Justin King spent much of the weekend denying he would step down as chief executive of J Sainsbury, following reports the supermarket group had appointed headhunters to find a replacement.
There had been much talk King could join Formula One - his son is a racing driver who is believed to have F1 aspirations - or Marks & Spencer. But King said in a TV interview:
I am not planning on going anywhere. I see myself staying at Sainsbury's...I cannot see any reason why I would go to [M&S]....I am not aware there is a vacancy [at F1].
Sainsbury shares have fallen 6.2p to 376.6p but that follows a downgrade by Citigroup, which has cut from buy to neutral. Citi analyst Alastair Johnston said:
Sainsbury has more-or-less reached our target price of 385p. The company reported sector-beating like for like growth of 3.6% over the first quarter 2013 period. We expect a reassuring earnings update when the firm reports its full year results on 8 May.
Were Sainsbury to roll through 2013/14 with 3%-4% like for like growth we could see substantial upside to the shares still, but we believe such a view would be unduly optimistic. Sainsbury benefitted from Tesco and Morrison
easing up on competitive pressure towards the end of their financial years. The latest Kantar datapoint suggests a slowdown in momentum: Sainsbury lost 6 basis points of market share year on year after an average gain of 37 basis points over the three previous months. It would be inappropriate to read too much into one month's data, but it does not encourage us to raise our like for like growth expectation for the full year of 2%. We thus move to a neutral
rating with no alteration of target price.
