Sainsbury’s didn’t only announce its plans to merge with Asda today. It also reported full-year results. Sales in the year to March 18 2018, the first full year following its acquisition of Argos, came in at £28.5bn, including fuel but excluding VAT. That’s 8.5% up on the same time last year, boosted by that acquisition, which completed in autumn 2016. Like-for-like sales, which strip out the effect of that acquisition, and of store openings and closures, rose by 1.3%. Pre-tax profits of £409m fell by 19% from £503m last time.
Chief executive Mike Coupe said: “We have accelerated the rate of change and innovation across the group and more customers are choosing to shop with us than ever before as a result.” He added: “We are focused on making Sainsbury’s a destination of choice. We are clearly differentiated by the quality of our food and we have recently invested a further £150 million to lower prices. General merchandise and clothing are both performing ahead of the market and, in response to great customer feedback and financial returns, we are opening Argos stores in our supermarkets faster than we originally planned.” He said the business had made £540m in savings over the last three years, beating a target of £500m that it would again target in the three years to 2021.
Argos is an Elite retailer in IRUK Top500 research, while Sainsbury’s is a Leading retailer.
We took a look at the highlights of its multichannel strategy.
Multichannel
Sainsbury’s has put the emphasis on enabling shoppers to buy wherever, whenever and however is convenient for them. Today it reported online sales up by nearly 7%, and convenience store sales up by nearly 8%. Some 60% of general merchandise digital sales now start online – 70% via mobile devices. That said, general merchandise sales were down by 0.8% which, said Sainsbury’s, represented an outperforming of the market.
Part of that strategy has seen it open digital format Argos stores, focused on enabling shoppers to place online orders and pick up existing orders in store, within branches of Sainsbury’s. So far, it said today, it has opened 191 stores in Sainsbury’s supermarkets – including 37 in Sainsbury’s Local convenience stores. It aims to have 250 open by next March, and 280 by the end of 2018/19. Tu clothing can now be ordered via the Argos website for home delivery or collect from more than 1,000 Argos stores and collection points.
Innovation
’Scan as you shop’ technology is now in 60 markets: Sainsbury’s says this supports customers’ aspirations to save time and control how much they spend.
Same-day groceries online delivery is now, said Sainsbury’s, available to 40% of the UK population.
Strategy
Sainsbury’s says it’s going through its biggest retail change programme ever, which is “transforming the way we work in our stores.” That programme is aimed at improving customer service, and becoming more efficient through the use of technology and simplified operations and structures. Its acquisition of the Nectar membership programme “supports our strategy of knowing our customers better than anyone else.”
Operations and logistics
The Argos Fast Track model, based around a hub and spoke model, enables the general merchandise retailers to deliver to 90% of postcodes in four hours. Over the full-year, Fast Track home deliveries were 28% ahead, while in-store collections rose by 45%.
Image courtesy of Sainsbury’s
