What is it about Sainsbury's?

Another impressive performance.

As expected Sainsbury’s has notched up another impressive performance across its full financial year, with LFL sales up by 1.8 per cent and profit growth in line with City expectations.  

A key driver of this success has been the development of Sainsbury’s own-label architecture, which has afforded it the ability to flex its offer to fragmenting consumer demand which has seen the simultaneous growth of both the value and premium ends of the food market. Its Basics and Taste the Difference sub-brands address the polar ends of the market well, while the re-launch of its mid-tier By Sainsbury’s sub-brand has appealed to shoppers seeking price competitive alternatives to branded products. 

This balanced positioning has been complemented by targeted discounting, that encourages loyalty without widespread damage to margins. Sainsbury’s has notably achieved this through its Brand Match and leveraging its Nectar card programme for sales promotions. Moreover, while Tesco’s Price Promise offers a functional threat to footfall, "value-for-money" is at the heart of the Sainsbury’s DNA, as part of its Live Well for Less push. This is evident in creative campaigns such as "Feed Your Family For A Fiver", that have served to strengthen value credentials.

Taken together, the well segmented range and the targeted promotional activity is insulating Sainsbury’s in a climate where consumer loyalty is fickle and hard discounters are excelling.

Supporting these brand developments has been a store strategy which is suited to emerging market dynamics.  Sainsbury’s has traditionally had less of a focus on hypermarket formats compared to Asda and Tesco and has thus not been as impacted by the more negative performance of these store types. Instead its convenience-led strategy has paid dividends, with sales growing 17 per cent across this format, following the opening of a further 87 convenience stores during the year.

Wider afield, Sainsbury’s is also reaping the rewards for investments in its supply chain and procurement systems. Its close relationships with farmers, which has included an investment of £40 m in Farmer Development Groups since 2006, has ensured it has traceability and integrity. This helped Sainsbury’s avoid being engulfed in the horsemeat scandal, as many of its competitions were. 

Sainsbury’s also has a compelling growth story to tell in other areas of its business. Annual online grocery sales are now approaching £1billion, growing nearly 20 per cent over the year. Elsewhere, its non-food offer is relatively immature compared to its supermarket competitors; its general merchandise and clothing sales continue to grow at more than twice the rate of food, offering future scope for growth. In addition, with the announcement that the it is acquiring Lloyds Banking Group’s 50 per cent shareholding in Sainsbury’s Bank, Sainsbury’s has further opportunities to further leverage its brand loyalty at a time when consumers still lack confidence in core financial institutions.

On the horizon, Sainsbury’s does face both immediate and longer term challenges. Strong comparatives will undoubtedly provide a challenge, particularly considering the wider economic backdrop. Tesco’s resurgence is also a threat, as its own investment programme in own brand, store strategy and price competitiveness gathers pace. More pertinently, rumours of chief executive Justin King’s departure,  have caused some uncertainty among investors. That said for now at least, its proactive approach to evolving shopping trends leaves it ideally placed to make further market share gains.

Photograph: Getty Images

 Managing Director of Conlumino

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Should Jeremy Corbyn go? Two Labour Party members take different views

The Labour leader says he will not betray its members. But what do they think?

The Labour MPs stand on one side. The Momentum activists stand on the other. Both claim to represent the real voice of Labour voters, and therefore the true democratic will. 

 

But Labour voters are divided too. We heard from two Labour Party members with very different views about Corbyn:

 

Stay

Sophie Dodds

On 8 May 2015 I felt pretty wretched. Since 2010 my world had seemed to have become increasingly constricted. Rent had gone up at least 5 per cent every year; wages had not kept pace. East Coast Rail had been handed to a private company which increased ticket prices. For the first time ever, I was being told my diabetes medication would have to be switched to cheaper, less adequate brands, and it was getting harder and harder to get appointments with my nurse. And these were just the ways in which politics had touched me personally.

I went to the anti-austerity march that June and it gave me hope. I didn’t see Jeremy Corbyn speak at that but I was given some leaflets and heard Charlotte Church’s incredible speech, so decided to look into him. I watched a panel debate with all four candidates for the Labour leadership and my mind was settled.

 

Corbyn stood there and calmly and repeatedly stated that the poor should not have to pay for the results of an irresponsible financial sector, and that most economists agree that austerity does not work. He seemed to understand not only how Britain had arrived where it had, but what was going on in the world as a whole, and how we would have to fit into that. He understood that people and politics are complicated and that evangelical solutions will never get us anywhere. He was also the most charismatic of the bunch – not in the traditional, swept-back hair kind of way – but he had a rare air of intelligence, honesty and, to use that hackneyed phrase, integrity.

 

I was clearly not the only person to respond to him in this way. The trade unions got on board and tens of thousands of people paid their £3 and signed up for the right to vote for him. All manner of respected public personalities, from journalists and economists to comedians and musicians, spoke at his rallies. A core of young, digital-savvy and politically disillusioned talent formed and Momentum took shape.

 

There is a fundamental gulf between the Parliamentary Labour Party and the Labour Party membership, and a further gulf between those two groups and the rest of the British electorate. We live in fractured times, in which social media only serves to deepen those fractures. As the first Labour leader to be voted in by his own membership, rather than selected by the PLP, Corbyn was never going to have an easy run of it.

 

As for the EU referendum, not only was I 100 per cent sure of where Corbyn stood on this, but he put forward what I felt was the strongest argument for staying in the EU – the protection its laws offer to workers’ rights. Any reserve he showed in his enthusiasm for the EU was simply a reasonable reaction to its very real flaws. Don’t get me wrong, I would much rather be in the EU than out of it, but let’s not forget what happened to Greece. Let’s not forget TTIP.

The mutiny in the PLP has nothing to do with the EU. It’s been coming since he was first elected leader. The PLP are mainly Blairites. At some point or other this s**t was going to hit that fan. If they oust Corbyn, who do they think is going to lead them?

I suspect that the next time Labour win (if there still is a Labour Party by then) it will be under someone a bit more shiny, a bit more slimy, or possibly some charismatic Sturgeon who maintains her right to slash and burn as necessary.

But Godammit, whilst I still have the power to, I will keep voting for that socks and sandals man. And if they oust him for good? Well, at least I will save £5 a month on my Labour membership.

Go

Simon Foster

You've spent the last five days lamenting the loss of your Interrail pass, predicting a return to wartime rationing and contemplating overturning an incredible democratic mandate. Yet now a new post adorns your timeline. Your Facebook profile picture remains a snap of you “finding yourself” on your gap year in Thailand but it is now joined with a curious red banner proclaiming "I'm With Corbyn". You're with who?

Surely we can't be thinking about the same Corbyn? The Corbyn who remained practically invisible during the referendum campaign, surfacing only to reveal that he was "7 out of 10" in favour of Remain. The same Corbyn who refused to put party politics aside to campaign with Cameron even after private polling indicated this would help the Remain vote. Indeed, the very same Corbyn whose team under Seamus Milne actively worked to sabotage Labour In. Surely you cannot still be defending this champagne socialist?

I admit I am towards the more social democratic wing of the Labour Party - sorry, I mean I am "Blairite vermin" (the term adorned on a t-shirt worn by a delightful Socialist Workers' Party member during a recent pro-Corbyn march). I didn't vote for Jezza's vision of a “kinder politics” last September and have been calling for his ousting pretty much ever since.

I am honestly speechless at the continued unwavering support of my Facebook friends for a man whose utter incompetence has lead to a referendum result which most of them have despaired over.

Let's make no mistake here - the big loser of the referendum was the Labour Party. Much, if not most, of the blame for that rests on the shoulders of Jeremy Corbyn. A Britain Stronger In Europe memo leaked just three weeks before polling day revealed that up to 50 per cent of Labour voters weren't actually sure what the party's position on the EU was. How truly pathetic.

Is it really at all surprising then that come Thursday all the Northern Labour heartlands and 64 per cent of C2DE workers voted Leave? So surely we should all now be in agreement that Labour lost this referendum. Spectacularly. Yet I'm sure the Corbyinstas will blame it all on Tony Blair. Is there anything for which Corbyn is to blame which cannot instead be blamed on a Prime Minister who stepped down almost 10 years ago?

I guess this shouldn't even be a surprise to me. Some of those proclaiming their solidarity with Jeremy now are the same people who previously defended the anti-Semitic actions of Naz Shah and Ken Livingstone by claiming this was the imaginings of the "right-wing media".

As far as I can see it you can either be a Brexiteer, happy that the referendum campaign secured you the working-class votes necessary for your shock victory, or you backed Remain and are furious with Corbyn's lacklustre support. How can you possibly continue to support him when he ensured this defeat was inevitable?