Mike Coup, Group Chief Executive, said strong performance had been “driven by a differentiated strategy; offering consumers quality, value and choice".
In the 16 weeks to 1 July, Sainsbury’s saw grocery sales jump 3.0%, compared to 0.3% in the third and fourth quarters of 2016/17. Both online sales and small convenience store concepts are also providing growth for the business. Despite concerns of a consumer ‘spending squeeze’, Mr Coupe noted “no change” in customer behaviour, adding that when there is pressure on household budgets “supermarkets tend to do better as people stop eating out as much and start eating in more”.
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Strong food sales occurred where Sainsbury’s has invested in product innovation, such as the new Summer eating ranges. Their produce category which has a strong focus on quality, outperformed the market with a volume growth of more than 1%.
Mr Coupe attributed strong growth to “working closely with suppliers” helping to keep a lid on shelf prices. Whilst there is no intrinsic link between farm gate prices and shelf edge price, the NFU encourages retailers to work with their supply chain, including farmers, to gain supply chain efficiency, ultimately delivering value to the customer.
During this period, customers enjoyed offers on Jersey Royal potatoes and British strawberries, whilst basic items, such as milk and chicken breast fillets, were also still cheaper than three years ago.
The acquisition of Argos is thought to have put the retailer ‘back on track’, particularly during the recent heatwave where a large number of paddling pools and fans were sold. The merger also looks set to drive Sainsbury’s online expansion, fulfilling consumer demands for convenience.
The proposed deal in which Sainsbury’s is thought to have submitted a £130m bid for Nisa, was not mentioned in the results announcement.
The NFU works closely with Sainsbury’s on behalf of UK farmers to promote British agriculture, and encourage farm-to-fork supply chain collaboration. Click here to view our engagement with Sainsbury’s and the rest of the supply chain.