Sainsbury's loses retail director to Asda during period of 'unprecedented turbulence' for supermarket groups
Sainsbury's retail and operations director Roger Burnley is quitting the supermarket chain to join rival Asda as its new chief operating officer, as the ongoing sector price wars hea, t up.
Reports suggested that the move makes Mr Burnley a likely candidate to succeed Asda's current chief executive Andy Clarke if he should decide to step down.
In the past, Mr Burnley has worked with Mr Clarke at both Asda and fashion retailer Matalan.
New role: Sainsbury's retail and operations director Roger Burnley is joining rival Asda as its chief operating officer, a move that could make him a likely candidate to succeed Asda's current chief executive
Asda's boss said: 'Adding Roger to Asda's Executive team further strengthens the board which, I believe, is now one of the most experienced and capable in the industry. I am looking forward to working with him again, this time as my deputy.'
Mr Clarke admitted that Mr Burnley is joining the company at a time of 'unprecedented turbulence' in the supermarket sector.
However he described Asda's as a 'healthy sustainable business with a clear strategy for success.'
Results earlier this month showed that Asda has weathered the supermarket price war better than its rivals, with the US-owned group smashing the £1billion profit barrier for the first time last year.
Although sales have deteriorated significantly more recently, the UK’s second-biggest supermarket said operating profits rose 1.9 per cent to £1.01billion in 2014, helped by its drive to reduce costs.
But Wal-Mart-owned Asda said revenues fell 0.4 per cent to £23.2billion last year and sales at stores open over a year were 1 per cent lower.
Asda's sales performance has deteriorated significantly in 2015, with the firm in August posting its worst quarterly sales slump in 50 years with a 4.7 per cent like-for-like decline in its second quarter, worse than the 3.9 per cent fall in its first quarter.
Mr Clarke said then that the supermarket had reached its ‘nadir’.
Meanwhile, Sainsbury's said the search for Mr Burnley's replacement is underway.
Mike Coupe, chief executive of Sainsbury's, said: 'I would like to thank Roger for his significant contribution to Sainsbury's over the last decade. During his time at Sainsbury's Roger has helped shape several areas of our business.
'He leaves Sainsbury's retail and operations teams in excellent shape, along with our best wishes for the future.'
At the end of last month, Sainsbury’s raised its full-year profits forecast despite posting a seventh straight quarter of falling sales.
The grocer revealed a 1.1 per cent fall in like for like sales for the most recent quarter – although that was an improvement on the 2.1 per cent sales decline seen in the previous three months.
The second quarter figure was also considerably better than its rivals who have found it harder to cope with the rise of German discounters Aldi and Lidl.
As a result, Sainsbury’s said it now expects profits for the full year to be 'moderately' ahead of the £548million pencilled in by the City, although that would still be a sharp fall from the £681million it posted in the previous year.
Sainsbury's and Asda, together with 'Big Four' rivals Tesco and Morrison's, are battling against newer discount rivals including Aldi and Lidl and are locked in a quest to drive prices lower and boost their share of the market.
Yesterday Tesco – Britain’s biggest grocer - launched a new price match promise, pledging to give customers an immediate discount on thousands of branded items if they could have shopped for cheaper elsewhere.
The struggling supermarket will now compare the cost of branded items against Asda, Morrisons and Sainsbury’s prices – if the shop would have been cheaper customers will automatically get the difference deducted from their bill.
In lunchtime trading, Sainsbury's shares on the FTSE 100 index were down 5.2p, or 1.9 per cent to 266.0p. Tesco was down 6.75p at 195.1p, and Morrison's shed 3.8p at 175.2p.
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