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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France is changing: an army stalks the streets and Boris Johnson wanders the Tuileries

Will Self on the militarisation of France, and Boris Johnson at the Foreign Office.

At the corner of the rue D’Hauteville and the rue de Paradis in the tenth arrondissement of Paris is a retro-video-games-themed bar, Le Fantôme, which is frequented by some not-so-jeunes gens – the kind of thirtysomethings nostalgic for an era when you had to go to an actual place if you wanted to enter virtual space. They sit placidly behind the plate-glass windows zapping Pac-Men and Space Invaders, while outside another – and rather more lethal – sort of phantom stalks the sunlit streets.

I often go to Paris for work, and so have been able to register the incremental militarisation of its streets since President Hollande first declared a state of emergency after last November’s terrorist attacks. In general the French seem more comfortable about this prêt-à-porter khaki than we’d probably be; the army-nation concept is, after all, encrypted deep in their collective psyche. The army was constituted as a revolutionary instrument. France was the first modern nation to introduce universal male conscription – and it continued in one form or another right up until the mid-1990s.

Even so, it was surprising to witness the sang-froid with which Parisians regarded the camouflaged phantoms wandering among them: a patrol numbering eight ­infantrymen and women moved up the roadway, scoping out doorways, nosing into passages – but when one peered into Le Fantôme, his assault rifle levelled, none of the boozing gamers paid the least attention. I witnessed this scene the Saturday after Mohamed Lahouaiej-Bouhlel ran amok on the Promenade des Anglais in Nice – it was a little preview of the new state of emergency.

On Monday 18 July the French premier, Manuel Valls, was booed at a memorial service for the victims of the Nice attacks – while Marine Le Pen has been making all the populist running, whipping up anxieties about the enemy within. For many French, the events of the past week – including the failed Turkish coup – are steps along the way limned by Michel Houellebecq in his bestselling novel Submission; a via dolorosa that ends with La Marianne wearing the hijab and France itself annexed by a new caliphate.

Into this febrile drama comes a new player: Boris Johnson, the British Foreign Secretary. What can we expect from this freshly minted statesman when it comes to our relations with our closest neighbour? There is no doubt that Johnson is a Francophile – I’ve run into him and his family at the Tuileries, and he made much of his own francophone status during the referendum campaign. In Paris last winter to launch the French edition of his Churchill biography, Johnson wowed a publication dinner by speaking French for the entire evening. He was sufficiently fluent to bumble, waffle and generally avoid saying anything serious at all.

Last Sunday I attended the Lambeth Country Show, an oxymoronic event for which the diverse inhabitants of my home borough gather in Brockwell Park, south London, for jerked and halal chicken, funfair rides, Quidditch-watching, and “country-style” activities, such as looking at farm animals and buying their products. Wandering among ancient Rastafarians with huge shocks of dreadlocks, British Muslims wearing immaculate white kurtas blazoned with “ASK ME ABOUT ISLAM” and crusty old Brixton punks, I found it quite impossible to rid my mind of the Nice carnage – or stop wondering how they would react if armed soldiers were patrolling, instead of tit-helmeted, emphatically unarmed police.

I stepped into the Royal Horticultural Society marquee, and there they were: the entire cast of our end-of-the-pier-show politics, in vegetable-sculpture form and arrayed for judging. There was Jeremy Corbyn (or “Cornbin”) made out of corncobs – and Boris Johnson in the form of a beetroot, being stabbed in the back by a beetroot Michael Gove. And over there was Johnson again, this time rendered in cabbage. The veggie politicians were the big draw, Brixtonians standing six-deep around them, iPhones aloft.

The animal (as opposed to the vegetable) Johnson has begun his diplomatic rounds this week, his first démarches as tasteless and anodyne as cucumber. No British abandonment of friends after Brexit . . . Coordinated response to terror threat . . . Call for Erdogan to be restrained in response to failed coup . . . Blah-blah, whiff-whaff-waffle . . . Even someone as gaffe-prone as he can manage these simple lines, but I very much doubt he will be able to produce rhetorical flourishes as powerful as his hero’s. In The Churchill Factor: How One Man Made History, Johnson writes of Winnie overcoming “his stammer and his depression and his ­appalling father to become the greatest living Englishman”. Well, I’ve no idea if Bojo suffers from depression now but he soon will if he cleaves to this role model. His Churchill-worship (like so many others’) hinges on his belief that, without Churchill as war leader, Britain would have been ground beneath the Nazi jackboot. It may well be that, with his contribution to the Brexit campaign, Johnson now feels he, too, has wrested our national destiny from the slavering jaws of contingency.

Of course the differences between the two politicians are far more significant: Johnson’s genius – such as it is – lies in his intuitive understanding that politics, in our intensely mediatised and entirely commoditised era, is best conceived of as a series of spectacles or stunts: nowadays you can fool most of the people, most of the time. This is not a view you can imagine associating with Churchill, who, when his Gallipoli stratagem went disastrously wrong, exiled himself, rifle in hand, to the trenches. No, the French people Johnson both resembles and has an affinity for are the ones caught up in the virtual reality of Le Fantôme – rather than those patrolling the real and increasingly mean streets without. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt