Jim Armitage: Don’t get mad, Sainsbury’s, get even. It’s the only way to beat discounters

Outlook Sainsbury’s new chief executive, Mike Coupe, seemed so friendly and unflappable on the radio this morning. Straight out of Justin King’s smoothie playbook.

Yet when he was asked more challenging questions by City investors later, he snapped. HSBC’s David McCarthy’s suggestion that the company was becoming troubled was met by a barked “Ridiculous!”

He was rattled, and rightly so. Sainsbury’s is in trouble. Asda and Morrisons have recognised the danger of Aldi and Lidl’s price challenge earlier than Sainsbury’s – both have started investing £1bn in price cuts to catch up with the discounters. As a result, Sainsbury’s sales growth is falling faster than Morrisons’ for the first time in years.

Mr Coupe explains his value ranges are cheaper than rivals’, but that message is too nuanced. Shoppers want low prices across the board and will drive past Sainsbury’s if they can buy cheaper elsewhere.

So he must respond to that with some serious, painful, investment. And quickly. If he does, and the strategy works, he can be as mardy as he likes with City analysts.