Sainsbury's Roberts is leading internal contender to be next CEO - sources

* CEO Coupe could depart this year

* Roberts joined Sainsbury's as retail director in 2017

* Sainsbury's expected to conduct external search too

By James Davey

LONDON, Jan 10 (Reuters) - Sainsbury's retail and operations
director Simon Roberts has emerged as the internal favourite to
succeed Mike Coupe as chief executive if the supermarket group
opts to promote from within, two people with knowledge of the
matter said.

Coupe has been at Sainsbury's, Britain's No. 2
supermarket chain, since 2004 and group CEO since July 2014.

Though no timetable has been announced for his departure, he
has faced questions about his future since April when Britain's
competition regulator blocked Sainsbury's attempt to take over
Walmart owned rival Asda for 7.3 billion pounds ($9.5
billion).

Coupe was the architect of that deal and Sainsbury's share
price has fallen 20% over the last year. Like its big four
supermarket rivals, including market leader Tesco and
Morrisons, Sainsbury's is continuing to lose market
share to German-owned discounters Aldi and Lidl.

Despite seeing his grand merger plans thwarted Sainsbury's
shareholders overwhelmingly backed Coupe's reappointment in July
and the following month, the group reiterated that Coupe had the
board's full support. In September, he presented an updated
strategy designed to show Sainsbury's could prosper on its own.

Coupe will turn 60 this year.

"Lots of things would point towards it (Coupe's departure)
being this year," one of the people said.

"The annual general meeting (in July) would make the most
logical last day."

Sainsbury's declined to comment.

Analysts had identified three internal candidates - Roberts,
chief financial officer Kevin O'Byrne and food commercial
director Paul Mills-Hicks - after the previous frontrunner,
Argos boss John Rogers, quit in October to join advertising firm
WPP.

Roberts has since emerged as the clear internal favourite,
though good corporate governance dictates that Chairman Martin
Scicluna would also conduct a thorough external search process,
the people said.

Roberts joined Sainsbury's in July 2017 as central retail
and operations director responsible for stores, central
operation and logistics.

Before that he was executive vice president of Walgreens
Boots Alliance and president of health and beauty
retailer Boots. Prior to this Roberts was managing director of
Boots UK, where he was responsible for leading retail and
pharmacy activities in over 2,500 stores across the UK and
Ireland.

Earlier in his career Roberts spent 14 years at Marks &
Spencer, where he had roles in stores and operations.

If he does get the job it will mean Britain's two biggest
supermarket groups - market leader Tesco and Sainsbury's - will
be run by Boots alumni.

Ken Murphy, a former joint chief operating officer at Boots
UK & Ireland, will succeed Dave Lewis as CEO of Tesco in the
summer.

Sainsbury's updated on Christmas sales on Wednesday. Core
sales slipped as a drop in demand for toys and gaming eclipsed a
solid performance in food.
($1 = 0.7652 pounds)

(Reporting by James Davey, editing by Louise Heavens)