Sainsbury’s delivers lots of change but limited growth, says Kantar Retail

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In a tightly contested market, Sainsbury’s is working hard in 2017/18 to earn the title of most creative mass market retailer of the year, according to Ray Gaul, vice president, Kantar Retail.

In just the first six months reported through to 23 September 2017, the group has delivered a wide range of innovations in grocery shopping, he says. These include partnerships with restaurants and speciality food businesses like Patisserie Valerie, investments in rapid delivery through the Chop Chop and Argos Fast Track services, and store refits to include omni-channel solutions from Argos and Habitat. Additionally, the group has made progress on creating a ‘scan & go’ mobile app that allows shoppers to bypass queues and bagging areas all together.

However, despite these creative new approaches to retailing, the retailer’s results will be seen as decent yet not spectacular for the first half-year, said Gaul. “It is true that the company has grown it core grocery topline revenues at 2.3% in the period. It is also true that a key indicator of overall retail health, like-for-like sales, have improved steadily over the last few trading statements and stand at 1.6% in this period covering all forms of trade. Both of these figures have been boosted strongly by excellent results from Sainsbury’s online and convenience businesses. However, the company continues to sit mid-table among its direct peers in terms of performance on revenues, like-for-likes, and market shares,” he said.

As Sainsbury’s looks to build momentum for an improved second-half and exciting 2018/19 period, it will need to do more than just cut costs and create synergies across retail platforms, said Gaul. “CEO Mike Coupe will want to start converting the group’s highly charged creative outputs into fast growth vehicles that sell goods to British consumers at large scale across the Sainsbury’s physical and digital platforms.”