Sainsbury’s has turned itself into a digital first business during the COVID-19 pandemic in order to compete in the current market, according to Ray Gaul, SVP of Retail Insights, Kantar.
Commenting on the retailer’s Q1 results – digital sales more than doubled and the supermarket’s SmartShop app is now used in 37% of transactions on average – Gaul said the new chief executive, Simon Roberts, was competing on a different playing field.
“Making his debut as new boss, Simon Roberts, with just one month in control, will feel like J. Sainsbury’s Plc is competing on an altogether different playing field than the one he trained for over the past two plus years as head of Sainsbury’s stores, operations, and logistics. Rather than competing against a fellow Big 4 rival at Wembley, Roberts must navigate his team through minor pitches, in a series of local battles, on grounds that have not been looked after in some time.
“Retail growth in Britain is coming from the grassroots – with neighbourhood shops outperforming superstores, last year’s bottom three taking the role of table leaders, and online reaching limits with more new shoppers than capacity. The result: on Roberts’ first day he overhauled the front office putting former digital director, Clodagh Moriarty in charge of a digital first total retail business. Digital sales are now over 15% of total business and online grocery growing at an 87% annual pace.
“Still, the company continues its bold renovation plans in its superstore core. The renovation can be likened to attempting to build a new home ground. The new “Sainsbury’s” stadium embraces the motto: Fast, friendly, and convenient (FFC). It is coming to life in large scale with over 1,000 store projects completed each year.
“This work has not slowed during Covid-lockdown, in fact it has accelerated. Chop Chop deliveries from superstores have expanded to 15 more British cities. Covid-driven fears have advanced some of the investments in the FFC transformation. Sainsbury’s centrepiece innovation ‘SmartShop’, a handheld personalised digital app that speeds shopper journeys, is now used in over 37% of all transactions.
“The result is that while Sainsbury’s has taken on extraordinary additional costs to stay open during the pandemic, sales have grown at a record pace making it much easier to cover these costs and remain true to 2020/21’s financial objectives. Sainsbury’s is now a digital first business in a revamped league competition.”