Sainsbury’s [IRDX RSBR] this week reported good sales growth in its Argos [IRDX RARG] general merchandise business (total sales +3.8% in the nine weeks to March 11, like-for-like (LFL) up by 4.3%), but falling like-for-likes in its supermarket business (total sales +0.1%, LFL -0.5%). Overall, the group’s like-for-like sales grew by 0.1%, excluding fuel.
The supermarket, a Leading retailer in IRUK Top500 research, had some interesting things to say about how it is developing its business across sales channels, and answering customer demands for convenient shopping. Here are some of the highlights.
Selling groceries across channels
Sainsbury’s reported a 7% rise in online grocery sales, while orders grew by 8%. Its convenience business, part of its multichannel strategy of enabling customers to buy wherever and whenever they want, also saw sales grow – and by nearly 7%. The supermarket opened 10 convenience stores duirng the fourth quarter of its financial year.
It continues to focus on bringing supermarket shoppers the opportunity to do more of their shopping in one place, with 11 new Argos Digital stores opening in supermarkets. There are now 41 of the stores, which focus on online ordering and collection, in its stores nationwide – and eight Mini Habitat stores.
Investing in selling general merchandise online
Investment in digital continues in the general merchandiser under its new ownership – Sainsbury’s chief executive Mike Coupe points to improvements both to the Argos website and app. “Online participation is growing,” he said, “driven by mobile and Fast Track delivery and customers are responding well to new ranges.” Technology sales were particularly strong. But while Argos sales showed healthy growth, Sainsbury’s said its own general merchandise sales fell by 4%; it puts this down to a later Mother’s Day and Easter.
Moving away from discounting
Sainsbury’s is now focusing on lower every day prices rather than one-off discounting. It says its move to reduce the number of promotions it takes part in has cut operating costs, and food waste.
Kantar Retail Market Insights researcher Simon Johnstone says it’s about being as relevant as possible.
“Sainsbury’s stores are embracing a micro convenience mentality with higher levels of flexibility to be as relevant as possible,” he said. “Ultimately, Sainsbury’s is trying to be the retailer that gets its shoppers in and out of the store, with exactly what they need, as quickly as possible.”
Mentioned in this piece…
- Sainsbury's Argos, Home Retail Group