Opinion: Forget Asda – Mike Coupe leaves a lasting legacy at Sainsbury’s

“No! Why would you say that? You’re breaking my heart,” was Coupe’s response, clearly only partially tongue-in-cheek.

It was the reaction of a man who cared deeply about the business he ran, who lived and breathed it and genuinely wanted to know what Sainsbury’s could be doing better to win my custom.

Although that ethos and customer focus is mirrored among his executive team – including his successor Simon Roberts – Coupe’s departure will be a big but not unexpected blow for Sainsbury’s.

Coupe is said to have long been contemplating starting a history degree this autumn. The timing of his departure now allows him to properly pursue that possibility. But as he prepares to take off his orange name badge and walk out of 33 Holborn for the final time in June, how will history judge Coupe himself?

It is easy to look at the failed merger with Asda as the defining moment of his six-year tenure. Many have already done exactly that. Admittedly, it was one of the most audacious attempts at M&A in the UK in recent years. Arguably, the leadership teams across Sainsbury’s, Asda and its parent Walmart failed to properly justify the reasoning for what would have been such a seismic move and were too arrogant in their collective arguments to the Competition and Markets Authority.

But to judge Coupe’s reign on that collapsed deal is to do him a huge disservice.

The bid to combine the UK’s second- and third-largest supermarket chains was always going to be bold, ambitious and forward-thinking. It is those characteristics that better define Coupe’s time at the helm and the progress Sainsbury’s has made under his leadership.

Retail for the 21st century

Coupe has accelerated Sainsbury’s drive into the 21st century, building a business that is fit not just for today, but for tomorrow’s retail world.

Behind closed doors, Coupe has encouraged his leadership team to envisage a future where just six to 10 retail giants control the entire market. Coupe’s blue-sky strategic approach was designed to ensure Sainsbury’s was set up to be in that group of powerhouses leading the collaboration and consolidation charge, rather than a business that could be gobbled up by a bigger beast such as Amazon.

During the past two to three years, Coupe has increasingly spoken of Amazon and online food delivery companies such as Deliveroo and Just Eat as being among Sainsbury’s chief competitors, as well as traditional rivals such as Tesco, Asda, Morrisons and the discounters.

“The business has been imaginative with its store refits and re-thought what was possible in big-box retailing”

Coupe wanted Sainsbury’s to become a truly multi-channel, multi-category retailer, offering shoppers its products “whenever and wherever they want” – and the grocer has made laudable strides on that journey.

Coupe has established a culture of innovation and ambition, one that is perhaps best illustrated by its £1.4bn acquisition of Argos in 2016. Despite its trading challenges, particularly in the turbulent markets of toys and gaming, Coupe and his senior leadership team have defied many seasoned observers by integrating Argos, leveraging its online and fulfilment capabilities across the wider group, and driving cost synergies ahead of plan.

The business has been imaginative with its store refits. Supermarket openings in Nine Elms and Selly Oak, in particular, re-thought what was possible in big-box retailing, bringing in complementary concession partners such as Oasis and Timpson, devoting more selling space to clothing and general merchandise and installing a high-quality catering offer to increase dwell time and create more of a ‘destination’ feel.

Grocery trailblazer

It is working on “redefining” loyalty, having acquired Nectar to create a more joined-up experience for customers across its various businesses and sending them personalised offers through an app based on customers’ purchase history and frequency, rather than purchase values.

Sainsbury’s has arguably blazed a trail among the traditional grocers in speedy delivery, using e-cargo bikes to deliver orders within an hour through its Chop Chop service and harnessing Argos’ Fast Track same-day delivery proposition in general merchandise.

It is focusing on ways to digitally enhance the in-store experience, through the rollout of SmartShop scan-as-you-shop technology and cashless store trials. The latter may not have proved a success so far, but Coupe’s willingness to test, learn and fail fast should not be ignored.

“Sainsbury’s has been the most consistent of the big four and protected its market share better than mainstream competitors”

In a challenging and rapidly changing market, Coupe deserves plaudits for refusing to simply batten down the hatches and weather the grocery storm. As the relentless rise of the discounters, the growth of online shopping and rising property costs battered the industry, Sainsbury’s not only held firm but found the time to look to the future and innovate.

While Tesco, Asda and Morrisons all suffered their ‘kitchen sink’ moments over the past five years – Tesco booking that mammoth £6.4bn loss in 2016 – Sainsbury’s has not hit such a nadir. Its top-line sales were dented, of course, but Sainsbury’s has been the most consistent of the big four during that time and protected its market share better than mainstream competitors.

That did not happen by accident. It is a direct result of Coupe’s strategic nous, future-proofing plans and ability to take people with him on that journey.

Forget about Asda – Coupe leaves a far greater legacy than that.