TIDMSBRY
RNS Number : 2853R
Sainsbury(J) PLC
05 July 2022
First Quarter Trading Statement for the 16 weeks to 25 June
2022
Trading in line with expectations, outlook unchanged , good
grocery volume market share performance
Simon Roberts, Chief Executive of J Sainsbury plc, said: "We
really understand how hard it is for millions of households right
now and that's why we are investing GBP500 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.
"Our customers are watching every penny and every pound but they
also look to Sainsbury's when they want to treat themselves,
particularly at special occasions. We are really connected to our
customers and through strong delivery of our plan, we have
outperformed the market at key events such as the Jubilee(1) .
"I would like to thank my colleagues for their brilliant efforts
this quarter. We are proud to be the first major supermarket to pay
the Living Wage to all colleagues, regardless of where they live -
and to have increased Sainsbury's colleague pay by 25% and Argos by
39% over the past five years. 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."
Financial highlights and outlook
-- Good grocery performance, with sales down 2.4% against last
year's elevated COVID-19 driven levels and 8.7% ahead of
pre-pandemic sales
-- General Merchandise and Clothing sales in line with
expectations, with an improved sales trend following the first
five-week period when non-essential retail was closed during
lockdown last year
o Argos sales down 7% in the last 11 weeks of the quarter, down
19% in the first five weeks
o Sainsbury's General Merchandise sales down 5% in the last 11
weeks, down 30% in the first five weeks
o Clothing sales down 2% in the last 11 weeks, down 26% in the
first five weeks
-- Outlook unchanged; continue to expect FY22/23 underlying
profit before tax of between GBP630m and GBP690m
Q1 22/23 YoY (vs Q1 Q1 22/23 Yo3Y (vs
21/22) Q1 19/20)
16 weeks to June
Total sales growth % 16 weeks to June 25th 25th
------------------------------------- ------------------
Grocery (2.4%) 8.7%
Total General Merchandise (11.2%) (6.2%)
GM (Argos) (10.5%) (4.5%)
GM (Sainsbury's supermarkets) (14.6%) (13.8%)
Clothing (10.1%) 3.9%
Total Retail excl. Fuel (4.5%) 5.4%
Like-for-like sales excl.
Fuel (4.0%)
------------------------------------- ------------------
Strategic and operational highlights
Food First: Good volume market share performance against strong
prior year comparative and ahead of the market versus pre
pandemic(2) , reflecting improved value position and product
innovation. Structurally advantaged store estate and reputation for
quality also ensuring customers are consistently choosing
Sainsbury's to help them celebrate special occasions and trade up
for everyday treats.
Value
-- Investing over GBP500 million over the two years to March
2023 in keeping our prices low, funded by cost savings; continuing
to inflate behind competitors(3)
-- Sainsbury's Quality, Aldi Price Match campaign driving
secondary customer basket growth(4) , matching Aldi on over 240
products, including the top 20 products that customers buy most
often
-- More Price Lock items held at stable prices than any of our big 4 competitors
-- Value index against Aldi strongest ever; improved 350 basis points year-on-year(5)
-- Improved value messaging in-store through new value aisles and stronger promotional signage
Quality & Innovation
-- Launched 371 new products during the quarter, including 95
new Taste the Difference products. Performance of our new Summer
Edition range has been strong with many lines exceeding
expectations
-- Taste the Difference sales were up over 12% year-on-year over
the Jubilee week with customers choosing to celebrate with
traditional British summer products. Taste the Difference Prosecco
and clotted cream scones were particularly popular and we sold a
record-breaking number of Taste the Difference strawberries
-- Sales of beer, wines and spirits during the Jubilee week were
the highest ever outside of Christmas and Easter, with Pimms,
sparkling wine and champagne selling particularly well
Service
-- Supermarket customer satisfaction continues to be ahead of our key competitors(6)
-- Store improvement programme driving efficiency and delivering
better service for customers. Greater product breadth in areas like
World Foods and improved layouts making it easier for customers to
find what they want
-- Groceries online order numbers continue to normalise as more
customers return to store. Sales were 94% above pre-pandemic levels
and we are pleased with our market share performance as we hold on
to customers gained during the pandemic
Brands that Deliver:
-- Argos sales down 4.5% versus 19/20, maintaining the improved
trend against pre-pandemic levels seen in Q4 21/22(7) and
reflecting improved availability
-- In line with our plan to reduce costs and improve
convenience, we closed six Argos standalone stores and opened five
Argos stores inside Sainsbury's supermarkets, bringing the total to
405 stores inside supermarkets
-- Opened our seventh new Local Fulfilment Centre, enabling more
customers to buy from Argos faster and more conveniently
-- Sainsbury's General Merchandise down 14.6%, reflecting tough
lockdown-driven comparatives and strategic decision to rebalance
space allocation in stores and exit the entertainment category
-- Clothing sales were up 3.9% versus pre-pandemic and down
year-on-year against a benefit from competitors being closed during
lockdown. Women's dresses, holiday wear and swimwear performed
especially well as travel increased
-- Nectar is driving value by delivering personalised prices for
over one million regular customers through My Nectar Prices. Nectar
digital registrations are now at 9.6 million
-- Financial Services continues to make progress with our plan
to simplify the business. We are cautiously growing unsecured
lending balances and Travel Money volumes are recovering faster
than expectations
Plan for Better:
-- Launched our new Community and Partnership strategy, which
focuses on tackling food poverty, with a total of GBP2 million
given to stores to support projects in their local community
-- Extended our successful food donation partnership with Neighbourly to convenience stores
-- Introduced partnership with UK charity Newlife to all
supermarkets, where Tu clothing not sold in store will be recycled
or resold to support disabled and terminally ill children
-- To reduce plastic, we launched refillable handwash pouches,
which are estimated to save a total of 28 tonnes of plastic every
year and changed five pack Fairtrade bananas from plastic bags to
paper bands, removing 25 million single-use plastic bags
Detailed sales information
2021/22 2022/23
---------------------
Q1 Q2 Q3 Q4 Q1 YoY Q1 Yo3Y(8)
---------------------------------- ------- -------- -------- -------- -------- -----------
Like-for-like sales
growth
------- -------- -------- -------- -------- -----------
Like-for-like sales (excl.
fuel) 1.6% (1.4)% (4.5)% (5.6)% (4.0)%
------- -------- -------- -------- -------- -----------
Like-for-like sales (incl.
fuel) 8.4% 3.0% 0.6% 2.7% 2.9%
------- -------- -------- -------- -------- -----------
Total sales growth
------- -------- -------- -------- -------- -----------
Grocery 0.8% 0.8% (1.1)% (1.6)% (2.4%) 8.7%
------- -------- -------- -------- -------- -----------
Total General Merchandise (1.4)% (11.4)% (16.0)% (21.1)% (11.2%) (6.2%)
------- -------- -------- -------- -------- -----------
GM (Argos) (3.7)% (12.0)% (16.1)% (20.4)% (10.5%) (4.5%)
------- -------- -------- -------- -------- -----------
GM (Sainsbury's Supermarkets) 11.2% (8.0)% (15.7)% (24.1)% (14.6%) (13.8%)
------- -------- -------- -------- -------- -----------
Clothing 57.6% 9.2% (2.7)% (9.3)% (10.1%) 3.9%
------- -------- -------- -------- -------- -----------
Total Retail (excl.
fuel) 1.6% (1.7)% (5.3)% (6.2)% (4.5%) 5.4%
------- -------- -------- -------- -------- -----------
Fuel 95.1% 36.1% 47.5% 80.1% 48.3% 26.9%
------- -------- -------- -------- -------- -----------
Total Retail (incl.
fuel) 8.5% 2.7% (0.1)% 2.2% 2.5% 8.9%
---------------------------------- ------- -------- -------- -------- -------- -----------
Investor Relations Enquiries Media Enquiries
James Collins +44 (0) 20 7695 0080 Rebecca Reilly +44 (0) 20
7695 7295
Notes
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause
actual events or results to differ materially from any expected
future events or results referred to in these forward-looking
statements. Unless otherwise required by applicable law, regulation
or accounting standard, we do not undertake any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future developments or otherwise.
A conference call will take place at 9:15am (BST). To listen to
the audio webcast please register at
https://sainsburys-q1-trading-statement-22-23.open-exchange.net/registration
. A transcript and recorded copy of the Q&A call will be
available following the conference call.
Sainsbury's will announce its Interim Results for the half year
ending 17 September 2022 on 3 November 2022.
(1) Nielsen panel YoY unit growth: Sainsbury's growth vs Total
Outlets growth. Jubilee week 28 May to 4 June 2022
(2) Nielsen panel data, Grocery volume growth. 15 weeks to 18
June 2022 versus 15 weeks to 15 June 2019. Total FMCG excl.
K&T
(3) Nielsen panel data, Top 100 SKUs by retailer. Average
Selling Price YoY growth
(4) Secondary Shoppers - Volume Growth. Nielsen Panel, Total
FMCG (excl. Kiosk & Tobacco), 12wks to 28 May 22. Market
Universe: Total Outlets
(5) Value Reality: 6 March - 25 June 2022 vs 7 March - 26 June
2021. Edge by Ascential; internal modelling
(6) Competitor Benchmarking survey. Supermarket overall
satisfaction. Q1 22/23 data
(7) Q4 21/22 Argos Yo2Y sales growth vs Q4 19/20 of (4.7)%
(8) Q1 22/23 vs Q1 19/20
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END
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