Sainsbury’s ecommerce grocery business is now almost double its pre-pandemic size – but it says shopping patterns are getting back to normal as customers return in-store.
The supermarket, ranked Elite in RXUK Top500 research, says online grocery sales in the first quarter of its financial year were 94% ahead of the same period in 2019, and that it has successfully held onto customers that it gained during the pandemic. However, it also says that order numbers are normalising as shoppers return in-store.
The group now has 405 branches of digital-first general retailer Argos within Sainsbury’s supermarkets, after closing six Argos standalone stores during the quarter and opening five in-store. Its has opened a seventh local fulfilment centre, enabling Argos to offer fast online delivery and collection. And Sainsbury’s’ My Nectar loyalty scheme now has 9.6m digital members, used regularly by more than a million customers to get personalised prices.
First quarter sales
The retailer is today reporting figures for the first quarter of its 2022/23 financial year. This is the final quarter for which part of the comparative period, a year earlier, was during a UK Covid-19 lockdown. Lockdowns meant non-essential stores were closed and that gave a temporary boost to retailers, such as Sainsbury’s and those branches of its Argos general merchandise business that were within supermarkets, that could stay open and trade as normal. A year on, however, the supermarket is now reporting sales that are lower than last year – when the first five weeks was during lockdown – but ahead of pre-pandemic 2019.
The supermarket today reports that first quarter retail sales, excluding fuel, were 4.5% lower than a year earlier – but 5.4% ahead of the same time three years ago, in pre-pandemic 2019. Like-for-like sales, that strip out the effect of store openings and closures, were 4% lower than last year.
Grocery sales in the period, the 16 weeks to June 25 2022, were 2.4% down on a year earlier, but 8.7% ahead of the same period in 2019, while general merchandise sales were 11.2% down on last time, and 6.2% behind 2019. That includes a 10.5% year-on-year fall at Argos (-4.5% on 2019) and a 14.6% fall in general merchandise sales at Sainsbury’s supermarkets (-13.8% on 2019). Clothing sales were 10.1% down on last time, but 3.9% ahead of 2019.
The retailer says the sharpest falls were in the first five weeks of the quarter – one year on from the third UK Covid-19 lockdown. The trend improved in the subsequent 11 weeks, following the end of lockdown comparisons. Sainsbury’s general merchandise sales, for example were 30% lower than last year in the first five weeks of the quarter, but 5% lower in the subsequent 11 weeks.
Simon Roberts, chief executive of Sainsbury’s, says: “We really understand how hard it is for millions of households right now and that’s why we are investing £500 million and doing everything we can to keep our prices low, especially on the products customers buy most often.
“We’re working hard to reduce costs right across the business so that we can keep investing in these areas that customers care most about. The progress we are making on improving value, quality, innovation and service is reflected in our improved grocery volume market share.”
The retailer said it had outperformed the market during the Jubilee celebrations and had become the first major supermarket to pay the living wage to all staff. “The pressure on household budgets will only intensify over the remainder of the year and I am very clear that doing the right thing for our customers and colleagues will remain at the very top of our agenda,” says Roberts.