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* Mike Coupe to step down as CEO on May 31
* Retail and operations director Simon Roberts to take over
* Sainsbury's attempt to buy Asda blocked last year
* Shares down 2.3%
(Adds detail, analyst comment, updates shares)
By James Davey
LONDON, Jan 22 (Reuters) - Sainsbury's has picked
retail and operations director Simon Roberts to succeed CEO Mike
Coupe, the architect of the British supermarket group's failed
bid for rival Asda who will step down in May after six years at
the helm.
Roberts' task will be to grow earnings in the face of
weakening consumer demand, Brexit, and the relentless march of
German-owned discounters Aldi and Lidl, which continue to win
market share from Britain's big four grocers - industry leader
Tesco, Sainsbury's, Asda and Morrisons.
On Jan. 10, Reuters reported that Roberts was the leading
internal candidate to succeed Coupe.
Coupe, 59, has faced questions about his future since April
when Britain's competition regulator blocked Sainsbury's attempt
to take over Walmart-owned Asda for 7.3 billion pounds
($9.5 billion) and become Britain's biggest retailer.
Sainsbury's shares were down 2.3% at 1135 GMT, extending
losses over the last year to 25%.
All eyes will now be on whether Roberts, 48, will adapt a
strategy set out by Coupe in September that was designed to show
Sainsbury's could prosper on its own.
It focused on cost cutting, paying off debt, investment in
technology and further integrating the Argos general merchandise
business Sainsbury's purchased for 1.1 billion pounds in 2016.
Bernstein analyst Bruno Monteyne said that, as an insider
signed-up to the current strategy, Roberts was unlikely to start
with a bang and a major move to significantly cut prices.
"He will only do so if trading were to deteriorate
materially. But he has limited time to make up his mind and make
it part of the honeymoon clean up," he said.
Monteyne also said Roberts might review the future of
Sainsbury's bank, which he said was unpopular with investors.
'DIFFICULT DECISION'
Roberts, who started his retail career at 16 and is a former
executive of health and beauty retailer Boots, joined
Sainsbury's in 2017.
"Simon has been extremely effective during his three years
at Sainsbury’s, leading our store teams through great change in
that time," said Chairman Martin Scicluna.
Roberts has re-built Sainsbury’s operating model for its
over 1,400 supermarkets and convenience stores. He has invested
in technology, implemented new leadership structures and
standardised shop floor workers’ contracts. That has driven
efficiencies and improved product availability.
"I am really excited about working together with our 178,000
colleagues to become one multi brand, multi channel business,"
said Roberts, whose base salary will be 875,000 pounds.
Sainsbury's said Coupe would remain a director from June 1
until the annual shareholders' meeting on July 2, at which point
he will retire from the company he joined 15 years ago.
“This has been a very difficult decision for me personally,"
said Coupe, whose total remuneration was 3.9 million pounds in
the 2018-19 year.
"There is never a good time to move on, but as we and the
industry continue to evolve, I believe now is the right time for
me to hand over to my successor."
Sainsbury's profit is forecast to fall in its 2019-20
financial year.
Coupe's purchase of Argos was generally regarded as a big
success and, unlike Tesco and Morrisons, Sainsbury's did not
sacrifice a chunk of profit margin with a major price cutting
campaign in response to the discounters.
However, his tenure will likely be defined by the failure of
the Asda transaction.
GAFFE
Coupe will also be remembered for one of the most notable
corporate gaffes of recent times.
He made unwanted headlines around the world shortly after
the Asda deal was announced in May 2018 when he was caught on
camera singing "We're in the Money". He apologised, saying he
had been trying to compose himself before a television
interview.
Roberts' appointment means Britain's two biggest supermarket
groups will be run by Boots alumni.
Ken Murphy, who will succeed Dave Lewis as CEO of Tesco in
the summer, was earlier in his career joint chief operating
officer at Boots UK & Ireland along with Roberts. Murphy and
Roberts are friends.
Roberts also spent 15 years at clothing and food retailer
Marks & Spencer, where he had roles in stores and
operations.
“He’s got a great pedigree,” said someone who has worked
with Roberts.
The person said Coupe and Lewis represented the last
generation of "command and control" supermarket group CEOs.
“You’ve now got two guys whose real skill set isn’t about
knowing the answer to everything, their skill sets are being
good guys that people want to work with…bringing the best out of
others."
($1 = 0.7658 pounds)
(Reporting by James Davey; editing by Kate Holton and Mark
Potter)
