Business View: Sainsbury's needs its Kingpin to show Sir Peter the door

In Who's Who, Sir Peter Davis lists his interests as sailing, reading, opera and wine. So he may not understand what a hospital pass is. However, Justin King, who takes over as chief executive of J Sainsbury tomorrow, will. He has just received one.

In Who's Who, Sir Peter Davis lists his interests as sailing, reading, opera and wine. So he may not understand what a hospital pass is. However, Justin King, who takes over as chief executive of J Sainsbury tomorrow, will. He has just received one.

Friday's trading statement was a shocker. Like-for-like sales were down 0.9 per cent, with warnings of worse to come. Sir Peter attempted to distract attention by announcing the $2.5bn (£1.4bn) sale of its US chain, Shaw's, and he spotted the trend in the City for cashbacks by paying out a special dividend.

Alas, he never spotted the same trends in retailing. Sir Peter arrived claiming he'd received whatever opera's version of a hospital pass was from his predecessor, Dino Adriano. But this was the job he always wanted, having started in marketing when Sainsbury's dominated.

Sir Peter inherited a chain already in second place to Tesco and passes on one in danger of falling into fourth place behind Morrisons/Safeway and Asda. While he might claim he could not stop Morrisons buying Safeway, you can't help thinking Sainsbury's put too much effort into a quixotic tilt for the chain. This had a similar effect on the group as Lloyds TSB's failed bid for Abbey National: key eyes off key battles.

With Sir Peter still hanging around as chairman, Mr King is going to have to be careful about how much he blames the old management for the group's woes. He may want to refer to the pretentious mission statement Sir Peter put out shortly after he arrived four years ago, with its "bubbles" saying the stores should strive for "outstanding quality", "great service" and "competitive costs", which should be delivered "faster, simpler, together". And when he's stopped stating the bleedin' obvious, he might realise that at Sainsbury's the devil is in the detail.

For example: in my part of north London there used to be a very good Sainsbury's. But it has grown tatty while, nearby, the group has opened three Sainsbury Locals. These convenience stores would be welcome, if they had a decent selection which wasn't always running out, were not so much more expensive than the local Tesco Metro, and did not operate a Marie Celeste attitude at the checkouts. Where my parents live in Cheshire, they built a lovely new Sainsbury's about five years ago. But either they didn't check on planning applications or are not very good at lobbying, because last year Tesco opened a massive hypermarket next door. You only shop in the Sainsbury's if you like wide open spaces.

Mr King's task would be hard enough if Sir Peter were not there. But Sir Peter is not one to bow out gracefully and there have been reports that he and Mr King have already clashed. The task of finding a new chairman gets harder by the minute. The task of turning the business around, likewise. Mr King needs his predecessor out, and to have a firm idea of what he wants and how to deliver it - or this hospital pass will turn into a hospital case.

Force isn't with the FRC

The new Financial Reporting Council comes into being on Thursday - April Fool's Day. It is a fine body, unifying regulators who oversee auditing, financial reporting and accountants' conduct. But it is in danger of being impotent.

Over the Atlantic, the US Securities & Exchange Commission is issuing standards, amendments and bylaws as if they were going out of fashion. In Brussels they are bristling about US financial imperialism, and Jacques Chirac, of all people, is making pronouncements about accounting standards. The problem is that while the EU squabbles, America is busy creating international rules by default because it has the largest capital market.

The UK is piggy in the middle. We have the right ideas and possibly the right structures. But we are caught in the crossfire. The FRC is full of good intentions, but it is a popgun in a blunderbuss war.

j.nisse@independent.co.uk