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 Article written by Robert Peston Robert Peston Economics editor

Richer at last?

How significant is today's confirmation that earnings are at last rising faster than inflation?

Read full article

More on This Story

More from Robert

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +1

    Comment number 62.

    The rise and the rise of the supermarkets go hand in glove with the dimise of small family run retailers who really care about service and choice. No wet fish shops or butchers across most of Britain and very few green grocers. Then they moved into ironmongers territory and then cloths and then electrical their greed shows no end and they have decimated communities.
    We use local farmers markets

  • rate this
    +1

    Comment number 61.

    @30 - I'm glad I've had the opportunity to mention it here, as when I fed it back to the local branch manager of Sainsburys, he was completely disinterested.

  • rate this
    0

    Comment number 60.

    @53goatie
    Read my post again. I made no comment about the produce: they sell major brands as well as own or other brands sourced outside UK.

    I shop there and know stores in widely varying locations. I buy non-major brands, ie stuff I go specifically to get along with impulse purchases so I do know what I'm posting about. ;-)

  • rate this
    0

    Comment number 59.

    Why do people always go on about "small local shops?" Supermarkets didn't grow so huge by accident. They dominate the market because people prefer them. My local butcher stocks much nicer meat than the supermarket, but it's nearly twice as expensive.

  • rate this
    0

    Comment number 58.

    57 Albert

    If the product weight is reduced then clearly we are getting less for our money? Stuff comes by the kilo and that is why things like bacon have their water content increased. My grumpy grandad complains that his bacon is getting less every time

    Grandad now threatens to go shopping himself & to tell shopkeeper what's what!! Grandma is perplexed. Getting the bacon was always her job

  • rate this
    0

    Comment number 57.

    'So how is it that Sainsbury's succeeded in increasing its like-for-like or underlying growth for the 32nd consecutive three-month period'

    Because they reduce the weight of a product and keep the price the same or increase it slightly. They are all at it!

  • rate this
    +1

    Comment number 56.

    You must not slow down the shelf stackers. These are the opportunities offered to graduates by Tory misgovernment at the moment?

    That huge student loan & years of dilligent study then its off to Tesco at less than minimum wage.

    UK is such great place not to live in, and that is why all the bright young folk have left the country getting proper paid jobs overseas in properly run countries

  • rate this
    +1

    Comment number 55.

    23. JFH-" Nutritional deficit"?

    You mean food has less vitamins, minerals, protein etc. than last year?

    Oh, I get you. You mean the portions sold are smaller but the price is the same or higher...So the 'nominal' growth is greater than the 'real' growth...or should that be 'shrinkage' in terms of fewer biscuits per pack, smaller cup cakes and a shorter string of pork sausages.

  • rate this
    +9

    Comment number 54.

    When;
    the packaging is bigger than what's inside
    this weeks offer means it's going up big time next week
    the picture on the box is nothing like what's inside
    sizes go down and prices don't
    where the alcohol % has gone down for the same price
    buying bulk - singles cheaper
    and where the stores own home shopping staff and their bins get in the way
    and the trolley keeps turning left - priceless

  • rate this
    +1

    Comment number 53.

    28.
    Up2snuff

    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!'

    ....
    Nothing like some ignorance is there? Lidl might have some rubbish, but most of their stuff is as good as anyone, and their prices are cheap.

  • rate this
    +1

    Comment number 52.

    Anyone who shops regularly in one of the big supermarkets must have more money than sense.

    Local retail markets are at least half the cost with fresher produce.

    The power of the mighty shelf stackers has to be curbed.

    Their power over suppliers and consumers (and their profit levels) is unacceptable.

  • rate this
    0

    Comment number 51.

    41 UptoSnuff

    At least on-line shopping stops all that driving to the retail park. The Asda man packs all my shopping into the fridge for me and into cupboard in shed, while I am out at work. Marvellous!

    It is my mother who enjoys going food shopping not me. She seems to think it is some kind of treat? My Dad stands about whistling and drives car, then does man bit loading it into boot

  • rate this
    -1

    Comment number 50.

    Ive been getting £12 if you spend £60 vouchers from sainsburys so Ive been going there. Simples

  • rate this
    0

    Comment number 49.

    There isn't any competition between supermarkets as they have all got together and brought in a cross the board price fixing scam. They sold it to the public as money back if you pay more at another supermarket and now prices are harmonising. Try cat food as an example, same price to the penny in every supermarket.

  • rate this
    +2

    Comment number 48.

    What a curious way to interpret these stats, "minimizing waste."
    Are people who are now forced to choose between heating and food merely "minimizing waste?"

    Try taking a low wage, Justin King, and battle with mortgages,big utilities and endless taxes, then see if you are "minimizing waste" or "foraging for food."

    Big difference.

  • rate this
    +1

    Comment number 47.

    Albert 25

    Big white boxes? But local shops sell same stuff but more expensive, all brand labels, and hardly ever baked in store?

    Local shops first came about with 19th Century railways, about 1840, delivering to small towns & villages for first time. Earlier it was pack & bagmen by horse or carried by hand. In remote places the estate would grow & shoot everything itself. Time moves on?

  • rate this
    0

    Comment number 46.

    They sell inferior food to the public at inflated prices, they make life difficult for farmers supplying them (I've little if any sympathy for farmers) Supermarkets along with on-line retailing are turning the majority of UK high streets into wastelands, empty shops, betting shops, junk food outlets, charity & pawnshops. Until we cease "siege shopping" they'll maintain their stranglehold on the UK

  • rate this
    +7

    Comment number 45.

    Cheepo shops like Aldi and Lidl do well at times like this due to austerity meassures. Higher end shops like Waitrose, John Lewis and some smaller fancy shops do well at times like this because many people, who have money due to low mortgage rates, want quality and a better shopping experience. It's the stores in the middle like Morrissons etc, who will suffer.

  • rate this
    +5

    Comment number 44.

    @39 You mean you haven't got a small, local 'Sainsbury's Local' occupying a spare piece of land (planning permission obtained through a disgracefully dodgy system) and hammering your small, local independent shops yet?

  • rate this
    +2

    Comment number 43.

    @37 - stop apologising for supermarkets and their dodgy practices.

    These scams rely on gullible customers (which thankfully I'm not).

 

Page 4 of 7

 

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.