Sainsbury’s annual results show that its grocery volume market share performance has improved considerably, though its chief executive warned that the year ahead will come with challenges for the business.
As part of its Food First strategy, Sainsbury’s said that it is focusing time, energy and investment in news products at low prices and great customer service.
To do so, it has invested over £560 million in keeping prices lower over the last two years, £10 million more than the commitment announced in December. The retailer said that the investment is helping it significantly improve its price position against all our competitors by as much as 16%.
In 2023, Sainsbury’s has also launched its Nectar Prices scheme, offering discounts to every Nectar customer in supermarkets and online, building on Your Nectar Prices which offers personalised discounts. The most active Your Nectar Prices users are saving almost £200 a year on their shopping.
The retailer added that it was “exceeding innovation targets” by launching more Taste the Difference products, helping to win market share around big events as customers increasingly celebrate at home.
It was also reported that the supermarket is planning to reduce its own brand range of salted butter from £1.99 to £1.89 for 250g packets. It is also reducing the price of its own-brand bread to 75p from 85p. The news comes as global wholesale prices for food have been in decline despite high food inflation in the UK.
Sainsbury’s 2023 financial highlights
- Retail sales up 5.2%, ex. fuel sales up 2%. Statutory Group sales (ex. VAT) up 5.3%; Q4 retail sales up 7.1% (7.8% like-for-like)
- Grocery sales up 3%, driven by inflation and improved market share performance; Q4 grocery sales up 7.4%
- Underlying profit before tax of £690 million, down 5% and at the top end of £630 million to £690 million guidance range
- Year-on-year decline reflects annualisation of COVID-19 driven grocery volume, investment in the customer proposition and operating cost inflation, partially offset by operating cost savings and lower finance charges.
Determined to battle inflation
Simon Roberts, chief executive of J Sainsbury plc, said: “We really get how tough life is for so many households right now which is why we are absolutely determined to battle inflation for our customers. Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years. As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s and Argos.
“We continue to work closely with our suppliers and farmers, and I am grateful for their support in what has been another difficult year for food supply chains. We know just how vital the agriculture industry is not only to Sainsbury’s, but to the country as a whole and this is why we have made the choice to give £66 million of additional support to British farmers over the last year.
“We made these very deliberate decisions and investments because they make our business stronger, but more importantly because they are simply the right thing to do. While there is still much to be done and there is no doubt that the year ahead will remain challenging, I’m confident we will continue to deliver for our customers, colleagues, communities and shareholders.”
