- Sainsbury’s aims for £1 billion savings
- Focuses on food, automation increase
- May consider layoffs, strategy shifts
Aiming for £1 billion in savings and an increase in automation are additional objectives of the company’s new strategies, which include purchasing more supplies and fewer garments.
An updated strategy by Sainsbury’s, focusing more heavily on food and seeking to save £1 billion over the next three years, has not ruled out the possibility of layoffs.
The corporation, which also owns Argos, disclosed its intentions to restructure its supermarket division by reducing the space devoted to apparel and general merchandise in several of its flagship locations to make room for additional grocery sections.
This decision reflects the chain’s recent sales patterns; it is second only to Tesco in terms of grocery market share.
An increase in automation, along with reductions in deliveries, waste, and replenishment costs, will all contribute to the new £1 billion savings target.
A spokesperson for Sainsbury’s stated, “Caring for our colleagues will always be our highest priority, as demonstrated by our recent £200 million investment in an industry-leading pay increase.”
Additionally, “Next Level Sainsbury’s” includes measures such as increasing capital expenditure on convenience stores, strengthening the Nectar loyalty programme, and enhancing customer satisfaction.
Since the 2008 financial crisis, the grocery sector has faced intense competition, with the expansion of discounters Aldi and Lidl forcing established chains to increase their value offerings to protect their market shares.
Last year, Sainsbury’s share price increased by 40%.
However, it seemed investors were not particularly enthused by the company’s newly announced commitments, as the stock price fell by nearly 4% by mid-morning.
Before the start of its 2024/25 fiscal year, Sainsbury’s stated it would implement a progressive dividend policy and initiate a £200 million share repurchase programme.
However, it also confirmed the expectation of an increase in capital expenditures and did not raise the target for free cash flow.
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Simon Roberts, chief executive officer, stated, “Over the past three years, our Food First strategy has been a resounding success, transforming Sainsbury’s into a more resilient organisation with a significantly enhanced focus on value and a substantial reorientation towards innovation.”
Customers have recognised our growth, as demonstrated by our market share gains.
“Next Level” Sainsbury’s strategy is to deliver more of what its customers have come to expect: exceptional value, food of unparalleled quality, and superior service. “Thanks to our size, reputation, and people, we are uniquely positioned to serve Sainsbury’s, Argos, and Nectar customers.”
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