Why Sainsbury’s wants to help Britons to live better: We meet boss Mike Coupe to discuss its Living Well index, boardroom pay and Brexit deals

One of the perks of the chief executive’s job is meant to be a grand corner office. Not for Sainsbury’s boss Mike Coupe, who roosts in a little pod on the edge of an open-plan floor in the headquarters in London’s Holborn.

There is a functional desk and utilitarian sofas to sit on. It’s not even clear whether it really is his office or a communal meeting room. ‘It does have photos of my family on those shelves, but sometimes I do find other people in here.’ 

Do they scurry out when he arrives? ‘Some do, some don’t. To be fair, most of the time what they are doing is probably more important that what I’m doing.’

Bonus: Boss Mike Coupe believes the supermarket can help in the wellbeing of the nation

Bonus: Boss Mike Coupe believes the supermarket can help in the wellbeing of the nation

It all fits with the company’s slogan, ‘Live Well for Less’, which struck a chord in austerity Britain after the financial crisis. 

Variants of it, Coupe says, date back to the foundation of Sainsbury’s in 1869 when it was ‘Quality Perfect, Prices Lower.’

The supermarket has been working for a year with Oxford Economics and the National Centre for Social Research on compiling a ‘Living Well’ index that will be published for the first time this week.

The findings will be based on a panel of 8,000 people who have been quizzed on their relationships, their health, their job security, their happiness levels and their anxieties. Its aim is to paint a picture of the nation’s wellbeing, from mental health to family relationships and financial pressures. 

Coupe, 56, says he wants to identify areas where Sainsbury’s might help, which sounds quite a long way from the normal remit of a supermarket to sell groceries. So how might the company boost the nation’s happiness factor?

‘Well, we employ almost 200,000 people, so we should be able to help our colleagues.’

Indeed – but wouldn’t the best way to do that just be to pay them more? ‘A lot of it is not about just money, it’s broader than that,’ he says.

He adds that all staff are on at least the national living wage and that there are no zero hours workers but minimum contracts of 12 hours a week. How does he feel about the Prime Minister’s agenda on boardroom pay and behaviour?

‘I like to think Sainsbury’s is at the leading edge of good corporate governance. My pay is very public and the sum we pay our hourly-paid colleagues is very public.’ He received £2.35 million last year compared with typical employees, who received a base rate of £8 an hour.

‘Living well for less is a philosophy of life, not just shopping. It captures the essence of what we are trying to do. It’s not just spending less money, it might be less impact on the environment.’

He says he puts the philosophy into practice in his own life by exercising and eating well. ‘I exercise. I am going to cycle up Mont Ventoux in Provence in a couple of weeks. I eat reasonably healthily apart from the occasional burger.’

Coupe is acutely aware of the pressures on household budgets in the wake of the Brexit vote. He is at pains to say Sainsbury’s is neutral, because he doesn’t want to offend any of his staff or customers, but it’s clear that the referendum result has been a headache.

The fall in sterling following the vote has increased the cost of imports and there is uncertainty for thousands of the grocer’s non-British staff. 

He says it has been ‘a big problem in terms of the pound’, which has fallen sharply in value against the dollar and the euro.

‘Inflation is running at 2.9 per cent and that was inevitable when you saw the pound devalued. Roughly half the food we sell comes from outside the UK and of that between 25 to 30 per cent comes from the EU. Virtually all the clothing and general merchandise we sell comes from outside the UK.’

He reckons he has kept a lid on increases by cutting costs and improving efficiency both at Sainsbury’s itself and in the supply chain, so prices at the supermarket have gone up by 2 to 2.5 per cent. That is lower than general inflation.

‘The pound has been devalued by around 15 per cent. We should be credited because we have done a remarkable job in insulating customers from price increases.’ Another difficulty is the 10,000 Sainsbury’s staff who come from elsewhere in the EU. ‘They want certainty on their future. There are three million EU nationals in the UK in total and they just want clarity.’

He adds that there is a bigger issue among suppliers. ‘Take skilled workers like butchers from Eastern Europe. They have taken the equivalent of a 15 per cent pay cut as a result of the devaluation of the pound. Then there are temporary workers picking fruit and veg in Lincolnshire – there are 80,000 people a year who do that.

‘Making sure there is a way for seasonal workers to come to the UK is important for the supply chain.’

Rich pickings: Coupe says it is vital seasonal workers come to the UK

Rich pickings: Coupe says it is vital seasonal workers come to the UK

Food and drink manufacture, he says, is hugely important to the UK, contributing more than £28 billion a year to the economy and accounting for more than 13 per cent of employment if farming is included.

Trade with Europe is vital, Coupe explains, because it is our most significant export market for food and more than half of UK farm income comes from European subsidies.

The other side of the equation is that, because we only produce about half of what we eat, we are heavily dependent on European imports for a quarter of the food and drink we consume.

Traditionally, he says, there tend to be high levels of protection around the food and drink sectors, which are typically excluded from Free Trade Agreements.

They also tend to attract high tariffs under World Trade Organisation rules, which could come into play if we didn’t reach an agreement with the EU.

‘It’s very important we maintain food production and get the right deal,’ he says.

What does the right deal mean? ‘I’m not going there. What I will say is this: we put full lorries on the road in southern Spain and they deliver to our distribution centres in the UK, they don’t stop on the way. Anything that stops them on the way in future adds to prices and reduces freshness.’

Apart from political turbulence, the supermarket industry is going through upheavals of its own. Sainsbury’s and the other traditional chains are being challenged by discount retailers such as Aldi and Lidl and online operators like Amazon. The £1.1 billion takeover of Argos last year is part of a strategy to strengthen Sainsbury’s position in the online shopping market.

Coupe grew up in rural Sussex and attended a local comprehensive school before taking a degree in physics at Birmingham University. His first job when he left in 1982, in the middle of a recession, was as a rep for Samuel Heath & Sons, a local high quality brassware business.

He went on to work for Unilever, Asda, Tesco and Iceland before moving to Sainsbury’s, where he spent a decade climbing the ladder to become chief executive.

Who does the shopping chez Coupe? ‘Well, sometimes I do it myself. But my wife mainly does it.’ Does she sneak in any cheeky stuff from Tesco or Aldi? ‘I couldn’t possibly say. But it’s important to keep an eye on the competition.’

His wife and two daughters in their early 20s live in York. He lives in London during the week and goes back north at the weekends.

He lets off steam by playing the guitar. ‘Occasionally I do go home and turn the amp up,’ he says.

One memorable moment was when he performed in front of 5,000 colleagues at a conference in Birmingham eight years ago.

He was trying to encourage staff to sell more seafood for Christmas and had hit on the idea of singing an adapted version of James Blunt’s hit, You’re Beautiful, to a colleague dressed up as a crustacean named Dawn the Prawn.

‘ “You’re beautiful…pink plump and tasty and so demure.” That was one of the lines,’ he reminisces. ‘The crowd loved it,’ he adds, not sounding wholly convincing.