Sainsbury clan pounds 1.5bn poorer

The Sainsbury family has recorded a paper loss of pounds 1.5bn, after a slump in the fortunes of their supermarket group, writes Chris Blackhurst. No other family in Britain has ever suffered such a deficit.

Other wealthy families are reaping the benefits of soaring central London property prices, but the Sainsburys have been stung by the decline of the group which has seen it overhauled by Tesco as the top operator and could even push it down to number three. In 1993, when Sainsbury was at one point worth more than pounds 10.4bn as a company, the family's 33.5 per cent shareholding, not taking account of their charitable trusts, was worth nearly pounds 3.5bn. Today, the company is worth pounds 4bn less, at pounds 6.2bn, wiping pounds 1.5bn off the family fortune.

Hardest hit have been Lord Sainsbury, whose fortune has crashed by pounds 167m, to pounds 249m; the Honourable Simon Sainsbury, down pounds 209m to pounds 311m and David Sainsbury, the biggest loser of all, down pounds 749m to pounds 1bn.

David is the chairman of the group and his loss may temper any fallout within the family about his stewardship, which has seen the company recently issue its third profits warning in four years to investors. Profits for the last financial year are likely to be pounds 640-pounds 650m, their lowest level since 1992 and a disappointment for the City which was expecting pounds 713m.

Once acknowledged by retail analysts as the best supermarket operator in the world, Sainsbury's fall from grace was brought about by a mixture of deep conservatism on its part and radical opportunism on the part of one of its competitors, Tesco.

Older members of the family have been slow to relinquish their grip and have been blamed by some City-watchers for holding up the reforms of David, who took over the reins in 1992. At almost every turn, Tesco has stolen a march on its rival, most notably in being the first to introduce loyalty cards.