Sainsbury's tells shoppers’ story

 
Sainsbury's shopping trolleys

The detail of Sainsbury's better-than-average trading performance for the 14 weeks to 5 January confirm the big trends in retailing and consumer spending.

Shoppers are trying to spend less and increase saving (where they can, in an era where disposable incomes remain under relentless pressure).

So the weekly big food shop in a large supermarket is still shrinking, in a prolonged way that is almost without precedent.

This is about consumers minimizing waste. Or at least that is what Justin King, chief executive of Sainsbury's, tells me. And it is the basis on which Sainsbury's has been shaping its business.

So how is it that Sainsbury's succeeded in increasing its like-for-like or underlying growth for the 32nd consecutive three-month period (which I am pretty sure is eight years without a hiatus)?

Well apparently we are thriftily using up what we buy in our main shopping expedition some time during the week, and then popping out to smaller shops to top up.

And we are also looking for better value by going online.

Here are the Sainsbury's numbers that tell that story.

Like-for-like or underlying sales rose 0.9% in the period, or 0.4% excluding the benefit of enlarging some stores. That represents less than half the growth rate in the first six months of the year - so the climate remains tough.

However, within sales that grew 3.9% in total (including fuel, new stores and so on), sales from smaller or convenience stores grew an impressive 17% and online revenue was 15% higher.

Also, in a flat basic food market, clothing sales increased 10%, and small electricals were up 24%.

Which says two things.

First that Morrisons, which recently reported a fall in like-for-like sales, was spot on in pointing to its de minimis presence in convenience and online shopping as significant sources of weakness.

Second - as if you needed telling - retailing will for some time remain all about trying to win a bigger slice of a cake that cannot grow in any meaningful way.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +17

    Comment number 42.

    Dear supermarkets, please stop your BOGOF promotions and instead sell the stuff a little cheaper. Often perishable items on one of these promotions get thrown away as the second item is out of date by the time the first is consumed. Do you donate older but still edible stock to the foodbanks? There's a lot of genuinely hungry people out there could use it.

  • rate this
    +1

    Comment number 41.

    @20 Rebecca
    400 char limit demands extra post but you have good point @20. Is that why some people are desperate to increase population of UK?

    Competition in supermarket retail: Interesting to note that in my local Iceland they are pushing customers to take their (quite good quality large) plastic bags: 'We want our name to be seen out there!'

  • rate this
    0

    Comment number 40.

    Someone tell sainsburys there is a resecion on.

    Just shows how beyond reality these fools are to expect profits not to be effected.

  • rate this
    +4

    Comment number 39.

    "...weekly big food shop in a large supermarket is still shrinking, in a prolonged way that is almost without precedent."
    I believe that people want small, local shopping; at least I do. I am tired of being a cog in some profit-making, processing machine; I want "small". I want to feel like a human being having a personalized shopping experience.

  • rate this
    +6

    Comment number 38.

    Why the concentration on turnover (t/o)?

    In an environment of rising prices due to inflation, nominal t/o is bound to rise. We should focus on real increases in t/oI.e. inflation adjusted (and NOT using the govts bogus numbers!)

    The key metric is profit. If profits have risen by more than real t/o then we, the consumer, are being ripped off.

    Come on BBC - let's have the full facts...

  • rate this
    -1

    Comment number 37.

    30

    Sorry to have to burst a perfectly good conspiracy theory, but this is no scam.

    Pricing software is very complex, millions are spent developing it. It gets many feeds with competing pricing and offer info, and occasionally misses or incorrectly interprets data.

    There is also human error of the store staff.

    Solution: buy the 2x9 loo rolls, and feel good for spotting a hidden bargain.

  • rate this
    +1

    Comment number 36.

    Something like 66% of this country's GDP is generated by shopping.
    People are being hammered by government so there is little surprise they are spending less. Aldi recently announced a 24% increase in sales so fewer people are bothered about rubbing shoulders with the riff -raff and more concerned with saving a few bob.
    Sainsbury's/Tesco/Asda et al better smarten up your act a bit PDQ!

  • rate this
    +6

    Comment number 35.

    28.Up2snuff


    Our local Lidl is right next door to our Waitrose - the mvement of many, many people between the two, for different aspects of their shopping, is both prolific and quite open for all to see....


    ....if you want to let your wallet take the hit in order to protect your snobbish attitudes then that's your freedom....


    ...plenty of the rest of us have more sense however....

  • rate this
    +5

    Comment number 34.

    @28uptosnuff
    Stop knocking Lidl. Some of their stuff is a bit naff but things like their German meats, chocolate, etc are the best around. Their cheap perfume beat the likes of Dior and Chanel in a blind smelling contest. At the other end, their loo rolls are the best on the market.

  • rate this
    +1

    Comment number 33.

    @24 Rebecca
    We are talking supermarkets here ;-) and I did post 'hint' not 'scent'!

    M&S interestingly do have (smell) scent in food (& are said to be doing well with it) and Sainsbury's used to bake on premises & deliberately vent to streets outside.

  • rate this
    +7

    Comment number 32.

    29.
    RMG3

    Oops, missed a word. What I meant to say is they should be more competitive. Aldi and Lidl serve a certain faction of the community. If you don't like the products, don't shop there. I like some of their stuff, I don't like others. For the basics you can't beat their price and they stock certain things you can't find anywhere else.

  • rate this
    +5

    Comment number 31.

    I have boycotted a certain major grocery line because I find its prices high & there are too many pshychological traps to trip unwary shopper trying to save pennies. Instead I have taken my shoping along a major street - shop to shop - & I am saving money hand over fist. I might have to go to 5 or 6 stores, but I get the fresh-air, exercise & savings. Small, intimate shopping is best for me.

  • rate this
    +12

    Comment number 30.

    Here's a Sainsburys scam I recently encountered :

    2 x 9 pack own brand loo rools. cost £3.50 per pack.
    1 x 18 pack own brand loo rolls, cost £7.70 per pack.

    The 18 roll packs were marked as "bigger pack, better value".

    Not that Tesco etc are any better on that front.

  • rate this
    -2

    Comment number 29.

    Sainsbury's is not seen as an every day shop for every day shoppers. Their market is middle income earners. If they want to attract more people they should be more

  • rate this
    -7

    Comment number 28.

    @6 startsmall

    :-) Wonderful post.

    You might also have added: Aldi/Lidl custr: 'Please give me the stuff fast, it's so horrid I can't wait to get out out of here but need to save money' &/or 'Am terrified the friends & neighbours will see me here!'

  • rate this
    +1

    Comment number 27.

    The supermarkets will continue to grow as they continue to move into other non food areas. Some growth I guess will come from people buying more, but most growth at the expense of other retailers.

    It's difficult to see any distinction between say a Tesco extra and an Asda now. I would suggest that higher value shoppers are being pushed up market by the mass downwards homogenisation, .

  • rate this
    -3

    Comment number 26.

    4 & 3
    Re local community shops/ village post offices.

    Once upon a time... a van selling groceries served rural communities, then along came supermarkets & freezers.

    Today people living out in the sticks, can shop online with all major supermarkets( apart from Morrisons )
    Sainsbury's excel re delivering groceries by appointment to us country folk.

  • rate this
    +3

    Comment number 25.

    Every time another acre of countryside is disfigured by one of these enormous boxes full of processed garbage, I'm reminded to shop local. If these places are in stagnation, then let's hope decline follows.

  • rate this
    -2

    Comment number 24.

    21 Up2snuff The wonderful smell is out of date. Folk won't go in to shop if there is a smell to the place. They think that something has gone off

    22 SwampBucket. More immigrants to the UK? Good idea. It makes the country a more interest place to live in. Outnumber the working class white men. They are a special ethnic class all to themselves

  • rate this
    +1

    Comment number 23.

    re #1 I see people on here hate the idea that we are paying more for less nutrition!

    Grocers sell food. Disregarding pack size reduction; it is vital to understand the nutritional deficit we are suffering. Food just isn't as nutritious as it was last year so the small growth in consumption masks an underlying nutritional deficit or food price inflation (which the ONS will have IGNORED!)

 

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