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

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.