Tesco revealed on Monday it was planning a strategic alliance with French retail giant Carrefour. Like the Sainsbury’s-Asda merger, the move is in large part about putting the two players in a stronger position to negotiate prices with their suppliers.
“Everyone’s working on strategies to help them adapt to that changing world,” Coupe, speaking on a call after Sainsbury’s posted its first quarter results, said. “That change is accelerating not decelerating. Different companies will respond in different ways.”
When it came to joining forces with Asda, he said, “we think there’s a huge benefit we can bring to our customers. And you can see from our share price the market sees it as a good thing.” The share price jumped to its highest for two years after the news emerged in late April and has stayed at around the same level since.
Sainsbury’s total sales (excluding fuel) for the 16 weeks to 30 June were up 0.8%, while like-for-like sales were up just 0.2% – a worse performance than each quarter in the previous year.
Coupe nevertheless said he was pleased with the results, explaining: “The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March.
“Our price position has improved and customers have responded well.”
Coupe was also asked on the call about whether he was making plans to move any of his supply chain in the event of a challenging Brexit outcome, and said he was “clearly thinking about it”.
He expressed the nervousness many in the business community are feeling about the government’s progress in the negotiations when he said: “It would be really good if there was some certainty coming out of it in the next short period of time.”