Supermarket Sainsbury’s has once again stressed that it will “put food back at the heart” of its business, in the latest strategy update.
The grocer aims to become the first choice for food for more people, and attract more bigger basket primary shoppers. It will harness its Nectar loyalty platform which offers personalised rewards, prices and retail media capabilities.
While Sainsbury’s stressed it was proud of its current food offering, it admitting to not offering a full range in certain locations, with only 15% of supermarkets offering the full food range and some of its highest potential stores not stocking the grocery range that customers expect. This also impacts its online range and perceptions of availability as online grocery orders are picked from stores.
It will focus on around 180 of these highest potential stores over the next three years and expects this to be a key driver of grocery volume gains.
Sainsbury’s will also target £1bn of cost savings over three years to FY27, as it builds on Argos’s strengths in convenience and value. The supermarket will also “invest in our capabilities across technology and infrastructure”.
Simon Roberts, chief executive of J Sainsbury plc, said: “Our Food First strategy has delivered on its promise over the last three years, making Sainsbury’s a stronger business with a much sharper position on value and a major refocus on our innovation. Customers have recognised the progress we’ve made, as our market share gains have shown.
“Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for – outstanding value, unbeatable quality food and great service. Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsburys, Argos and Nectar.
“We’re going to build on what’s driven our success since 2020. We’re determined to be First Choice for Food, ensuring more customers in more of our stores can enjoy more brilliant Sainsbury’s food. That means more space for our food offer, while still delivering the general merchandise products customers want from us. That way, not only will we find more ways to delight new and existing customers, we will also continue growing volume market share.
“While I’m proud of the progress we’ve made to date, we’re only just at the beginning of rediscovering quite what this business is capable of. By taking Sainsbury’s to the next level, delivering for customers and colleagues, we will also deliver enhanced returns for shareholders through a share buyback and committing to a progressive dividend.”
Loyalty and retail media offering
The Next Level Sainsbury’s strategy also championed the supermarket’s Nectar loyalty scheme and its Nectar360 media network. It reported that Nectar has delivered ahead of plan and is playing an ever-larger role for customers and within the business.
Sainsbury’s credited the launch of Nectar Prices for transforming Nectar sales participation, customer recognition of the value that Nectar provides, and wider value perception.
Furthermore, Nectar360 – which manages Sainsbury’s and Argos retail media services – now serves over 870 clients directly, and has built partnerships with the key agency groups.
Sainsbury’s forecasts an incremental £100mn of Nectar360 profit contribution over the next three years (previous guidance was £90mn over the four years to March 2026).
Retail media networks, such as Sainsbury’s Nectar360, are the focus of a brand new event coming to London on 11 June 2024.
MediaX explores the experiences of well-established retailers in this space to new entrants and the agencies who are helping make things tick.
The full agenda for the latest RetailX event MediaX is coming soon, but the key themes can be seen here.
