Sainsbury's Coupe: 'Change in market dynamics over next two years'

Speaking as Sainsbury’s reported a better than expected Christmas trading update, Coupe said the grocer has “always been taking on the discounters” and added: “The market is still extremely challenging but I do think there will be a change in market dynamics and a rebalancing of the market overall.

“We’ve seen some form of slowdown in the performance of the discounters’ growth recently and over the medium to long term, there will be an equalisation in overall performance. We will return to normal levels of growth between the big four and the discounters eventually.”

He declined to call exactly when the change would happen, adding: “The market dynamics are overlaid with deflation and the consumer environment continues to be tough.”

Coupe also said that if the pressure on the grocery industry continues in the way it has for the past year then there will be some form of structural change on the horizon. He said: “If you look at any industry that has been under the same amount of pressure as is on the grocery sector at the moment then you will see that if it continues for the medium to long term, then there is bound to be some form of structural change three to five years down the track.”

He declined to comment on what particular kind of structural change he foresees, but pointed out consolidation could be a possibility.