Comment: Mike Coupe is right to update Sainsbury’s offer

That Sainsbury’s chose to unveil a strategic review alongside its interim results this week may seem surprising to some. After all, new boss Mike Coupe was a seamless promotion to the top job having served as Justin King’s right hand man and member of the board since 2007.

But in laying out his vision, Coupe has not only drawn a line under the King years and launched his own tenure, but highlighted once more how fast the grocery market is changing.

He may have only been chief exec since July, but it already feels as if he is facing a different grocery landscape to the one his predecessor left behind.

The onslaught of the discounters continues to gather pace. Morrisons is competing harder on price and loyalty. And a new top team at Tesco seems primed to open a war chest that may yet rebase the sector’s view on value.

Coupe’s vision sets out how he believes the grocer will compete in this rapidly evolving market.

Convenience and changing shopping habits are shaping his response to property requirement. Over half of the new space to 2018 will be convenience stores as the trend for smaller baskets accelerates.

“Grocery is undergoing a period of change, but Coupe has held true to Sainsbury’s values”

Chris Brook-Carter, Editor-in-chief

And following a review of its estate, Sainsbury’s will also withdraw from 40 schemes in its property pipeline and seek to address under-utilised space in the 25% of its stores it has identified as being too large.

The update made reference to new supermarket concepts over the next few years. Sainsbury’s has an opportunity to expand partnerships such as the one with Jessops to rethink how it leverages that excess square footage – although as Tesco has found, there is no panacea to the problem.

But it is the additional £150m of price investment that is the most eye-catching element of the update. The scale of the pot reflects an admission the business must compete hard on grocery basics but the number is significantly lower than that pledged by rivals Morrisons and Asda and will undoubtedly fall into the shadow of whatever Tesco unleashes next year.

But investment in the quality of own-label shows that Sainsbury’s is fighting not just on price, but attempting to push its differentiating factors once more.

Grocery may be undergoing an unprecedented period of change but Coupe has held true to Sainsbury’s values, evolving rather than revolutionising its offer.

Sainsbury’s has set out its review knowing that rivals are likely to push on price in the near future. Coupe can’t predict how dramatic that drive will be.

So whether he has to adjust his position or the investment will prove sufficient, he is right to keep differentiating Sainsbury’s and doing what is best for his customers.

• Chris Brook-Carter, Editor-in-chief