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Sainsbury's

Coordinates: 51°31′02″N 0°06′30″W / 51.51722°N 0.10833°W / 51.51722; -0.10833
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51°31′02″N 0°06′30″W / 51.51722°N 0.10833°W / 51.51722; -0.10833 Template:Otherpeople4

J Sainsbury plc
Company typePublic (LSE: SBRY)
IndustryRetail (Grocery)
Founded1869
HeadquartersHolborn Circus, London, England
Key people
Philip Hampton, Chairman
Justin King, CEO
ProductsSupermarkets, banking
Revenue£17,837 million (2008)
£530 million (2008)
£329 million (2008)
Number of employees
150,000 (2008)
SubsidiariesSainsbury's Bank
Sainsbury's Supermarkets Ltd.
Sainsbury's Convenience Stores Ltd.
Websitewww.j-sainsbury.co.uk [1]

J Sainsbury plc (LSE: SBRY) is the parent company of Sainsbury's Supermarkets Ltd, commonly known as Sainsbury's (also Sainsbury and JS), the third largest chain of supermarkets in the United Kingdom. The group also has interests in property and banking.

Sainsbury's was founded in 1869 by John James Sainsbury and his wife Mary Ann (née Staples), in London, England, and grew rapidly during the Victorian era. It grew to become the largest grocery retailer in 1922, pioneered self-service retailing in the UK, and its heyday was during the 1980s. As a result of being complacent during the 1990s, Tesco became the market leader in 1995, and ASDA became the second-largest in 2003, demoting Sainsbury's into third place.

The founding Sainsbury family still retain approximately 15% of J Sainsbury plc shares (as of May 2008), through various trusts. The family sold down their stake from 35% in 2005. The largest family shareholders are Lord Sainsbury of Turville with 5.83% and Lord Sainsbury of Preston Candover, who controls just under 3% of the company, and benefits from 1.6% of the equity included in the above.

It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

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Financial performance

Year end Sales(£m) Pre tax profit(£m) Profit for year(£m) Basic eps (p)
22 March 20081 19,287 479 329 19.1
24 March 20071 18,227 477 324 19.2
25 March 20061 16,061 104 58 ³ 3.8
26 March 20051 15,409 15 614 3.5
27 March 20041 17,141 610 396 20.7
29 March 20031 17,079 667 454 23.7
30 March 20021 17,162 571 364 19.1
31 March 20011 17,244 437 276 14.5
1 April 20001 16,271 509 349 18.3
3 April 19992 16,433 888 598 31.4
7 March 19981 14,500 719 487 26.1
8 March 19971 13,395 609 403 22.0
9 March 19961 12,672 712 488 26.8
11 March 19951 11,357 809 536 29.8
12 March 19941 10,583 369 142 8.0
13 March 19931 9,686 733 503 28.5
14 March 19921 8,696 628 438 25.7
16 March 19911 7,813 518 355 23.6
17 March 19901 6,930 451 314 20.8
  1. denotes 52 weeks
  2. denotes 56 weeks.
  3. "One off operating costs" of £152 million incurred. This includes £63 million to terminate the IT outsourcing contract with Accenture.
  4. £168 million before exceptional costs (cost of "turnaround" plan and write off of excess merchandise etc.)

Sainsbury's hopes to meet profit expectations by telling instore staff to recommend a nominated product each month, each member of staff has to try and sell the £1.17 product to customers if they ask for assistance instore.

Current operations

Sainsbury's currently operates 785 hypermarkets, supermarkets and convenience stores. This is split down as 509 supermarkets and 276 convenience stores. It also operates Sainsbury's Bank, which sells financial services, and is a joint venture with HBOS; Sainsbury's Online internet shopping services; and has a property portfolio worth £8.6bn (as of March 2007).

It is the third largest supermarket chain in the UK, and places an emphasis on a higher quality grocery offering compared to its other large rivals.

According to Taylor Nelson Sofres rankings published in January 2008, Sainsbury's market share was 16.4% compared to Tesco's 31.5%, ASDA's 16.7% and Morrison's 11.4%.[1]

According to CACI, as of 2006, Sainsbury's has market dominance in 8 postcode areas; TQ (Torquay), SN (Swindon), GU (Guildford), RH (Redhill), DA (Dartford), SE (South East London), EN (Enfield) and WV (Wolverhampton).[2]

It is particularly strong in London and the South-East, where it is based, and although it has a national store portfolio, it is biased towards the South-East.

Store formats

Sainsbury's Holywood Exchange, the company's eighth Northern Irish store.
Sainsbury's checkouts, showing the 'Greenwich Blue' colour scheme

The supermarket chain operates three main store formats; regular Sainsbury's stores ('Main Mission'), Sainsbury's Local and Central (convenience stores and smaller supermarkets in urban locations - 'Mixed Mission') and Sainsbury's 'Main Plus' (hypermarket) stores.

At the end of its 2005/06 financial year Sainsbury's store portfolio was as follows. [3]

Format Number Area (ft²) Area (m²) Percentage of space
Supermarkets 490 15,916,000 1,467,000 95.1%
Convenience stores 298 821,000 76,000 4.9%
Total 788 16,737,000 1,543,000 100.0%

Traditionally, Sainsbury's was most present in the areas around London and south-east England. The company acquired the Midlands-based Thoroughgood in the 1930s. Expansion since 1945 has given the company national reach, although the chain is not as represented in Scotland as other chains such as Tesco, and Morrisons (as Safeway dominated Scotland before being taken over by that company). This is partly due to the fact that Sainsbury's missed out on the bidding war for William Low to Tesco in the 1990s.

Since 1999, Sainsbury's stores have received a new look. The old 'J SAINSBURY' fascia, used since 1869, was scrapped and 'Sainsbury's' was used. Sainsbury's stores are more colourful than those of rivals, and stores refurbished post 1999 feature dark blue walls, with bright orange brand wall panels, along with grey shelving and checkouts. Individual counters also have different brightly coloured panels behind them. The new flagship store in Greenwich, South London, was the first to receive this new-look, lending the name 'Greenwich Blue' to describe the in store colour scheme. This format was subsequently rolled out across the entire store estate. Following the introduction of the 'Try something new today' slogan in 2005, stores are refurbished with cream walls, and dark red and dark blue signage, along with cream coloured shelving and checkouts. New purple coloured staff uniforms are being introduced to all stores over the next year.

However, some stores have still been under-invested as of 2008, despite a store refurbishment programme since 1999. One such store is in Princess Square, Bracknell, which still features the old 'J SAINSBURY' logo, with lime green and dark brown tiles inside, fashionable in the 1970s.

Supermarkets and hypermarkets

The largest format of stores is internally branded 'Main Plus'. These are hypermarkets, which between 1977 and 2005 were branded as 'Sainsbury's SavaCentre'. However, as they got more integrated into the main chain, these stores were re-branded under the main Sainsbury's brand. This happened both in terms of back-office administration (the SavaCentre HQ In Wokingham closed down in the 1990s) and in terms of store decoration, (which became identical to the Sainsbury's 'Main Mission' outlets). They occupy a wide range of both grocery and non-food, as a 50:50 split similar to Tesco Extra, and can therefore accommodate the weekly shop and more. These large stores have over 45,000 sq ft (4,200 m2) of sales area, and original SavaCentre's include Merton, Colney and Sydenham in London, and Calcot in Reading. A large 100,000 sq ft (9,300 m2) 'Main Plus' store is planned for Slough, on the site of the old Co-op store, which Tesco used while they were building their controversial 100,000 sq ft (9,300 m2) Extra store, currently the largest in the UK.

The core 'Main Mission' store format, which is a typical Sainsbury's supermarket, is between 20,000 sq ft (1,900 m2) and 48,000 sq ft (4,500 m2). The average size of a Sainsbury's supermarket is 34,000 sq ft (3,200 m2), the lowest amongst the 'Big Four'. This is because Sainsbury's were criticised for not building larger stores and extending its SavaCentre format in the 1990s. They concentrate on the weekly family shop. Food and non-food are split two thirds and one-third respectively. Typical counters include Food to Go, Fishmonger, Butcher, Delicatessen, Bakery, Salad Bar and Beers, Wines and Spirits.

Both of the above formats trade simply as Sainsbury's, so you cannot tell which format you are in unless you know what to look for. Customers will notice a larger product range, particularly non-food in a 'Main Plus' store.

Convenience stores

Most of the major chains: Sainsbury's, Tesco, Marks and Spencer, Somerfield and The Co-operative operate convenience stores; as of 2008, Asda and Morrisons do not have presence in this area of the market.

The 'Mixed Mission' format incorporates the Sainsbury's Central and Sainsbury's Local formats. Sainsbury's Central stores are between 7,000 sq ft (650 m2) and 20,000 sq ft (1,900 m2), which is a mini supermarket, and Sainsbury's Local stores are between 2,000 sq ft (190 m2) and 6,000 sq ft (560 m2) in size, carrying a top-up shop and grab-and-go offer. Sainsbury's Local stores have different decoration to the other two formats - 'Main Mission' and 'Main Plus'.

The Sainsbury's Local stores on Shell petrol forecourts are set to close down due to being unprofitable.

Sainsbury's Central will eventually be phased out, to be replaced by the Sainsbury's 'Main Mission' format. This was announced in 2004, but several Sainsbury's Central stores, including Holborn and Reading, have yet to be refurbished and converted.

As well as its own Local and Central stores Sainsbury's has expanded through acquisition of existing chains (Bell's Stores, Jackson's Stores, JB Beaumont, and SL Shaw Ltd).

Sainsbury's initially retained the strong Bells and Jacksons brands. For example, refurbished stores were called Sainsbury's at Bells or Sainsbury's at Jacksons. These were effectively Sainsbury's Local stores with a revised fascia, retaining some features of the former local chain. Unrefurbished stores retained the original brand and logo, but still offered Sainsbury's own brand products, pricing and some point of sale, without accepting Nectar cards. The old websites were also retained with some Sainsbury's branding.

This was an experimental format and on 4 May 2007 it was announced that all stores would be re branded as Sainsbury's Local, with the management teams of the smaller stores integrated into Sainsbury's own teams.[4]

Checkout equipment

Sainsbury's currently uses NCR Point of Sale equipment operating the Retalix "Storeline" software, replacing the Fujitsu-ICL POS systems used during the 1990s. Each till has a PLU Group system and on non-barcode and products that may not always have a code to scan, they can easily scan the PLU groups to find the right product. Nectar points can be redeemed in the form of rewards at the checkouts.

They have also, recently introduced Self Service Checkouts (2008) in Sainsburys Local Store. They currently have only one store which uses them, but it is aimed to introduce them across all there Sainsburys Local/Sainsburys Central Network. After Success at a Sainsburys Local Store located in Oxted, Surrey.

Each till receipt includes a two-line footer showing the store number (prefixed with 'S'), transaction number (prefixed with '#') on the day of purchase, cashier number (prefixed with 'C'), checkout number (prefixed with 'R') and time and date.

Marketing and branding

Since 1998 Jamie Oliver has been the public face of Sainsbury's, appearing on television and radio advertisements and in-store promotional material. The deal earns him an estimated £1.2 million every year. In the first two years these advertisements are estimated to have given Sainsbury's an extra £1 billion of sales or £200 million gross profit. [5]

A Sainsbury's Active Kids banner outside a school. Tokens are collected at stores, and are redeemed for sports equipment.

Sainsbury's currently uses the "Try something new today" slogan which was launched in an effort to make consumers venture into purchasing more varied goods. The television adverts are also often accompanied by The Polyphonic Spree's Light & Day. Over the years, Sainsbury's has used many slogans:

  • "Quality perfect, Prices Lower" The slogan used on the shop-front of the Islington store in 1882.
  • "Sainsbury's For Quality, Sainsbury's For Value"- Used in 1918 above the Drury Lane store.
  • "Sainsbury's. The Essentials are the Essentials."*
  • "Good Food Costs Less At Sainsbury's" — Used from the 1960s to the 1990s. Described by BBC News as "probably the best-known advertising slogan in retailing." [6]
  • "Sainsbury's - Everyone's Favourite Ingredient" — Used in a series of TV commercials in the 1990s which featured celebrities cooking Sainsbury's food.
  • "Fresh food, fresh ideas"-used in 1998
  • "Value to shout about" — A 1998/1999 campaign fronted by John Cleese which was widely claimed to have been a major mistake. Sainsbury's said it actually depressed sales. However, the company had been losing sales for years because of the rise of rival Tesco. [7]
  • "Making Life Taste Better" Introduced 1999 and used until May 2005.
  • "Try something new today" Introduced in September 2005. Replaced on carrier bags, till receipts and all other corporate branding from this point.

In 2008 they created a shopping incentive by showing that, when shopping at Sainsbury's, you can feed your family for only five pounds. The incentive, called "Feed your family for a fiver", with the flagship of "Meatballs 'n' More" has been advertised on British television channels, with Jamie Oliver cooking for a family.

Sainsbury's Active Kids is a loyalty voucher scheme by Sainsbury's.

Product ranges

The own label Basics range is its low cost products

A large store typically stocks around 50,000 lines of which around 20% are "own-label" goods. These own-brand lines include:

  • Basics: an economy range of around 500 lines, mainly food but also including other areas such as toiletries and stationery. The Basics range uses minimal packaging with simple orange and white designs, to keep the price as low as possible. Sainsbury's Local stores sell none or very few of these lines. Equivalent to Tesco's Value, ASDA's Smart price and Morrison's Value (formerly Bettabuy)
  • Taste the Difference: around 1100 premium food lines, including many processed foods such as ready meals and premium bakery lines. Similar to ASDA's Extra Special, Tesco Finest and Morrison's The Best.
  • Different by Design: a smaller range of premium non-food lines, including flowers which were previously branded "Orlando Hamilton".
  • Kids: these lines are for children. In 2006 these lines replaced the Blue Parrot Café range.
  • Be Good To Yourself: products with reduced calorific and/or fat content.
  • Free From: over 75 product lines.[8] These products are suitable for those allergic to dairy products. (The majority of these are dairy and gluten/wheat free)
  • Sainsbury's Organic (SO Organic): Around 500 lines of food / drink which is not derived from food stuffs treated with fertiliser or pesticides.
  • Fair Trade: Over 100 fair trade products. [9] - All bananas sold at Sainsbury's are now fair trade. The own-brand tea and coffee is being converted to Fairtrade over the next three years. [10]
  • Super NaturalsTM: A range of ready meals with healthy ingredients.
  • TU - own brand clothing range, which replaced the Jeff Banks designed range, Jeff & Co.
  • TU Home - a range of home products, such as lighting, rugs, and kitchen products. Currently in two stores - Sydenham, and Oldbury, but being expanded to other stores throughout the year.

Online service

Sainsbury's operates an internet shopping service branded as "Sainsbury's Online". To use this service customers choose their grocery items online. Pickers then collect the required items which are delivered to customers from a local store by van. This is available to about 75% of the UK population. The service is run from larger stores which carry the full product range - over 100 stores operate an Online service.

It was previously called 'Sainsbury's to You' and 'Sainsbury's entertain You', and prior to that it was called 'Sainsbury's Orderline'.

Sainsbury's Bank

Main article: Sainsbury's Bank

In 1997 Sainsbury's Bank was established - a joint venture between J Sainsbury plc. and the Bank of Scotland (now HBOS).

Services offered include car, life, home, pet and travel insurance as well as health cover, loans, credit cards, savings accounts and ISAs.

Distribution

Sainsbury's supply chain operates from ten regional distribution centres (RDCs), with two national distribution centres for slower moving goods at Stoke and Rye Park, and two frozen food facilities, at Elstree and Stone. In addition, the depot at Rugby tranships floral and general merchandise to the RDCs, and Pindar Road depot tranships merchandising units.[11] Each depot is given a "Depot Code".

+ Tamworth is a former Safeway distribution centre. It was purchased from Morrisons in order to take on the ambient store deliveries from the Hams Hall RDC, during the rip out of the automated ambient process. When the changes have been completed at Hams Hall and the ambient deliveries return from Tamworth, the new depot at Tamworth will operate the distribution function of the TU line.

The work started on ripping out the automated ambient processes at Hams Hall in May 2008 and is due for completion around September 2008[12] when the ambient processes will return to Hams Hall and will be completed in a traditional manual process.

During the changes Hams Hall continues to process Chill and Produce deliveries; the chill process is to continue using an automated system and produce will remain as a manual process.

A similar rip out of the ambient process happened at Waltham Point during 2007 when the ambient processes were transferred to Buntingford.

++ Sherburn is a former Somerfield depot bought in 2008 and is intended to be a national DC for the Local Stores network it will also take over the work of the Maltby Depot which will close.

Sainsbury's also has a depot called Buntingford. This depot is usually not in operation; however Sainsbury's still own the site and continue to use the depot at busy times, particularly at Christmas when Waltham Point gets very busy. Buntingford is ready for use as an emergency depot for the rest of the year.

Sainsbury's Supply Chain is in the process of changes involving other depots the details of which will be added after the colleague consultation process has been completed.

Originally Sainsbury's ran its own distribution network. However after an industrial dispute with their drivers in the 1970s, and with the intention of streamlining and consolidation, much of the distribution is now contracted out - to distribution specialists such as TDG, DHL/Exel Distribution and NFT.

Sainsbury's drivers are employed on flexi-contracts. The staff split is 20% Agency Staff and 80% Sainsbury's staff.

See also

References

  1. ^ "Sainsbury's reports rise in sales". BBC News. 2008-01-10. Retrieved 2008-01-10.
  2. ^ "Tesco 'top' in more parts of the UK". BBC News. Retrieved 2008-05-22.
  3. ^ "Company profile" (PDF). J Sainsbury plc. July 2006. Retrieved 2006-10-11.
  4. ^ "Sainsbury's axes retail sub-brands". Convenience Store. 2007-05-04. Retrieved 2008-11-11.
  5. ^ Wheeler, Brian (2003-06-11). "Sainsbury banks on fresh Oliver ads". BBC News. Retrieved 2006-10-11.
  6. ^ "Stores at war: winning secrets". BBC News. 1999-06-04. Retrieved 2006-10-11.
  7. ^ Pollock, Ian (1999-11-23). "What's gone wrong for Sainsbury's?". BBC News. Retrieved 2006-10-11.
  8. ^ "Our ranges". Sainsbury's. Retrieved 2008-11-11.
  9. ^ "Supermarkets switch to Fairtrade bananas". TimesOnline. 2006-12-13. Retrieved 2007-03-25.
  10. ^ "Sainsbury's complete Fairtrade products list". Sainsbury's. February 2007. Retrieved 2007-03-25.
  11. ^ "Sainsbury's Information Direct". Sainsbury's. Retrieved 2008-11-09.
  12. ^ "Sainsbury's Rip-out". Sainsbury's. Retrieved 2008-11-09.
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