Sainsbury’s speeds up innovation as part of value drive

Sainsbury’s is increasing the speed of innovation and plans to introduce additional price cuts as part of its commitment to increase value for customers.

The supermarket is on track to meet its target of tripling the rate of product innovation compared to last year, having launched 277 new lines
in the first quarter, with plans to add a total of 1,900 new products over the year.

Speaking on a press call this morning (6 July) announcing its Q1 results, chief executive Simon Roberts said this was being driven by the supermarket’s ambition to put “food at the heart” of the brand.

“There is a real sense of excitement as we bring customers new products to try. The recent launch of ‘Helping Everyone Eat Better’, I think really demonstrates our commitment to offering customers great value, tasty food that is also good for them and good for the planet,” he said.

He described it as an “important step” for the business and in helping Sainsbury’s reduce its impact on the environment.

While we remain cautious, we are confident that we have the right plan and strategy in place [for online] to build on the momentum.

Simon Roberts, Sainsbury’s

He pointed to the brand’s “successful” Aldi Price Match programme for providing customers with “better value groceries”, which is having a halo effect across the rest of the basket.

Sainsbury’s plans to cut the price of 60 additional core products across fresh produce such as fruit, meat and dairy, which will equate to £50m of savings.
Sainsbury’s hails Aldi price match success as value push pays offWith the lifting of lockdown restrictions, Roberts said in-store visits have risen, which has resulted in a slight slow down in online orders. In the quarter, online orders “gradually” reduced from the peak levels seen at the height of the pandemic in 2020, but the channel still remains “popular”, with online accounting for 18% of grocery sales, up year on year from 8%.

First-time online customers have stayed “loyal” to Sainsbury’s, which has also helped it gain market share, Roberts said.

“Sales in grocery online are up 142% on a two-year basis. We continue to gain online market share from our competitors. And I’m really pleased that many people have shopped with us online for the first time during the pandemic and stayed our loyal customers,” said Roberts.

He added: “While we remain cautious, we are confident that we have the right plan and strategy in place to build on the momentum.”

In the 12 weeks to 13 June, Sainsbury’s increased market share by 0.4% to 15.2%, according to the latest data from Kantar.

The supermarket says a combination of improved value, more innovation and better customer service have all contributed to it increasing market share over the period.

Sainsbury’s posted a 1.6% rise in like-for-like sales, excluding fuel, for the 16 weeks to 26 June.

Grocery sales increased by 0.8% over the period, compared to Q1 2020, and 11.3% compared to two years ago.

Overall general merchandise sales, including Argos, dropped by 1.4% year on year, but increased by 5.6% on a two-year basis.

Argos’s sales dropped by 3.7% during the first quarter compared to the previous year, but increased by 6.7% on a two-year basis, while Sainsbury’s general merchandise sales increased by 11.2% year on year, and by 0.9% compared to 2019. Clothing sales increased by 57.6% year on year and 15.5% compared to Q1 in 2019.

Roberts did not confirm whether the supermarket will continue to advertise mask-wearing signs after 19 July when restrictions in the UK are completely lifted. The supermarket is instead taking an “individual choice” stance on mask-wearing in-stores.