Sainsbury’s is targeting £1bn in cost savings over the next three years as part of its new strategy launch this morning.
‘Next Level Sainsbury’s’ is intended to build on the group’s ‘Food First’ strategy launched in 2020, with eight new commitments to be delivered by March 2027, including growing food volumes ahead of the market and generating free cashflow of £1.6bn.
However, the £1bn in savings will incur a one-off cost of about £150m over the course of the three years.
Sainsbury’s also kicked off a £200m share buyback programme to return cash to shareholders over the next financial year.
The supermarket outlined a plan to bring a bigger food range to more customers, with a focus on value and enhancing its fresh offering.
Sainsbury’s added that it currently did not offer its full range to enough customers in enough locations, with only 15% of its supermarkets offering the full food range and some of the highest potential stores not stocking the grocery range that customers expect.
The group will also focus on continuing to build its Nectar loyalty platform, forecasting an incremental £100m of Nectar360 profit contribution over the three years to March 2027 (previous guidance was £90m over the four years to March 2026).
The new strategy includes a plan to build on Argos’s strengths in convenience and value, growing frequency and spend through improved range and relevance.
Sainsbury’s also highlighted an increase in capital expenditure to between £800m and £850m a year and an additional £70m investment in FY 2024/25 in its EV charging network.
CEO Simon Roberts said: “Our ‘Food First’ strategy has delivered on its promise over the last three years, making Sainsbury’s a stronger business with a much sharper position on value and a major refocus on our innovation.
“Customers have recognised the progress we’ve made, as our market share gains have shown.
“Our ‘Next Level Sainsbury’s’ strategy is about giving customers more of what they come to Sainsbury’s for - outstanding value, unbeatable quality food and great service.
“Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsburys, Argos and Nectar.”
Shares in Sainsbury’s sank 2% to 270p as markets opened this morning.
PZ Cussons has slumped to a £90m operating loss as the ongoing devaluation of currency in Nigeria slammed the personal care group.
Revenues in the six months to 2 December 2023 also plunged by £60m year on year (a 18% fall) to £277.1m, which was almost all the result of the decline in value of the Naira in Nigeria, which is a big market for the group.
The Imperial Leather owner also downgraded its adjusted operating profit expectations for the year from £61.5m-£68.2m to £55m-£60m because of the Nigerian macroeconomic situation.
However, PZ Cussons reported like-for-like sales growth of 2.2% in teh half, driven by a 7% hike in prices and offset by a 4.8% fall in volumes.
CEO Jonathan Myers hailed the turnaround delivered at the group in the UK personal care business and highlighted a ninth consecutive quarter of like-for-like revenue growth.
He said PZ Cussons was a “stronger business than when we launched our new strategy”.
“The most significant challenge we have faced by far has been the devaluation of the Nigerian Naira, which is today around 70% weaker than a year ago, representing the biggest drop in the currency’s history,” he added.
“As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the FY24 results. Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our FY24 results.
“As a board, we have taken the prudent step to reduce the interim dividend in light of the devaluation.”
Just Eat Takeaway has appointed Mayte Oosterveld as CFO.
She joins from Plus Holding, a Dutch supermarket retailer with an annual turnover of €5bn, where she served as chief financial officer.
Just Eat said Oosterveld was “an experienced, all-round financial specialist”. Prior to joining Plus, she gained international work experience, both financial and strategic, at Goldman Sachs and Ahold Delhaize.
Oosterveld will be succeeding Brent Wissink, who announced in July last year that he would be stepping down as CFO at the AGM in May 2024.
Chairman Dick Boer said: “I am very pleased to welcome Mayte Oosterveld to Just Eat Takeaway.com. I have had the pleasure of working with Mayte previously at Ahold Delhaize, where she headed the mergers & acquisitions department, expanded her experience in leading financial planning and performance and driving the synergies of the combined company and was responsible for many transactions, including the merger with Delhaize.
“She will bring strong finance leadership to the management board.”
The FTSE 100 opened down 0.2% to 7,668.69pts this morning.
Early risers included Bakkavor, up 2.6% to 95.4p, Science in Sport, up 2.1% to 16.9p, and Kerry Group, up 1.6% to €81.14.
PZ Cussons plunged 12.5% to 112p on the back on this morning’s profits warning, while Cranswick is down 4% to 3,934p and Naked Wines is down 1.8% to 66p.
Yesterday in the City
The FTSE 100 rose 0.9% to 7,681.01pts yesterday.
While it was a quiet day for fmcg market news, risers included McBride, Virgin Wines and Associated British Foods, up 8.7% to 75p, 6.9% to 37p and 1.2% to 2,273p.
Wynnstay and AG Barr were among the fallers, down 2.5% to 394.8p and 1.6% to 542p respectively.