Sainsbury’s has unveiled a new three-year plan to double down on its food and stores offer, enhance the personalisation of its Nectar loyalty scheme and save a further £1bn in costs by 2027.
The new strategy – dubbed Next Level Sainsbury’s – is the next stage of Sainsbury’s Food First Strategy which it has pursued over the past three years. This has seen it take back market share from the discounters and improve availability in stores.
Food is once again a significant focus of the new strategy, with Sainsbury’s intending to make its stores “first choice for food” in the eyes of customers in order to further grow its basket size. Currently, only around 15% of Sainsbury’s stores stocked its full food range, the supermarket said, which affected online range and perception of availability.
Sainsbury’s plans to roll more of its full range into stores, particularly in fresh food categories. The work will focus on around 180 of Sainsbury’s “highest potential stores” over the next three years. It will see Sainsbury’s “tighten” its range of GM and clothing in some stores to make more space for clothes. Only around half of Sainsbury’s customers currently bought its general merchandise and clothing products, Sainsbury’s said.
The retailer also plans to add around 75 new Sainsbury’s local stores by the end of 2027.
Loyalty is another major focus, following the successful launch and rollout of Nectar Prices over the second half of last year. Nectar now has 16 million members, and Sainsbury’s intends to grow this further.
It will see Sainsbury’s roll out its personalised Your Nectar – currently available online and to SmartShop customers – “more widely”, and further integrate Nectar across its digital platforms. Due to the growth of the scheme, Sainsbury’s is also targeting greater revenues from advertising and data, and is now forecasting Nectar 360 – its digital arm – to make £100m in profit over the three years.
“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,” said Sainsbury’s CEO Simon Roberts. “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 Sainsbury’s, Argos and Nectar.
“We’re going to build on what’s driven our success since 2020,” Roberts said. “We’re determined to be first choice for food, ensuring more customers in more of our stores can enjoy more brilliant Sainsbury’s food. That means more space for our food offer, while still delivering the general merchandise products customers want from us. That way, not only will we find more ways to delight new and existing customers, we will also continue growing volume market share.”
Aside from food and loyalty, Sainsbury’s also intends to extend into more selective ranges and launch new categories at Argos, after an improvement in availability across the business following a wide-scale reshuffle of the Argos logistics network.
A large part of this will come through the sale of more third-party products, which would enable a “stockless operating model” Sainsbury’s said.
It’s targeting a further £1bn in cost savings across the business.
“While I’m proud of the progress we’ve made to date, we’re only just at the beginning of rediscovering quite what this business is capable of,” Roberts added. “By taking Sainsbury’s to the next level, delivering for customers and colleagues, we will also deliver enhanced returns for shareholders through a share buyback and committing to a progressive dividend.”