2
July 2024
J Sainsbury
plc
First Quarter Trading
Statement for the 16 weeks to 22 June 2024
Biggest market share gains of
any grocer as more customers choose Sainsbury's for their main
shop
Trading Highlights
- Strong sustained Grocery momentum
with a second year of volume growth as customers continue to
respond to our value, innovation and leading quality. Volume growth
has remained strong as inflation has slowed, despite tough weather
comparatives in recent weeks
- Biggest market share gains of any
grocer during the quarter1 with consistent net switching
gains2 as more customers choose Sainsbury's for their
main shop3
- Sainsbury's General Merchandise and
Clothing performance reflects improvement in clothing trend offset
by weaker seasonal general merchandise sales
- Argos sales declined against a
particularly strong comparative period with significantly lower
seasonal sales and weaker Consumer Electronics demand, notably in
Gaming
- Commenced previously announced £200
million share buyback programme, to be completed in
FY24/25
- Additionally expect to return at
least £250 million to shareholders once the sale of Sainsbury's
Bank's Core Banking Business to NatWest has completed and the
future model for Argos Financial Services is in
place
- Continue to expect FY24/25 Retail
underlying operating profit of between £1,010 million and £1,060
million, growth of between five per cent and ten per cent versus
FY23/24, and to generate at least £500 million of Retail free cash
flow
|
Sales Performance (YoY)*
|
Q1
16 weeks to 22 June
2024
|
|
Sainsbury's
|
4.2%
|
|
Grocery
|
4.8%
|
|
General Merchandise +
Clothing
|
(4.3)%
|
|
Argos**
|
(6.2)%
|
|
Total Retail (exc. fuel)
|
2.6%
|
|
Like-for-like sales (exc.
fuel)
|
3.0%
|
|
* Revised category disclosure
reflects Next Level Sainsbury's strategy changes. Historic
disclosure available at the end of the release
**Excludes the impact of closing the
Argos business in the Republic of Ireland. Sales performance
including impact; Argos (7.7)%, Total Retail (exc. fuel) 2.3%,
Like-for-like sales (exc. fuel) 2.7%
|
Simon Roberts, Chief Executive of J Sainsbury plc,
said:
"We are pleased with our
market-beating grocery
performance and the early progress we're making against our Next
Level Sainsbury's plan. We've been winning from competitors every
month for 15 months, as more and more people are choosing
Sainsbury's for their big weekly shop.
"We are
laser focused on delivering the best combination
of value and quality in the market and our customers are
recognising that with 98% of big baskets including Nectar Prices or
Aldi Price Match. Innovation
continues to be a top priority and we launched 400 new products
this quarter, almost half of which were Taste the Difference, which
continues to outperform a strong premium
market. Our Summer
ranges are the perfect complement to this
Summer of Sport and we're gearing up for Wimbledon this week and
England's quarter final match on Saturday night.
"Our food business is going from
strength to strength and I would like to thank all of
my colleagues and our suppliers and
farmers for the brilliant job they are doing every day to deliver
for all our customers."
Strategic Highlights
First choice for
food: Our
consistent focus on great value, quality and service is delivering.
We are winning more volume from Primary customers than all other
full-choice grocers4. This is driving basket size growth
significantly ahead of all competitors5 and a second
year of volume growth
- Improvement in value perception
ahead of the market6, with 98 per cent of big baskets
including Nectar Prices or Aldi Price Match products. We now have
more than 650 products in our Aldi Price Match, as well as offering
Low Everyday Prices on around 1,000 products
- Increased our Summer innovation by
10 per cent year on year with more than 400 new products, almost
half of which are Taste the Difference. Taste the Difference
remains our fastest growing own brand, with sales growth of 14 per
cent and we continue to perform ahead of all competitors in Premium
Own Label volume growth7
- Groceries Online participation
increased to 14 per cent, as customers return to more time
efficient ways to shop. Our OnDemand service continues to grow
rapidly, with sales up more than 80 per cent
- Overall supermarket customer
satisfaction has increased 4 percentage points and remains
consistently ahead of full-choice competitors8 as higher
levels of colleague engagement support the delivery of leading
customer service. Scores for product availability have improved
across all channels, particularly in supermarkets with an 8
percentage point improvement year-on-year9
- Remain focused on addressing food
poverty in the UK and taking further action to reduce food waste.
Partnering with Olio across our estate to redistribute 'use by'
surplus food following a successful trial
- Positive improvement in Clothing
sales momentum, particularly in Womenswear, benefiting from renewed
focus on core ranges but offset by the impact of unseasonal weather
in recent weeks
Loyalty everyone
loves: The role of Nectar within our
business continues to develop as we annualise the launch and rapid
roll out of Nectar Prices. Customers are reacting positively to the
value they can access and the ability to accumulate rewards
quickly10
- Reached our highest Nectar
participation to date over the Easter Bank Holiday, with almost 18
million customers now digital Nectar collectors and customer
metrics in ease, relevance and value improving during the
quarter10
- Your Nectar Prices, our
personalised offer, has been live on Groceries Online for six
months. Almost 90 per cent of eligible baskets include a
personalised offer, delivering significant savings to online
customers
- Major brands are increasingly
partnering with us to run innovative promotional events, driving
strong sales growth and customer engagement, while continuing to
connect with us for Nectar360's deep media capabilities, valuable
insights and strong returns on advertising spend
More Argos, more
often: We are making progress with
our More Argos, more often strategy outlined in February, both in
transforming the business and reshaping our core commercial and
digital proposition. Despite a tough trading backdrop, we are
enhancing our digital offer and improving our range, particularly
expanding to more popular premium brands
- Argos sales declined against a
tough comparative, reflecting an unseasonal start to Summer,
impacting seasonal categories like House and Garden and Outdoor
Furniture. Weaker Consumer Electronics sales were driven by softer
demand, particularly in Gaming
- Consumers continue to shop general
merchandise more cautiously but respond to value. Our new Big Red
promotional events join up our best value offers across multiple
categories and have performed well with strong customer
engagement
- Extending ranges in key
categories:
o Extended Lego range by over 20 per cent in the past year, with
a greater focus on offering complete collections at mid-premium
price points, driving sales growth of 40 per cent
o Introduced new suppliers through stockless Supplier-Direct
Fulfilment (SDF) arrangements across categories including
power tools, bedding and sofas, offering more complete
missions and ranges. This has driven SDF sales growth of 7 per cent
and a shift towards higher ticket items
Save and invest to
win: Mobilising our plan to unlock a
further £1 billion of operating cost savings over the next three
years, creating the fuel to continue investing in our customer
proposition, productivity and operations whilst driving higher
returns
- The migration of our Food
forecasting capabilities will complete this Summer, supporting the
optimisation of sales, waste and stock. This is already delivering
significant benefits, with availability improvements ahead of
target
- Accelerating our ambition to become
the UK's leading AI-enabled grocer by committing to a five-year
strategic partnership with Microsoft. Key focus areas are enhancing
customer experiences online using generative AI, empowering store
colleagues by using real-time data and insights for key processes
and using machine learning capabilities to improve
efficiency
|
Like-for-like sales
performance
|
2023/24
|
2024/25
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
|
Like-for-like sales (exc. fuel)
|
9.8%
|
6.6%
|
7.4%
|
4.8%
|
2.7%
|
|
Like-for-like sales (inc. fuel)
|
3.9%
|
2.2%
|
5.3%
|
2.9%
|
2.4%
|
|
|
|
|
|
|
|
|
Total sales performance
|
2023/24
|
2024/25
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
|
Sainsbury's
|
9.9%
|
7.5%
|
8.4%
|
6.5%
|
4.2%
|
|
Grocery
|
11.0%
|
8.9%
|
9.3%
|
7.3%
|
4.8%
|
|
GM (Sainsbury's) + Clothing
|
(2.5)%
|
(8.7)%
|
(0.3)%
|
(5.5)%
|
(4.3)%
|
|
Argos (inc.
ROI)
|
5.1%
|
(2.6)%
|
(0.9)%
|
(6.6)%
|
(7.7)%
|
|
Total Retail (exc. fuel)
|
9.2%
|
5.8%
|
6.5%
|
4.3%
|
2.3%
|
|
Fuel
|
(21.4)%
|
(17.1)%
|
(7.2)%
|
(7.8)%
|
0.4%
|
|
Total Retail (inc. fuel)
|
3.3%
|
1.5%
|
4.4%
|
2.4%
|
2.1%
|
|
|
|
|
|
|
|
|
Like-for-like sales
performance exc. Argos ROI
|
2023/24
|
2024/25
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
|
Like-for-like sales (exc. fuel)
|
10.0%
|
6.6%
|
7.4%
|
4.8%
|
3.0%
|
|
Like-for-like sales (inc. fuel)
|
4.0%
|
2.2%
|
5.3%
|
2.9%
|
2.6%
|
|
|
|
|
|
|
|
|
Total sales
performance
exc. Argos ROI
|
2023/24
|
2024/25
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
|
Sainsbury's
|
9.9%
|
7.5%
|
8.4%
|
6.5%
|
4.2%
|
|
Grocery
|
11.0%
|
8.9%
|
9.3%
|
7.3%
|
4.8%
|
|
GM (Sainsbury's) +
Clothing
|
(2.5)%
|
(8.7)%
|
(0.3)%
|
(5.5)%
|
(4.3)%
|
|
Argos
|
6.1%
|
(0.1)%
|
1.7%
|
(4.7)%
|
(6.2)%
|
|
Total Retail (exc.
fuel)
|
9.3%
|
6.2%
|
7.1%
|
4.7%
|
2.6%
|
|
Fuel
|
(21.4)%
|
(17.1)%
|
(7.2)%
|
(7.8)%
|
0.4%
|
|
Total Retail (inc.
fuel)
|
3.3%
|
1.5%
|
4.4%
|
2.4%
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
Total sales performance -
previously reported detail
|
2023/24
|
2024/25
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
|
Total
General Merchandise:
|
4.0%
|
(2.6)%
|
(0.6)%
|
(5.6)%
|
(7.3)%
|
|
GM
(Sainsbury's)
|
(1.2)%
|
(2.7)%
|
0.9%
|
0.4%
|
(5.3)%
|
|
GM (Argos) (inc.
ROI)
|
5.1%
|
(2.6)%
|
(0.9)%
|
(6.6)%
|
(7.7)%
|
|
Clothing
|
(3.7)%
|
(14.6)%
|
(1.7)%
|
(11.7)%
|
(3.3)%
|
Notes
Certain statements made in this
announcement are forward-looking statements. Such statements are
based on current
expectations and are subject to a
number of risks and uncertainties that could cause actual events or
results to differ
materially from any expected future
events or results referred to in these forward-looking statements.
Unless otherwise
required by applicable law,
regulation or accounting standard, we do not undertake any
obligation to update or revise
any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
A webcast presentation and live
Q&A will be held at 9:15 (BST). This will be available to view
on our website at the following link:
https://sainsbury-q1-trading-statement-2024-25-analyst-call-july-02.open-exchange.net/
A recorded copy of the Q&A call
and a transcript will be available at
www.about.sainsburys.co.uk/investors/results-reports-and-presentations
following the event.
Sainsbury's will announce its Interim
Results for the 28 weeks ending 14 September 2024 on 7 November
2024.
Enquiries
|
Investor Relations
|
Media
|
|
James Collins
|
Rebecca Reilly
|
|
+44 (0) 7801 813 074
|
+44 (0) 20 7695
7295
|
1 Worldpanel by Kantar - Grocery
Value YoY market share gains - FMCG excl. Kiosk and Tobacco. 14
weeks to 9 June 2024
2 Worldpanel by Kantar Packs Net Switching - FMCG excl. Kiosk
and Tobacco. Net switching gains for last 15 periods of 4 week
reads to 9 June 2024
3 Worldpanel by Kantar Shopper Mission "Main Shop" YoY volume
share gains - FMCG excl. Kiosk and Tobacco. 14 weeks to 9 June
2024
4 Worldpanel by Kantar Primary Shopper Growth YoY - FMCG excl.
Kiosk and Tobacco. 14 weeks to 9 June 2024
5 Worldpanel by Kantar Packs per Trip growth YoY - FMCG excl.
Kiosk and Tobacco. 14 weeks to 9 June 2024
6 YouGov Brand Index - Supermarket Value for Money perception
metric
7 Worldpanel by Kantar Premium Own Label Packs growth - FMCG
excl. Kiosk and Tobacco. 14 weeks to 9 June 2024
8 CSAT Supermarket Competitor Benchmark data - Overall
Supermarket satisfaction score
9 CSAT Supermarket Competitor Benchmark data - Availability of
Products Supermarket satisfaction score
10 Nectar Brand Tracker,
May 2024