Sainsbury's is trying to turn its fortunes round

He will inherit the job from current chief executive Sir Peter Davis, who will head the board from March until July 2005.

Sainsbury has been losing ground to rivals in the race for business and is in the midst of a restructuring.

Last autumn it picked Justin King of Marks & Spencer's food arm to replace Sir Peter when he moves up to chairman.

Sir Ian formerly ran brewery firm Bass, and was chairman of leisure group Intercontinental Hotels.

He will join Sainsbury's initially as non-executive deputy chairman, earning �150,000.

Unhappy shareholders

The boardroom changes are intended to create the team that will steer Sainsbury's once Sir Peter Davis is no longer at the helm.

CHRISTMAS RETAIL SALES GROWTH Morrison: +10.2% Tesco: +7.5% Sainsbury: +2% Iceland: +1.9% Note: Like-for-like sales for approx six weeks to 4 January, compared year on year. See Sainsbury's latest share price

Sir Peter's leadership of Sainsbury's came under fire from investors last autumn and there were calls to rethink his move to the chairmanship. Retail analysts speculated Sir Peter might be leaving early.

However, Sir Peter routed his critics in November when he won the backing of the Sainsbury family.

Sainsbury's was once Britain's second biggest grocer after rival Tesco.

But while Tesco shows no sign of giving up the top slot, Sainsbury's has fallen behind Asda and its sales growth has been sluggish compared to smaller rivals.

Over the Christmas period, Sainsbury's sales growth was disappointng compared with its the performance of its main rivals.

Sir Peter has fought back by shaking up Sainsbury's logistics operations, refurbishing stores, stocking more non-food items and promoting Sainsbury's - once known for its Home Counties image - as an inexpensive choice.