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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  • Comment number 122.

    All this user's posts have been removed.Why?

  • rate this
    0

    Comment number 121.

    I think the thing with Sainsbury's is that they are just nice.

    I was trying to collect points with Tesco Clubcard, but Tesco just feels so... big and cold and hassle. Why should I feel like this?

    Sainsbury's and Tesco are both big.

    With Sainsbury's I see friendly, happy staff, get good service and a bit of bargain, and that's it. Points? *shrug*. Give me a smile any day.

  • rate this
    0

    Comment number 120.

    Either some good techy stuff, cameras radios phones etc, are getting cheaper and cheaper or we have been right royally ripped off for years.

    Tools too. Drills and machine tools.

    And then cars etc. All getting better and cheaper.

    Was it all middle mens' take that had kept prices high?

    If so, can we do without them? If so then why did we have them?

    If we don't make anything how do we pay for it

  • rate this
    +1

    Comment number 119.

    @115J_f_H
    While rent&business rates are a problem these days for any business Jessops faced more significant problems.

    Mass market imaging has swung to phone, pad&tablet. High end cameras have incr significantly in price requiring incr. funds for stock. There is competition from online, international and s/h via various means incl. auction. Jessops had mixed reputation for service&pricing.

  • rate this
    +3

    Comment number 118.

    I have the organic box scheme, they also deliver a lot of other food (fish, meat, milk, cheese etc.). The food is far superior to any supermarket, and I still spend much less because I buy what I need without buying things I didn't need or wanted which seems to be what always happens in a supermarket. Put your money where your mouth is, support the UK farmers, you will get better deal too.

  • rate this
    +1

    Comment number 117.

    It's perfectly feasible that the massive supermarkets will continue to swallow businesses. I can see the day you go to even more enormous branches of Tesco that have popular fashion outlets and ex-high street stores within them offering a small presence to add to their internet presence.

    Town centres are dead, it's been obvious since online shopping took off

  • rate this
    0

    Comment number 116.

    We can only eat so much food. In fact we should eat less.
    Grocery shops by definition should be like utilities, offering a reasonable divident but little or no growth prospects.
    Alan

  • rate this
    +1

    Comment number 115.

    Jessops are a symptom of the grossly overpriced property market. (That HM Treasury has a policy to keep at the present inflated prices so as to rescue the bankrupt banks.)

    (Commercial) Property is far too expensive to run a viable business from, as are business rates.

    More and more Jessops will happen unless the idiots at the BoE & Treasury get money priced properly again & property prices fall.

  • rate this
    0

    Comment number 114.

    #75 - I found that the WH Smith computers have been bad for this type of offer this Christmas. I bought some books on the buy one get one half price deal but as I walked out the door checking the receipt I noticed that the till had worked 50% of £6.99 out as £2.68 not £3.50! Took the poor girl an age to sort out manually - how many customers will have paid too much?

  • rate this
    +1

    Comment number 113.

    Re111. Government has problems due to Labours spending money not in the treasury., which is why cuts are being made. Many customers are shopping on line, much cheaper plus no fuel costs. We have always shopped sensibily, planning menus ,using leftovers in other recipes also grow some fruit/veg myself. I shop at somewhere like Lidl as no loud music. We have 3 Tesco N Devon C turned down Asda build

  • rate this
    +1

    Comment number 112.

    #85 - one of my friends in the food industry told me over Christmas that some of their products were designed with at least 9 month shelf life but as the client wants to appeal to a given demographic of customer they sell them with only 3 months on...thereby actually throwing them away at least 6 months before there is any chance of them going off! Much of what is thrown out is actually ok.

  • rate this
    -1

    Comment number 111.

    Oh no! Jessops gone down. Its online shopping done it. I bought Canon lens just two weeks ago. The same lens £20 cheaper from mysterious supplier via Amazon. The lens was fine but I feel I have tipped Jessops over edge

    There will be lots of young folk out of job. The store at Canary Wharf is staffed by youngsters

    Why cannot this foolery of a government get the economy going again?

  • rate this
    0

    Comment number 110.

    Sainsburys have done well out of me this last 6 months based on 5 key reasons: appear to be UK tax based, support of paralympics, reasonable value (& good price on items close to sell by date), nectar points & shop layout. I support local butchers & market. Local co-op gets 2nd place from me for small shops. Local M&S missed out on a lot of my Christmas spend due to car park always being full.

  • rate this
    0

    Comment number 109.

    Why is spending and borrowing seen as a good thing when the UK public and private consumers continue to borrow like there is no tomorrow. Wait till reality hits when pensions and wages will have to be cut by 20% to plug the growing deficit. the government will only have the balls to do this when the markets force them into it

  • rate this
    -1

    Comment number 108.

    Problem with the discounters is their size. I shop in LIdl and ALDI but have seen as they have got busier there are big gaps of out of stock lines and the range constantly changes. Price and service are a consideration but these discounters are a certain size and cannot expand to cope with increased trade in each location.

  • rate this
    -1

    Comment number 107.

    @44.
    Redman6

    @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?

    The latest ruse is for the likes of Tesco Metro and Sainsbury local to buy bankrupt pubs, then they don't have the time consuming applying for a license to deal with

  • rate this
    +2

    Comment number 106.

    1 million new jobs, but those jobs are mainly poorer paid, so many are forced by price to make purchase decisions, hence dropping down to Aldi & B&M stores etc
    If/when prosperity returns, it will enevitably result in major return to previous buying habits

    Recession always results in tempory changes, issue is, will recession be tempory or will we end up more like Japans economy of past 20 years

  • rate this
    -1

    Comment number 105.

    Its a mish mash of figures that to get fundamentals you first need a potatoe masher or a degree in puppeteering.

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

    Does that include "like for like" or new stores or not, of course sales from new stores will add to growth, which is why figures are generally seperated to give CLEARER picture

  • rate this
    0

    Comment number 104.

    95.Auden Grey
    Have to agree with you. In Tadworth we have excellent Butcher, Fishmonger, Baker and Grocer so I do my best not to visit supermarkets. If I do it's either M&S or Waitrose, are much better experience than any of the other stores. I dont mind paying a bit extra for better quality.

  • rate this
    0

    Comment number 103.

    #99. James Froggatt

    Shop at big shops, late, when they mark down the prices on perishable goods. Such as bread that will be consumed in days anyway. Some times you can get a loaf for 1p.

    Also a cooked chicken for 50p. Makes lovely Green Thai curries.

 

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