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Despite market analysts such as HSBC praising Mr King’s tenure, Mr King has waived a £1.7m severance payment he was entitled to. He also has a non-compete clause in his contract that means he cannot work for a rival retailer until a year after his departure in July.

The announcement said Mr King will leave the retailer at its annual meeting in July and will be replaced by Mike Coupe, the group commercial director who was widely regarded as the favourite to succeed Mr King

More than £150m was wiped off the value of Sainsbury’s following the announcement, with shares in the company falling 2 per cent.