Second Quarter Trading Statement for the 16 weeks to 24 September 2016
The latest results for Sainsbury's are only available to subscribers.
First Quarter Trading Statement for the 12 weeks to 4 June 2016
• Total Retail sales up 0.3 per cent (excl. fuel), down 0.1 per cent (inc. fuel)• Like-for-like Retail sales down 0.8 per cent (excl. fuel), down 1.0 per cent (inc. fuel)• Like-for-like transaction growth across all channels
Sainsbury’s latest update is in line with expectations of a market delivering flat value growth with the Big Four happy to be treading water to stem the loss of market share to the discounters. Deflation continues to erode value growth although Sainsbury’s did point out that there was volume growth across all the channels. On the one hand we’ve had falling food prices since July 2014 making it increasingly challenging for food retailers to deliver any value growth. On the other, a structural shift towards more convenience and top-up shopping has changed the retail economics of running a grocery business.New market entrants, digital technologies and changing consumer habits has left the UK grocery sector in a period of instability.
Mike Coupe, Chief Executive, said: "We have made a solid start to the year with like-for-like transaction growth across all our channels and total volume growth. Customers continue to shop with Sainsbury's, knowing we will deliver on our commitment to provide great quality products and services at fair prices, whenever and wherever they wish to shop."Sainsbury's is well-positioned. Our core food business offers customers choice, quality and a clear value proposition. General merchandise and clothing continue to perform well with good sales growth across both businesses, and we continue to see encouraging results from Sainsbury's Bank, a significant opportunity for long-term growth."Market conditions remain challenging. Food price deflation continues to impact our sales and pressures on pricing mean the market will remain competitive for the foreseeable future. However, we are confident that our strategy to be a trusted multi-channel, multi-product and services retailer is delivering and will enable us to continue to outperform our major peers."
Full Year Results
Preliminary Results for the 52 weeks to 12 March 2016
• Underlying Group Sales -1.1 per cent• Retail Sales (inc. VAT, ex fuel) +0.4 per cent• Like-for-like sales (inc. VAT, ex fuel) -0.9 per cent• Underlying profit before tax -13.8 per cent
Sainsbury’s continues to operate in a competitive trading environment experiencing sustained food price deflation. However, over the past year, Sainsbury’s has maintained market share at 16.5 per cent as a result of both volume and transaction growth. Sainsbury’s underlying Group sales (including VAT) declined by 1.1 per cent to £25,829 million (2014/15: £26,122 million) and underlying profit before tax (‘UPBT’) declined by 13.8 per cent to £587 million (2014/15: £681 million). Profit before tax of £548 million (2014/15: £72 million loss) was £39 million lower than UPBT, due to items that are excluded from underlying results.Although UK households have been supported by rising disposable incomes in the last 12 months, food retailers have not benefited to the same extent as other parts of consumer spending such as recreation and culture and leisure. This trend is likely to continue making Sainsbury’s acquisition of Argos and their strategy to become a truly omnichannel player vital to its future success.
Mike Coupe, Chief Executive, said: "We are making good progress against the strategy we outlined to shareholders in November 2014. We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment. We deliver great quality products and services at fair prices, whenever and wherever customers want to shop – and with volumes and transactions up, it is clear customers are responding positively to our offer. 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. These results reflect the multi-product, multi-channel shopping experience customers are looking for today and our proposed acquisition of Home Retail Group plc will accelerate our strategy in this direction."
Fourth Quarter Trading Statement for the 9 weeks to 12 March 2016
• Total Retail sales for fourth quarter up 1.2 per cent (excl. fuel), up 0.5 per cent (inc. fuel)• Like-for-like Retail sales for fourth quarter up 0.1 per cent (excl. fuel), down 0.4 per cent (inc. fuel)• Supermarkets deliver like-for-like transaction and volume growth
Overall these are positive results for Sainsbury’s and were ahead of market expectations. They also outpaced the overall market according to the BRC’s Retail Sales Monitor. In the 12 weeks to 27 February, the BRC’s figures showed growth in the total food market of +0.2 per cent while like-for-like food sales fell by -1.1 per cent. Despite the reporting periods not aligning precisely, we believe Sainsbury’s has continued to outperform the market at the expense of, primarily, Asda and Morrisons. Therefore, for the full year, Sainsbury’s sales growth is expected to come in at +0.4 per cent, excluding fuel, showing gradual improvement throughout the year. Like-for-like, excluding fuel, remains marginally positive at +0.1 per cent for the year, ahead of the market.
Mike Coupe, Chief Executive, said: “We have delivered a strong performance this quarter. Our supermarkets recorded both like-for-like transaction and volume growth and we continue to exceed our internal metrics for service and availability. We also maintained our market share in the quarter. The market will remain competitive as food deflation continues to impact sales growth.“Clothing delivered over ten per cent growth and we introduced our 22nd Gok Wan collection which had its best ever February launch. Entertainment also performed well, with nearly 11 per cent growth driven by some big releases in the quarter. Sainsbury’s Bank continued its good performance with 15 per cent volume growth in Insurance new business and 12 per cent growth in Travel Money in-store transaction volumes.“We have traded well this year and are making excellent progress implementing our strategy. The market will remain competitive but we are confident that we will continue to outperform our major peers.”
Q3 Trading Statement for the 15 weeks to 9 January 2016
• Total Retail sales for Q3 up +0.8 per cent (excl fuel), down +0.7 per cent (inc fuel) • Like-for-like Retail sales Q3 down -0.4 per cent (excl fuel), down -1.8 per cent (inc fuel) • Over 30 million customer transactions in the seven days before Christmas (up 2.6 per centyear-on-year)
Overall these are positive results for Sainsbury’s and were ahead of market expectations. They also reinforce Kantar’s view yesterday that Sainsbury’s successfully grew ahead of the market and were the winners over Christmas. Although, Tesco’s results are out tomorrow. Total sales were up +0.8 per cent in the 15 weeks to 9 January, outperforming +0.3 per cent in Q2 and -0.6 per cent in Q1 2016. Customers appear to appreciate simpler pricing with fewer promotions in favour of lower regular prices. The drive to expand the convenience proposition continued with the opening of 16 convenience stores in the quarter. The biggest day for convenience was achieved on 24 December. Online grocery sales were up almost +10 per cent over the period with order increasing by +15 per cent. Sainsbury’s had a record quarter by delivering over 289,000 online orders. There are now 101 click-and-collect sites in operation nationwide.General merchandise also performed well with growth of +5 per cent in the quarter and clothing grew by nearly +6 per cent, despite the mild weather.
Mike Coupe, Chief Executive, said: “We have traded well during the festive period in a highly competitive market. Our stores delivered excellent levels of service and availability and we launched several new seasonal products and range improvements. As a result we have seen our market share grow in the quarter .“We reduced our levels of vouchering and promotional participation year-on-year. We also reduced the number of multi-buys in favour of lower regular prices, continuing our commitment to simplify prices and promotions. Our continued investment in quality, price and service drove like-for-like transaction and volume growth year-on-year.”
Interim results for the 28 weeks to 26 September 2015
• Underlying Group sales (inc VAT) down 2.0 per cent to £13,641 million (2014/15: £13,916 million)• Retail sales (inc VAT, ex fuel) down 0.1 per cent• Like-for-like sales (inc VAT, ex fuel) down 1.6 per cent• Underlying profit before tax down 17.9 per cent to £308 million (2014/15: £375 million)
The market remains particularly challenging with Sainsbury’s overall market share declining, by 17 basis points, to 16.5 per cent (Kantar), driven in particular by the growth of the discounters. Profit before tax fell by 17.9 per cent to £308 million.A £150 million investment in price helped to drive transaction growth of almost 3 per cent and volume growth of 1 per cent. Nevertheless, sales at supermarkets declined just over 2 per cent driven by food deflation, lower like-for-like volumes and customers shopping across multiple channels. Convenience stores delivered sales growth of nearly 11 per cent with an additional 37 new stores opened over the period, taking the total to 741 stores at the half.Online grocery sales rose by 7 per cent, with orders up nearly 14 per cent.Clothing performed strongly, with sales up nearly 10 per cent and while Tu online was successfully launched. Management have commented that initial sales have exceeded expectations.The strategy to reduce cost is also on plan with operating cost savings of £115 million in the first half; full year cost savings are now expected to be around £225 million. Management suggest that they are on track to deliver £500 million cost savings over the next three years.
Mike Coupe, CEO, said: “The grocery retail marketplace remains challenging but Sainsbury’s is a great business, run by an experienced management team, supported by talented colleagues and strong values. I am confident we are making progress and we are looking forward to a successful Christmas”.