Sainsbury’s reports growth in sales and market share in 2011

UK retailer J Sainsbury plc (LSE:SBRY) reported today a 6.8% increase in total sales for 2011 to GBP24.5bn and said that it outperformed the market and increased its market share.

Profit before tax fell 3.4% to GBP799m, but the company said that its underlying profit before tax showed an increase of 7.1% to GBP712m.

Over the course of the year Sainsbury’s saw its market share rise to 16.6%, which it said was the highest for nearly a decade.

Chief executive Justin King claimed that the company’s price perception on branded groceries is improving, driven by the introduction of Brand Match which reassures customers that they are paying either the same or less at Sainsbury’s for branded goods.

In addition to this, Sainsbury’s Taste the Difference and Basics brands are both performing well and the company reported that these products appear side-by-side in many shopping baskets, showing that customers are saving on some items while treating themselves on others.

The other side of the supermarket business, general merchandise and clothing, is continuing to grow faster than the food business and is gaining market share. The retailer is developing its store estate, expanding its ability to offer non-food ranges, and now has 161 stores selling its larger non-food offering, 22 more than last year.

Sainsbury’s is also opening more smaller stores and during 2011 the company met its target of opening new convenience stores at a rate of one to two a week, with 73 to new stores taking the total to 440.

Many consumers are continuing to do more of their shopping from home and online grocery orders now exceed 165,000 a week, with an annual turnover of around GBP800m which places Sainsbury’s second in the market.

Beyond the company’s core operations, the pharmacy business is being expanded and Sainsbury’s Bank had a good year, recording a 40% increase in pre-tax operating profit.

The board of directors has proposed a final dividend of GBP0.116 to make a full-year dividend of GBP0.161, up 6.6% from last year’s dividend of GBP0.151.

Sainsbury’s slash the price of alcoholic drinks

Supermarket giant Sainsbury’s have announced plans to slash the price of selected alcoholic drinks, angering ‘responsible drinking’ campaigners.

 

The supermarket came under fire yesterday after it revealed reductions on so-called ‘lighter’ wines, bottled beers and mixer cans of spirit.

 

Sainsbury’s said its aim was to persuade people to switch to lower alcohol products or choose small measures.

 

However campaigners discarded the move, stating it was a cynical marketing stunt. Arguing that the low prices encourage higher consumption.

 

Health minister Paul Burstow has supported the promotion, which is currently running until January 24.

 

The alcohol industry set up a joint initiative between major brands: Sainsbury’s, Diageo, Heineken and Drinkaware in order to promote responsible drinking.

 

Sainbury’s said it was trying to encourage drinkers to shift away from the typical choice of wine, which is normally 12-14 per cent alcohol.

 

A target has been set for 2020 to double the sales of lighter wines –with an alcohol content of 10.5 per cent or less. The price of those wines will be cut be 25 per cent in this deal.

 

Diaego’s alcopop-style cans of mixer drinks will also cut their prices by 25 per cent – drinks include Smirnoff and diet cola and Morgan’s spiced rum and cola.

 

Eric Appleby, chief executive of Alcohol Concern said the campaign “rather cynically uses the trappings of responsibility as a promotional hook in what is really just product marketing”.

 

“The campaign is essentially a seasonal one, using the traditional January respite after the festive season to promote lines that are marginally lower in alcohol content”.

 

The British Medical Association said cheap offers on low alcohol drinks were not enough. Prime Minster David Cameron has supported the call for minimum prices on units of alcohol. He is said to want to see the prices set at 40-50p per unit.

 

A spokesman for BMA said: “Alcohol misuse leads to serious ill-health, premature death and is linked to violence and anti-social behaviour. It also costs the NHS billions of pounds every year”.

 

Article by Charlotte Greenhalgh

Sainsbury’s Help Farmers Go Green At The Bath And West Agricultural Show

Sainsbury’s has outlined a major initiative at the Bath and West show to help farmers go green, prevent tonnes of carbon from being wasted while also saving thousands of pounds in fuel and energy bills.

Experts from Sainsbury’s agriculture team held an industry-leading seminar for delegates at the show, including the President HRH, The Countess of Wessex, to present findings from a farm carbon footprinting project – the largest of its kind to be undertaken by a UK retailer. Sainsbury’s is keen to use the results to support farmers, suppliers and growers and identify where changes can be made to reduce carbon emissions and outline where best practice can be shared.

Since 2007, farmers in the Sainsbury’s Dairy Development Group have used new techniques to reduce their emissions by almost six per cent, which equates to over 42,000 tonnes of carbon or 108 million car miles. Collectively this has saved farmers £1.2 million in energy bills since 2007.

Speakers at the seminar included Sainsbury’s Property Director Neil Sachdev, Head of Agriculture Annie Graham and Paul Crewe Head of Engineering, Energy, Environment and Sustainability. The audience also heard from one of Sainsbury’s dairy farmers, Robert Reader, about the steps he has taken to ‘green up’ his farm.

Neil Sachdev, Sainsbury’s Property Director, said: “We’ve invested a lot of time to help minimise the impact Sainsbury’s has on the environment. Some of what we’ve trialled has made a real difference to our energy consumption and we want to give the knowledge that we’ve built up to farmers to help them reduce their energy consumption and, in turn, save some money.”

Sainsbury’s has Development Groups for all of its farmers – from pork to dairy – allowing them to work closely on issues such as the environment and animal welfare. Farmers have said that saving energy and reducing their impact on the environment is a top concern, so this event presented a unique opportunity to share the results of the carbon footprint initiative and outline new ideas.

Local farmer Robert Reader said: “The seminar presented a good opportunity to share ideas and techniques on the new processes that I have introduced on my farm. The evidence gathered by Sainsbury’s and the different techniques to reduce carbon have not only improved the efficiency of my business, but it has also significantly reduced my carbon footprint and costs.”

Green techniques have been trialled and implemented by Sainsbury’s in its stores and depots. For example, new biomass boilers that burn wood pellets in instead of gas can generate up to 30% of a stores energy requirements and a biomass combined heat and power generator allows a store to generate not only all of its own heat but also much of its own electricity.

The seminar also discussed other measures including using different types of grass, solar panels, rainwater harvesters that provide water to flush the toilets, low flush toilets, waterless urinals and self-closing taps. ‘North lights’ which are windows that specifically face north and are designed to maximise daylight, automatic light dimmers to reduce energy use on brighter days and energy monitoring via web-based technology that shows how much energy is being consumed in each part of a building was also discussed.

Sainsbury’s is one of the key sponsors of the Royal Bath & West Agricultural Show. The Sainsbury’s stand has an area where local farmers could meet with buyers and visitors could see an interactive ‘Field to Fork’ display, which demonstrates where food comes from and the process it goes through from farming to appearing on supermarket shelves. Regional suppliers have been showcasing great local produce, such as sausages, tomatoes, chicory and celeriac and the Sainsbury’s ‘Try Team’ have been cooking up quick and easy recipes such as omelettes and salads.