// Sainsbury’s CEO Mike Coupe vows to stay in role despite failed Asda merger
// The CMA’s recent verdict that blocked the deal heaped pressure on Coupe
// Coupe insists he is “committed” to the business and has board’s support
Sainsbury’s chief executive Mike Coupe has vowed not to quit despite the pressure heaped on him after the grocer’s failed £12 billion merger with Asda.
Coupe, the mastermind behind the proposed deal that was blocked by the CMA last week, said he was “committed to the business” and that he had “the support of the board and the support of the shareholders”.
Speaking to media after Sainsbury’s reported a 41.6 per cent plunge in full-year pre-tax profit to £239 million, Coupe was defiant and committed to restoring growth by driving Sainsbury’s business strategy forward.
“We are doing all the things that we need to do in terms of adapting our business to changing customers’ needs,” he said.
The competition watchdog’s verdict on the Asda merger – combined with lacklustre stock market performance and challenging trading figures within Sainsbury’s core grocery business – led to speculation that he could step down from his role or be pushed out by chairman Martin Scicluna.
Coupe said it would be “foolish” to provide a timeframe on his longevity as Sainsbury’s chief executive and insisted he would not quit.
“I’m staying,” he said.
Earlier this week, Coupe said he had conceded in February – when the CMA published its provisional findings of the Asda deal – that the merger was dead in the water.
Today he said that in light of the watchdog’s final verdict last week, Sainsbury’s was “drawing a line” under the merger and would not be pursuing a legal challenge.
Despite this, he still thought the CMA’s decision was “fundamentally flawed”.
“It takes away from customers £1 billion of price investment and cost savings – and it’s quite difficult to imagine in the brutally competitive grocery market that somehow prices could go up, quality could go down and service could go down, but it is what it is,” he said.
In its trading update today, Sainsbury’s said it was facing a £46 million hit from its failed bid to merge with Asda, which was first announced in April 2018.
After a drawn-out probe into the £12 billion deal, the CMA’s verdict on April 25 saw it rejected altogether amid concerns the new business entity would have caused an increase in prices as well as longer check-out queues.