Recall the shambolic state of Sainsbury's when Justin King arrived from Marks & Spencer in March 2004. Sales and market share were falling, the company's choice of a new chairman had been rejected by irate City shareholders, Tesco was rampant and a dividend cut was inevitable. The annual meeting that year was dominated by a furious row over the bonus for previous boss Sir Peter Davis, author of an expensive IT and distribution flop.
One City analyst at the time thought King was being handed "the mother of all hospital passes". Philip Dorgan at Panmure Gordon wrote: "Our recent visits to Sainsbury's have been among the most depressing in 20 years as retail analysts. Whole sections of the store, particularly in fresh foods, are barren. Product quality, partly a function of poor availability, is sinking."
From that mess, King has led a remarkable recovery. Sainsbury's shares have not been stellar performers – they have travelled from 261p to 350p on his watch – but the total return is 100% once dividends are included, roughly in step with the FTSE 100 index and better than major UK rivals.
King had some luck. Economic conditions in 2004-07 were gentle, ideal for a root-and-branch overhaul of systems and the introduction of sharper pricing. But Sainsbury's was able to maintain momentum during and after the recession, which is perhaps more impressive.
In terms of market share, Sainsbury's is neck-and-neck with Asda again. Like-for-like sales have risen for 36 quarters in a row, although the run is likely to end there. The property strategy has been spot-on: get into convenience stores early, don't follow Tesco into hypermarkets.
King's trumpeting of every minor industry gong may have made his results statements turgid reads, but the goal of being "the most trusted retailer" has produced commercial gain. Sainsbury's avoided the horsemeat scandal. Sponsoring the 2012 Paralympic Games, which more conservative consumer companies wouldn't touch, was a coup.
Why is he quitting? Unusually, the official explanation may be the real one. Ten years is a long time to lead a FTSE 100 company. There is a ready-made successor in Mike Coupe, commercial director, and the supermarket game is entering a new era. Grocery volumes, especially in stores, are declining; the discounters are fiercer; home delivery is on the increase; supermarkets need to find new ways to pursue profitable growth. It is a reasonable moment to promote Coupe.
What will King do next? Neither of the rumours is terribly convincing. At Formula One, he would surely get in the way of his son, a Formula Three driver. Even if there were a vacancy at the top of M&S, the job might feel like more of the same.
Should shareholders in Sainsbury's fear the change of chief executive? Harder to say. Tesco's experience is not encouraging. On the other hand, Sainsbury's is a simpler UK-only business and there has been less jockeying for position in executive ranks. But Coupe will not have it easy – in the new era, none of the big supermarket groups will.
