By Scott Wright

THE outgoing boss of J Sainsbury vacates his job after failing to respond convincingly to the grocer’s failed bid to merge with rival Asda last year, analysts have said.

Sainsbury’s told the City that Mr Coupe will be stepping down as chief executive at the end of May, bringing his six-year tenure at the helm of the retailer to a close.

Mr Coupe, a retail veteran who has worked for Sainsbury’s for 15 years, will be replaced by Simon Roberts, the company’s current retail and operations director.

Shares in the grocer dropped by more than two per cent as investors reacted to the news.

The decision to part ways with Mr Coupe, who plans to retire, comes less than one year after the collapse of Sainsbury’s proposed £12 billion merger with Asda. The competition watchdog blocked the deal in April amid concerns it would lead to higher prices and reduced choice for UK consumers.

It has since been widely speculated that the failure to get the deal over the line would ultimately cost Mr Coupe his job. His reputation was also damaged when he was caught on camera signing “We’re in the money” as he prepared to be interviewed about the Asda bid, which he hastily apologised for.

City watchers also say the jury is still out Sainsbury’s £1.4bn acquisition of Home Retail Group, owner of Argos, in 2016, which resulted in scores of Argos stores closing.

John Colley, associate dean at Warwick Business School, said: “Unfortunately the departure of Mike Coupe has been coming for some time, since the failed merger of Asda and Sainsbury’s.

“Despite Mike’s protestations to the contrary, the referral to the Competition and Markets Authority was a major distraction for the management at Sainsbury’s. During that period they lost market share and had few initiatives to defend their market position. It was clear their entire focus was on the merger. The cost of that failure was also significant in terms of advisor fees.”

Sophie Lund-Yates, analyst at Hargreaves Lansdown, said: “We don’t think the failure of the deal in and of itself will have led to Coupe stepping down. However, there’s an argument to suggest the strategy since the failed merger has been lack lustre, with no cast-iron plan of how sales and profits are likely to be boosted in the medium-term. That’s more of a sensitive point than the deal itself not going ahead.”

Mr Coupe noted that it has been a privilege to lead Sainsbury’s during “the most challenging and competitive of my 35 year career in retail”, and highlighted the growth of the company’s online business in that time. Nearly 20% of its sales now come from its online operation, he said.

Mr Coupe said: “This has been a very difficult decision for me personally. There is never a good time to move on, but as we and the industry continue to evolve, I believe now is the right time for me to hand over to my successor.”

Mr Colley added: “Mike will always be remembered for his impromptu rendition of “We’re in the money” whilst waiting for an interview over the proposed merger. Not only was it hugely embarrassing when it was caught on camera, Mike also turned out to be very wrong, which may have been more damaging in the long run.”

Mr Roberts arrived at Sainsbury’s in July 2017 with 30 years’ retail experience to his credit, having joined the Marks and Spencer management training programme aged 18. He spent 15 years at M&S and then 13 years at Boots, where he led the UK and Ireland operation.

As well as leading Sainsbury’s retail and logistics operations, he recently took over retailing at Argos as part of its continuing integration.

Mr Roberts was appointed to the top post following a search process, led by chairman Martin Scicluna and the nomination committee supported by external head-hunters, which included internal and external candidates. He starts on June 1 and will receive a base salary of £875,000.

Earlier this month, Mr Coupe hailed a “standout” operations performance as Sainsbury’s turned in a mixed set of results for the key Christmas period. Retail analyst Kantar said Sainsbury’s had held its grocery market share at 16% in the 12 weeks to December 29. Shares closed down 4.4p at 208p.