Sainsbury’s achieved its “strongest year” for grocery sales by “winning the weekly shop” from its rivals, CEO Simon Roberts has claimed.
“We’re the only full-choice grocer taking share from both the limited-choice supermarkets, and what I would call the more expensive grocery retailers,” said Roberts, meaning more customers were now choosing to do their “main weekly shop” with Sainsbury’s.
Grocery sales grew 9.4%, and with volumes up quarter on quarter throughout the financial year to 2 March, “today’s results are all about Sainsbury’s winning in food”, Roberts said. “Food is now three-quarters of this business, and it really is now firing on all cylinders.”
Roberts credited continued volume growth and share gains on the grocer’s ‘food first’ strategy over the past three years, and now its new Next Level strategy, which focused on improving value perception and choice.
The introduction of Aldi Price Match, Nectar Prices and now Everyday Low Pricing schemes were funded by a £780m investment in price cuts, including £220m in the last year on 4,000 items, he said.
Over 95% of big baskets included Nectar Prices, saving an average of £12 on an £80 shop, it claimed.
As food inflation continues to fall, customers were increasingly “balancing baskets”, with “less evidence” of trading down to cheaper lines, like Sainsbury’s entry-level Stamford Street, while premium Taste the Difference sales were up by 12%.
Sales across Argos and Sainsbury’s GM ranges remained flat. A drop-off in customers buying energy-saving electronics after last year’s energy costs spikes, along with online shoppers using Argos instead due to the Royal Mail strike, were partly to blame.
Sainsbury’s also had a “more difficult year” in clothing, which CFO Bláthnaid Bergin put down to “some misses on our part” and a “promotional market”.
Store investment work underway
Sainsbury’s achieved a 15.3% of the UK grocery market according to latest figures released by Kantar this week, up from 14.9% the same period last year.
Having built a “winning platform on value”, Roberts is focusing the next stage of Sainsbury’s Next Level strategy on further improving its range and availability.
The supermarket is now able to offer 80,000 SKUs across both Sainsbury’s and Argos. However just 15% of Sainsbury’s stores currently stock the full range. To improve that, Sainsbury’s will invest in 180 stores over three years to improve the offer.
As part of the work, Sainsbury’s will roll its free-from aisle into all stores. It had been trialling the format in 20 stores since November, as revealed exclusively at the time by The Grocer.
Sainsbury’s will also reset its petfood category, as well as introducing new ranges and formats to its beer, wines and spirits aisles, Roberts said.
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