Pastures new

1 July 2004

The architect of the supermarket group s failed strategy was standing in the way of effective change. Now Justin King, the new chief executive, looks set for a radical review. This could be pretty painful, at least in the short term.

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Sir Peter Davis has stepped down as chairman of J Sainsbury a year ahead of schedule following a series of rows with investors. He will be replaced by Philip Hampton, previously finance director at Lloyds TSB and BT.

Meanwhile, Sainsbury warned that profits this year would be lower than expected. It said it would aggressively sell excessive stocks of nonfood products and trim food prices.

The group also said Justin King, the new chief executive, would undertake a wideranging review of the business. This will span price, range, quality and promotional activity. King will also be looking at the supply chain and at the store estate and property assets. The results of this will be presented on 19 October.

Sainsbury's sales in the first quarter grew 1% on a likeforlike basis compared to a decline in Q4.

Davis' departure followed unhappiness over his compensation package. Sainsbury said it has not been possible to reach agreement over amending his share award. This would now be referred to lawyers.

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