J Sainsbury Plc’s (SBRY) Group Commercial Director Mike Coupe leads a race to succeed Justin King as chief executive officer of the third-largest U.K. grocery chain, according to people familiar with the matter.
The supermarket company may announce as soon as February that King will step down after about nine years in charge, said the people, who declined to be identified because a final decision has yet to be made. The 51-year-old executive will probably stay on until 2014 to ensure a smooth handover, according to the people. Coupe, 52, is the most likely successor though other candidates are being considered, they said.
“It’s a negative that Justin King is stepping down after a period of strong performance for Sainsbury,” said Nick Coulter, an analyst at Nomura with a neutral rating on the stock. “It’s also a challenging time to make such a transition.”
Sainsbury fell as much as 1.2 percent in London trading, erasing an earlier gain of as much as 0.5 percent. The stock was down 0.3 percent at 352 pence at 3:13 p.m., trimming this year’s advance to 16 percent. Sainsbury’s share gain in 2012 compares with declines of 16 percent at larger competitor Tesco Plc and 19 percent at the smaller William Morrison Supermarkets Plc.
Coupe joined Sainsbury from the then-owner of Iceland Food stores in 2004, several months after King started as CEO. In eight years at the retailer, he has helped oversee growth in sales that has exceeded competitors, driven by the Brand Match price campaign, own-brand ranges and a push into convenience stores. Sainsbury’s share of the U.K. grocery market rose to 16.9 percent in the 12 weeks ended Nov. 25, according to Kantar Worldpanel, compared with 15.6 percent at the end of 2004.
Speculation about succession is premature and King has made his commitment to the company clear, a Sainsbury spokeswoman said by e-mail. The CEO said as recently as last month that he had no plans to leave the retailer within the next year.
Coupe, who hosted a media visit to Sainsbury’s store in Epsom, England, last week, has been group commercial director of the London-based company since 2010, overseeing trading, marketing, information technology and online operations. He previously worked at both Wal-Mart Stores Inc.’s U.K. Asda chain and Tesco, the U.K.’s largest grocer.
King, who before joining Sainsbury was director of food at Marks & Spencer Group Plc, (MKS) fought off an attempted 10.6 billion- pound ($17.2 billion) takeover three years after he joined. The approach was from Qatar’s sovereign wealth fund, which remains the retailer’s biggest shareholder with a 26 percent stake.
Sainsbury shares have risen 34 percent during his tenure as CEO, compared with a 36 percent gain for Tesco and a 6.2 percent advance for Morrison.
Sainsbury sales rose 3.4 percent in the 12 weeks ended Dec. 8, faster than its three main U.K. competitors, according to data from researcher Nielsen. Revenue gained 2.5 percent at Tesco and 1.4 percent at Asda in the period, Nielsen said.
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