Sainsbury’s convenience business grows despite supermarket sales fall

By Staff Writer in Industry News 4th May 2016

Sainsbury’s has posted a 1.1% fall in sales to £25.8bn in the 52 weeks to 12 March, in what the retailer described as a competitive, deflationary environment.

However, its convenience business saw growth of more than 9%, with 69 Sainsbury’s Local convenience stores opening in the period.

Latest figures from Kantar Worldpanel released today revealed that Sainsbury’s was the best performing of the big four supermarkets, retaining its 16.5% share of the market.

Sainsbury’s chief executive Mike Coupe said: “We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment.

“Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices. We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels.”

Analyst reaction

Commenting on the figures, Phil Dorrell, partner at Retail Remedy said: “It is clear where Mike Coupe sees the opportunity: a further 100 click and collect sites to be opened speaks volumes about the growth and still further growth potential of convenience grocery.

“The challenge is the fulfilment costs and the lack of delivery charge to counter those costs. That said, by steering the customer towards click and collect with more convenient locations, it is less costly than delivery to the door.

“Sainsbury have a lot on their plate and they are managing manfully to take the challenge of the discounters and the online business in their stride.”