Sainsbury's shows promise in final quarter, getting boost from online groceries

Sainsbury

Photo courtesy of Sainsbury's

Despite a decline in like-for-like retail sales overall, Sainsbury's said its grocery sales increased 0.4% during the Christmas 2019 quarter and that its online grocery sales rose 7.3%.

Britain's second-leading supermarket said it was heartened by results that showed its own-brand labels showed growth over the period as well as its strong performance in the produce aisles.

“We gave our customers a great combination of quality food at good prices this Christmas, and we delivered a standout performance operationally," Mike Coupe, Chief Executive of J Sainsbury plc, said. "We have a real sense of momentum in Sainsbury’s and investment in our stores and improvements to service and availability have led to our highest customer satisfaction scores of the year. 

“Our digital investments are also paying off and over 20% of our business was online in the quarter. Groceries Online had record order numbers throughout the Christmas period and customers are increasingly choosing to shop with SmartShop in our supermarkets. Argos had its biggest digital Black Friday to date and record sales through mobile and via Argos Click and Collect."

Sainsbury's says a record 385,000 customers ordered via Groceries Online in the week before Christmas.

Though Sainsbury's admits that retail markets remain highly competitive and that the consumer outlook is uncertain, it believes a few strategic moves will help to start off the new year.
  • During January, it is cutting the price of its most popular produce lines to 60p, including apples, mangos and avocados. It also plans to hold the price of around 1,200 products that customers buy most frequently for two months.
  • Its Taste the Difference volumes increased over the quarter, and it launched 70 new Taste the Difference Christmas products
  • It launched its ‘Plant Pioneer’ brand, adding 31 new products to a range of more than 200 meat alternatives. New products include banana blossom, a popular alternative to white fish, Smokey Vacon Rashers and meat-free Southern Fried Bites. Sainsbury's says its meat-free ranges outperformed the market over the quarter.

Among notable highlights, Sainsbury's opened 10 Argos stores in its supermarkets, bringing the total to 298, and added six new convenience stores in the quarter, including its first “large convenience” format store at Woodhall Spa.

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