Sainsbury’s celebrate 140th anniversary with sales boost

Supermarket chain Sainsbury’s has announced a strong preliminary sales performance for the 52 weeks to 21 March 2009, in the same year the store celebrates its 140th anniversary.

The store has announced total sales growth of 5.7% to £20.4 billion for the previous year, and like-for-like sales (excluding fuel, including VAT) up 4.5%. However, despite these areas of growth, profit before tax has suffered a blow, with a fall of 2.7% to £466 million.

With stiff competition for online deliveries from supermarket rivals including Tesco’s and Ocado, Sainsbury’s has also reported annual online food sales of £500m, and says it plans to launch non-food online in the first half of the 2009/10 trading year.

Chief Executive Justin King said: “Our business is growing because we have responded quickly and effectively to a rapidly changing environment.

“Fixing fundamental parts of our operation through our ‘Making Sainbury’s Great Again’ recovery programme has placed the business in a strong position. Although consumer confidence in the UK has declined during the year, our performance improved as a result of the strength of the Sainsbury’s brand and actions we have taken to adjust our offer to changing customer trends.”

The supermarket also attributed the success for the year on the increase in variety of products offered for a range of prices – namely the ‘good, better, best’ product range, which they say “has provided customers with the flexibility to change what they buy, rather than where they shop.” This may have helped improve the retention of many customers, who may have been on the brink of changing to a traditionally lower priced stores such as ASDA.

Sainsbury’s convenience stores will enjoy a boost with plans to open 50 new stores in 2009/10 with a further 100 in 2010/11.

Discussing the rich tradition that has kept Sainsbury’s at a strong pace for 140 years, Mr King commented: “It [Sainsbury’s] has a heritage of offering customers great products at fair prices, through a variety of economic trading periods, and we have developed our offer to compete and grow in what has been a very challenging period for the UK retail industry.”

The supermarket says its 120,000 staff will share an annual bonus of £60m.