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is the parent company of '''Sainsbury's Supermarkets Ltd,''' commonly known as '''Sainsbury's,''' which is a chain of
Supermarket s in the
United Kingdom . The company is listed on the
London Stock Exchange . The J Sainsbury group also has interests in property and banking.
Sainsbury's was once the market leader in the UK supermarket sector, but is currently ranked
Third behind
Tesco . The company's fortunes have improved since the launch of a
Recovery Programme by CEO
Justin King in 2004 and ASDA CEO Andy Bond has suggested Sainsbury's may regain second position, lost in 2003. Sainsbury's disposed of its American subsidiary,
Shaw's , in 2004.
Sainsbury's was established as a partnership in
1869 when
John James Sainsbury and his wife Mary Ann opened a store in Drury Lane in
Holborn ,
London . In 1922 J Sainsbury was incorporated as a private company. In 1973 the company was floated as J Sainsbury plc in what was at the time the largest ever flotation on the London Stock Exchange. Today the family retain approximately 35% of the shares.
At the end of its 2004/05 financial year Sainsbury's store portfolio was as follows.
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Today there is little or no family ''(see below)'' involvement in the company, although they do still control approximately 35% of the shares.
David Sainsbury 's retirement as Chairman in 1998 brought to an end 129 years of management of the group by the Sainsbury family. As a government minister since 1998, his shares are held in a
Blind Trust .
The family shareholding makes the much rumoured takeover of the group all but impossible. This due to the fact that any buyer would have to have the agreement of the Sainsbury family, i.e. to sell their shares. This may be sentimental or for purely financial reasons, ''
The Sunday Times '' quoted a former director; ''"What would motivate them? They did not sell when the company was worth £11 billion, so why sell now when it is worth just over £4 billion?"''
Sir Peter Davis replaced
Dino Adriano as
CEO in March 2000 in what was seen as an attempt to regain market position. If he is judged on that aim, then he can be said to have failed, as Sainsbury's was demoted to third in the UK grocery market during his term. In his first two years he raised profits above targets, however the decline in performance relative to its competitors would lead the group to make its first ever loss in 2004. Davis also oversaw an almost £3Bn upgrade of stores, distribution and IT equipment, but Davis' successor would later reveal that much of this investment was wasted and he failed in his key goal - improving availability.
At the end of
March 2004 Davis was promoted to
Chairman and was replaced as CEO by
Justin King , who joined Sainsbury's from
Marks And Spencer Plc . King was also previously a managing director at
Asda .
In June 2004 Davis was forced to quit in the face of an impending shareholder revolt over his salary and bonuses. Investors were angered by a bonus share award of over £2m despite poor company performance.
On
July 19 2004 Davis' replacement, Philip Hampton, was appointed. Hampton has previously worked for
British Steel ,
British Gas ,
BT and
Lloyds TSB .
King ordered a direct mail campaign to 1 million Sainsbury's customers as part of his 6 month business review asking them what they wanted from the company and where the company could improve. This reaffirmed the commentary of retail analysts - the group is not ensuring that shelves are fully stocked, this due to the failure of the IT systems introduced by
Peter Davis .
On
October 19 2004 King unveiled the results of the business review and his plans to revive the company's fortunes. This was generally well received by both the stock market and the media. Immediate plans included laying off 750 headquarter staff and the recruitment of around 3,000 shopfloor staff to improve the quality of service and the firm's main problem: stock availability. At the same meeting Lawrence Christensen, the newly appointed supply chain director and an expert in logistics, highlighted the reasons for availability issues and his plan to address them. Immediate supply chain improvements included the reactivation of two distribution centres.
Another significant announcement was the halving of the
Dividend to increase funds available for price cuts and quality.
King has appointed successful industry figures to the company.
- Lawrence Christensen is formerly from Safeway
- Mike Coupe joins as trading director. Previously at Asda and Tesco.
- Gwyn Burr joins as head of customer service. Previously at Asda.
- Ken McMeikan, until joining the company in 2005 as Retail Director was a rising star within Tesco.
Since the 2004 business review and the company's first trading report of 2005 King has managed to stem the tide of negative stories in the press. Indeed the press received by the company has been increasingly positive, '''' on
March 10 2005. The stories did note however that Peter Davis seized on similarly upbeat trading figures early in his tenure, but ultimately failed to improve the company's fortunes.
In January 2006 Sainsbury's reported serving 19 million customers in the week before Christmas, the highest ever for a single week. In March 2006 Sainsbury's reported a 5.3% rise in sales, its fifth quarter of growth in a row. The performance of Sainsbury's Bank was poor due to bad debt.
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#denotes 52 weeks
#denotes 56 weeks.
#£168 million before exceptional costs (cost of "turnaround" plan and write off of excess merchandise etc.)
was established as a separate subsidiary of the group in March 1997 and remains the most significant part of J Sainsbury plc, despite diversification over the group's history.
Sainsbury's was for decades the premier supermarket in the UK, it lost this position however in 1995 to
Tesco , further slipping to No.3 in
2003 behind
Walmart -owned
Asda . In 2004 new chief executive Justin King launched a new strategy focused on supply-chain overhaul to tackle stock availability, increased competitiveness on price and improving customer service. In early 2005 Sainsbury's share of the UK grocery market began to increase slightly according to
TNS Superpanel . When the company's results were announced in May 2005 King claimed, "We are on track but still in the very early stages of a long-term recovery programme. "
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In 2003
Wm Morrison Supermarkets made an offer for the
Safeway group, prompting a bidding war between the major supermarkets. The
Trade And Industry Secretary ,
Patricia Hewitt , referred the various bids to the
Competition Commission which reported its findings on
September 26 th. The Commission found that all bids, with the exception of Morrisons, would "operate against the public interest". As part of the approval Morrisons was to dispose of 53 of the combined group's stores. In May 2004 Sainsbury's announced that it would acquire 14 of these stores, 13 Safeway stores and 1 Morrison outlet located primarily in the Midlands and the north of England. The first of these new stores opened in August 2004.
The supermarket chain operates three main store formats; regular Sainsbury's stores, Sainsbury's Local and Sainsbury's Central stores. The Locals and Centrals are similar to Tesco's Express and Metro formats, however the second and fourth biggest supermarket chains
Asda and
Morrisons do not currently have presence in this area of the market. Sainsbury's did operate "Sainsbury's SavaCentres" but merged theses stores into the regular superstore format when the company relaunched in 2001.
Sainsbury's use
NCR checkout or
Point Of Sale equipment operating
Retalix "Storeline" software. This replaces their previous
Fujitsu-ICL POS equipment (though some stores still have the old customer display units).
Sainsbury's is a founding member of the
Nectar Loyalty Card scheme, which was launched in autumn 2002 in conjunction with
Debenhams ,
Barclaycard and
BP . The Nectar scheme replaced the Sainsbury's Reward Card.
A large store typically stocks around 50,000 lines of which around 50% are "own-label" as opposed to branded goods. These own-brand lines include:
- Basics: an economy range of around 500 lines, mainly food but also including other areas including toiletries and stationery. The Basics range uses minimal packaging with simple orange and white designs, to keep the price as low as possible. Equivalent to Tesco's Value range and ASDA's Smartprice.
- Taste the Difference: around 800 premium food lines, including many processed foods (such as ready meals and premium bakery lines. Similar to Tesco Finest and Morrison's The Best".
- Kids: these lines are for children. In 2006 these lines replaced the Blue Parrot Café range.
- Be Good To Yourself: products with reduced calorific or fat content.
Since 2000
Jamie Oliver has been the public face of Sainsbury's, appearing on television and radio advertisements and in-store promotional material. The deal earns him an estimated £1.2 million every year. In the first two years these advertisements are estimated to have given Sainsbury's an extra £1 billion of sales or £200 million gross profit.
{Link without Title} By 2004 the company had made 65 adverts with Oliver.
Sainsbury's currently uses the "Try something new today" slogan which was launched in an effort to make consumers venture into purchasing more varied goods.
See Also: Sainsbury's Bank
In
1997 Sainsbury's Bank was established - a joint venture between J Sainsbury plc. and the
Bank Of Scotland .
Services offered include car, life, home, pet and travel insurance as well as health cover, loans,
Credit Card s,
Savings Accounts and
ISA s.
J Sainsbury's property interests are large, with a separate company within the group responsible for managing the company's existing property assets and the development of new ones (including new stores and other commercial properties).
Several members of the Sainsbury family have been prominent in British public life:
- John James Sainsbury (married Mary Ann Stables)
- --- Alan John Sainsbury (1902-1998), son of John's son John Benjamin Sainsbury, a Life Peer 1962 as ''Lord Sainsbury''
-- John Davan Sainsbury (1927-), a Tory Life Peer (Baron Sainsbury of Preston Candover)
-- Timothy Sainsbury , former Tory minister, married to Lady Sainsbury (1932-)
- Jamie Sainsbury
- Alexander Sainsbury , son of Timothy
- Jessica Sainsbury
- Camilla Sainsbury , daughter of Timothy, married to Conservative, then Labour, MP Shaun Woodward
-- Simon Sainsbury
- --- Robert Sainsbury (1907-2000), son of John Benjamin Sainsbury, who along with his wife Lisa began the collection of modern and tribal art housed at the Sainsbury Centre For Visual Arts , Norwich
-- David Sainsbury (1940-), Labour Life Peer (Baron Sainsbury of Turville)
-- Annabel Sainsbury , married name Annabel Kannabus, director of the HIV/AIDS charity AVERT
