Sainsbury’s rejects new moves to relax Sunday trading laws

Sunday trading rules should remain, Sainsburys chief executive Justin King says on his last day in the job.

He insists he won't be choking back the tears. Today, Justin King says farewell to Sainsbury's after a decade as chief executive.

All the traditional retailers have suffered in that time as discounters have vacuumed up price hungry shoppers.

Sainsbury's has fared better than most - and certainly doesn't find itself in the tricky Tesco position of plunging like-for-like sales and declining profits.

Ask any retail expert to choose which chief executive they would rather be - Mr King or his opposite number at Tesco, Philip Clarke, and most would plump for the former.

Sainsbury's is still expanding and has no intention of pulling out of the "space race".

I chatted to Mr King today ahead of his final annual general meeting, held in the Queen Elizabeth II Conference Centre in central London.

We met in the newly refurbished Sainsbury's store in Wandsworth, south-west London.

Mr King says the shop epitomises Sainsbury's - very clearly a grocery shop with other services like clothing and the cafe upstairs.

"Customers need to know exactly what they are getting when they walk through the door," he told me.

Sunday trading

I ask Mr King about one interesting development in the retail pipeline - another attempt to relax the UK's somewhat messy Sunday trading laws.

I have been told that this will come via amendments to the Deregulation Bill which will start being considered in the Lords in the autumn.

Lord Borwick will lay out the amendments which were first drawn up by the Conservative MP, Philip Davies - a doughty campaigner on overhauling the 20-year-old Sunday trading laws which restrict larger shops to opening for six hours.

It is worth just hearing Mr Davies' arguments before I reveal Mr King's reaction.

Mr Davies says it is illogical that smaller stores are allowed to open for longer - and that grocery deliveries, for example, can be made at any time - but that large supermarkets and other stores have to shut up shop.

"I'd like to see Sunday trading deregulated - I'd like to see it being the same as Scotland where all businesses can trade any time, any day of the week," he told the BBC.

"The law was made in 1994 with small shops in mind to try to protect them from big shops.

"But today's small shops are made up of Tesco Express and Sainsbury's Local. The idea that those shops need to be protected is absurd and anachronistic. It is not protecting any small shop or any employee."

Mr Davies said that changes would boost economic growth and provide employment.

'British compromise'

Mr King is not convinced. "We are not supportive of it," he said. "It is not a big issue for customers. There are many other burdensome areas of legislation that the government can put their mind to.

"The status quo is a very happy British compromise."

So, what are these other "burdensome regulations"?

Mr King lists them for me - the fact that rules on charging for plastic bags and the sale of alcohol and cigarettes can vary between England, Scotland, Wales and Northern Ireland.

And then there are the recycling rules, which can be as as complicated as solving a Rubik's cube. Mr King points out that Sainsbury's struggles with 90 different local regimes around the UK on what coloured bin to put an empty tin in.

"Complexity costs money," he said. "Simpler regulation would lead to lower prices in the shops."

Scotland's referendum

Cross border issues, so to speak, could become a whole lot more complex if Scotland voted "yes" to independence in the September referendum.

Mr King said that - of course - it was a matter for the Scottish people to decide. He also said that the argument that an independent Scotland could lead to higher food prices would depend on the form any independence takes.

"The question is - how independent would Scotland choose to be?" Mr King said.

"If it had a different currency, a different tax regime and different rules and regulations - if business became more complex - of course that would be a very significant issue.

"If an independent Scotland chose - on issues that affect retailers like us - to largely stay with a regime that looks just like we have in the rest of the UK, that would be a relatively small impact."

Supporters of independence say that a "yes" vote would be good for the economy.

"Scotland is an attractive place to do business and it will be an even more attractive place to do business after independence," said David Cairns, member of Business for Scotland and executive chairman of Prismtech, an internet technology business based in Stirling.

"I know about selling across borders; 97% of Prismtech's sales are international and we deal in multiple currencies under multiple regulatory regimes. We make money doing that and other companies can do the same."

'Robust health'

Mr King is proud of his time at Sainsbury's.

Nevertheless he leaves after a fall in quarterly like-for-like sales - the first in his time as chief executive. (The two things are not connected, by the way - Mr King made his decision to leave a long time ago).

He insists he is not aping Sir Alex Ferguson who some consider left David Moyes will an in-tray full of problems. Mr Clarke might feel similarly at Tesco after the departure of Sir Terry Leahy.

"Doing a Ferguson" is now business shorthand for bad succession planning.

"Leaving is one of the hardest and one of the most important decisions a chief executive takes," Mr King said, arguing that underlying profitability is still rising at Sainsbury's and the business is in "robust health".

"You need to leave the business in safe hands and with great prospects."

Mike Coupe, Sainsbury's new chief executive, will hope that both of are true. And that he lasts a little longer than Mr Moyes.