Sainsbury’s profits from horsemeat scandal

Christmas: flop, Easter: top

Sainsbury’s announces
it made 23 million transactions per week in the fourth quarter of its financial year, which ended on 16 March. That is a record
for the third largest food-retailer in Great-Britain.

It also means a boost after a disappointing third quarter, where identical sales growth was a meagre 0.9 percent: the worst
performance of Sainsbury’s since 2005 and extra disappointing as the
important Christmas-period during that third quarter.

In the meantime it is almost Easter and
Sainsbury’s can revel in more promising results for the fourth quarter, where
identical growth rose by no less than 3.6 percent (over the entire year the
identical sales growth is 1.8 percent). The strongly improved quarterly
performance is a consequence of more Brits finding their way to Sainsbury’s
since the outbreak of the horsemeat scandal.

Trust in private labels

Sainsbury’s also makes this connection, be it in
different words: “All of our fresh beef is sourced from the UK and Ireland and
we have routinely carried out DNA testing on our products for over ten
years,” says the report. “The issues experienced by the industry over the
last quarter underscore the importance of our detailed understanding of our
supply chain.“

The growing amount of customers and the continued trust also benefit the sales of Sainsbury’s’s private labels.
That is good news for the margin: “With the re-launch of the by Sainsbury’s
range almost complete, sales have grown by around 9 percent year-on-year”, says
Sainsbury’s. “Our differentiated own-brand offer is complemented by the price
reassurance of Brand Match on branded products.”

Multi-channel successful

In the fourth quarter total sales of Sainsbury’s
rose by 6.3 percent (on a yearly basis total sales rose by 4.3 percent). In
these period it also opened three supermarkets and nineteen convenience
stores. Over the entire year Sainsbury’s opened fourteen new supermarkets (and
closed two) and the number of convenience stores grew by 83 (87 opened and four
closed).

The convenience stores of Sainsbury’s have an annual sales growth of 18 percent. To facilitate this strong growth, Sainsbury’s
recently opened a new distribution centre in Thameside that is completely
focused on the growing convenience business in London and the South-East of
England.

That the multi-channel approach is successful,
show the online sales that rose by 20 percent in the past fiscal year.
Sainsbury’s now services 190,000 online customers per week. Non-food is even
growing three times as fast as food. Especially in clothing (+20%) and home
appliances (+25%) Sainsbury’s had an impressive sales growth.