Sainsbury’s is launching a bold new strategy to enhance profits and customer experience.
- The focus is on expanding food range offerings across more stores, investing in loyalty programs, and optimizing store space.
- Reduction in general merchandise to prioritize food offerings is a key component of this plan.
- Argos is set to see more frequent customer visits with enhanced digital and in-store presence.
- Cost-saving measures of £1bn aim to fund technology and productivity improvements.
Sainsbury’s has announced an ambitious new strategy called ‘Next Level Sainsbury’s‘ aimed at boosting profits by prioritizing its food offerings, the Nectar loyalty card, and enhancing convenience for customers. This strategy builds on the success of their previous ‘Food First‘ initiative. According to CEO Simon Roberts, they are just beginning to understand their full potential, which fuels this strategic vision.
A significant aspect of Sainsbury’s strategy is the expansion of its food range to more stores. Currently, only 15% of around 600 stores offer the full range. The plan includes investing in approximately 180 high-potential supermarkets over the next three years to accommodate more food products. This decision follows the realization that previous caution regarding cost has limited their offerings. To make room, Sainsbury’s will reduce its in-store general merchandise. An independent commentator, Nick Gladding, sees this as a low-risk shift likely to enhance profitability, as general merchandise can instead be sold through Argos.
Sainsbury’s is also enhancing its ‘world-leading loyalty platform‘, with a particular focus on its Nectar card. While the Nectar prices powered a strong Christmas performance, improvements are needed, especially in simplifying the offer activation process. The strategy involves integrating Nectar more deeply into the shopping experience, transforming it beyond mere rewards. CEO Simon Roberts envisions Nectar 360, their loyalty and marketing services agency, boosting profits by £100m over the next three years, up from previous projections.
The strategy for Argos under Sainsbury’s umbrella aims to increase customer visits beyond the current average of three per year. Simon Roberts intends to provide a broader selection of brands and products, enhancing digital engagement, and reinforcing ‘click and collect‘ services. There is a focus on marketing Argos’s strengths both in-store and online to invite more interaction. Nick Gladding suggests placing Argos sections more visibly within grocery stores to naturally attract Sainsbury’s customers.
Lastly, Sainsbury’s plans to save £1bn and channel this towards innovation and improved customer focus. They aim to improve efficiency and productivity through investment in advanced technology such as automation and AI. Simon Roberts highlights the benefits of flexible technology in transforming operations, including automated tills and warehouse robots, while acknowledging potential impacts on employment. Despite strong recent sales figures, external competition remains a concern. However, the confidence in their strategic direction signifies optimism for continued growth.
Sainsbury’s new strategy, by aligning resources and technology with customer needs, aims to sustain its growth trajectory amid a competitive market.
