Mike Coupe is yet to convince the City that he has a Plan B for Sainsbury’s
It has been several months since the Mike Coupe dream of a merger with Asda was dealt a lethal blow from Britain’s competition watchdog.
But how much has the embattled chief executive changed his tune? Not enough, it would seem, to quell anxiety among investors.
Shares in the supermarket giant failed to pick up today as the City digested the news of a third consecutive quarterly drop in sales.
Intense competition, tough comparatives, weak consumer confidence and political uncertainty; by now, the City understands the problems facing Sainsbury’s.
Read more: Sainsbury’s sales slip in tough supermarket environment
The trouble is that there still seems to be no clarity as to what the solutions are. If the botched tie-up with Asda was plan A, what is plan B?
Coupe and his directors have vowed to cut costs, slash debt and refurbish 400 stores, but their pledges feel somewhat underwhelming in contrast to their retail rivals.
Take Tesco boss Dave Lewis, for example, who used the firm’s capital markets day last month to reveal potential plans for “Tesco finest” stores, plant-based ready meals and more investment in its Clubcard loyalty scheme.
Lewis pulled the rabbit out of the hat, and if Coupe is to have any chance of winning back shareholder confidence, he must show the same energy and readiness to protect the firm’s waning market share.
The distinct lack of any real recovery plan is made all-the-more controversial by coming at a time when Coupe cashes in on a hefty £3.8m pay cheque.
Read more: Sainsbury’s cuts market share decline as Aldi and Lidl soar
Investors are unlikely to be happy that the firm’s boss has bagged himself a seven per cent pay rise in the same year that Sainsbury’s shares have plunged to a near 20-year low.
On the phone today Coupe remained resilient, telling journalists that his pay is set by a remuneration committee, and his performance is matched against targets that determine what he earns.
But it makes one wonder; if Coupe is getting a pay rise after the turmoil of the last year, what on earth are the targets that Sainsbury’s is setting?