improving hugely and increasing numbers of company bosses being “poached” by rival firms, Mr King’s exit from Sainsbury’s may well mark the beginning of a fleet of changes taking place in boardrooms across the country. Sainsbury’s must hope that replacement Mike Coupe will be able to continue where Mr King left off and build momentum, in the words of Chairman David Tyler, upon the “lasting legacy” which has been created over the past decade.
Do you think Sainsbury’s will suffer as a result of Mr King’s resignation, or has the brand established a strong customer base which will remain loyal even after the loss of this “truly exceptional leader”?
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