Davis pleased with year of recovery at Sainsbury's
largest supermarket group, said he was pleased with the group's
performance in the year to 30 March 2002, the first full year of
Sainsbury's recovery programme
Sir Peter Davis, chief executive of Sainsbury's, the UK's second largest supermarket group, said he was pleased with the group's performance in the year to 30 March 2002, the first full year of Sainsbury's recovery programme.
"We have now completed the first full year of our recovery programme and I'm pleased to report strong progress on delivering our promises, Davis said. "We are reporting 14 per cent underlying profit growth for the group after two years of decline and 10 per cent underlying profit growth for our supermarkets in the UK after three years of decline.
He continued: "We have exceeded targets for our cost reduction programme by £10 million (€15.7m) in 2001/02 and have now raised our savings target by a further £100 million to £700 million by March 2004. In the UK supermarket business we have achieved a step change in our sales performance with like-for-like sales growth of 6.3 per cent excluding petrol, our best performance in over a decade. This positive progress to date, along with our current plans, gives us confidence in achieving results in line with expectations in the current year."
Sales at the group's core supermarket business rose 7 per cent during the year to £14.9 billion, with 117 revamped stores contributing to the improvement. A renewed focus on quality food - including improvements or developments to more than 3,200 products - was also a major contributory factor, as was the extension of the non-food business including clothes and health and beauty products.
Davis said that the company had also worked hard to keep its prices competitive, and that it had reinvested some of its cost savings of £160 million in price reductions. Improvements to the group's IT and supply chain operations had also helped, he added. Ten new supermarkets and 15 new local Sainsbury's stores were opened during the year, while the trial of four 'mixed mission' outlets - with 20 per cent of floorspace dedicated to non-food items - had been encouraging, Davis said.The company also benefited from expanding the coverage of its Sainsbury's To You online shopping service, which now covers around 71 per cent of the UK.
The Shaw's supermarket business in the US registered an 11.6 per cent increase in sales to £3.1 billion, with like-for-like sales ahead 3.9 per cent.
The growth in sales has continued since the end of the last fiscal year in March, albeit at a slower rate. However, Davis said that the group remained confident of delivering results in line with market expectations for the current year.
The UK's number two food retailer seems to be on the way back, but it still has a long way to go to win back its crown from arch rival Tesco, which has gone from strength to strength as Sainsbury's has steadily declined. Better price control and an improved product mix will certainly help, but the question is will it be enough?
