Retailer Sainsbury’s has invested over £60 million in lowering prices for its customers since March 2023, according to its Q1 trading statement.
Highlights of the statement are as follows:
- Like-for-like sales were up 9.8%, while total retail sales were up 9.2%
- Grocery sales were up by 11%
- Outlook has remained unchanged – Sainsbury’s continue to expect underlying profit before tax of between £640 million and £700 million and to generate at least £500 million of Retail free cash flow in the 2023-2024 finance year.
In regards to food, a stronger sales growth was driven primarily by a return to volume growth, helped by a strong performance over bank holidays and warmer weather towards the end of the quarter. Growth was led by its convenience stores and supermarkets, as customers continued to return to stores.
Providing value
Market share gains were driven by the further improvement of its value proposition, including the launch of Nectar Prices in April, and continued investment in availability and service. Over one million new customers signed up to digital Nectar, with Sainsbury’s reporting that customers have saved over £90 million through offers on more than 30,000 products.
Online groceries benefitted from improved availability, technology upgrades, operational efficiency and strengthening of value messaging. Nectar Prices is now a key part of how Sainsbury’s presents value to customers online.
Entry price points have been put into a single brand – Stamford Street – making the lowest priced range more visible and appealing to customers. Stamford Street offers around 200 everyday staples at low prices and over 40% of Stamford Street products are included in its Aldi Price Match Campaign. Entry price point remains its fastest growing product tier and its Own Brand sales grew 13% overall.
Taste the Difference
The supermarket launched over 300 new products during the quarter, including around 130 Taste the Difference products, and has almost tripled Summer innovation over the last two years. Sainsbury’s said its Summer Edition range remains popular, with best-sellers like the Taste the Difference Greek Inspired Whipped Feta Salad and the Taste the Difference Signature Burger.
Taste the Difference powered the company’s performance as the only retailer to see volume growth across Easter categories. The retailer noted high sales also across the Coronation period, where customers celebrated with traditional British favourites, such as its Taste the Difference Cornish Clotted Cream Scones with Taste the Difference Coronation jam.
Passing savings on to customers
Simon Roberts, chief executive of J Sainsbury plc, said: “We are putting all of our energy and focus into battling inflation so that customers get the very best prices when they shop with us, particularly now as household budgets are under more pressure than ever.
“Food inflation is starting to fall and we are fully committed to passing on savings to our customers. Since March, we have invested over £60 million in lowering prices, leading on price cuts across more than 120 essentials like bread, butter, milk, pasta, chicken and toilet roll.”
Roberts continued: “Prices on our top 100 selling products are now lower than they were in March, against a market where prices have gone up. Customers have also saved over £90 million since we launched Nectar Prices in April. In addition, we’re offering great value through Stamford Street, our entry price range and through our biggest ever Aldi Price Match campaign. All of this is underpinned by the continued delivery of our cost saving programmes.
“Customers can see that prices at Sainsbury’s have improved and this combination of great value and some good weather in recent weeks means we have grown our food volumes and market share. Customers are choosing us when they want to celebrate and we grew ahead of the market over Easter, the Coronation and the bank holidays.”
