TIDMSBRY
RNS Number : 1343Y
Sainsbury(J) PLC
12 January 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Third Quarter Trading Statement for the 16 weeks to 8 January
2022
Strong Christmas grocery volumes and market share growth;
upgrade to profit guidance
Food First: focus on value, innovation and service delivering
volume market share gains
-- Market share gains: Our bold investments in value, new
products and service have driven volume market share gains, growing
ahead of the market through Q3 and the key Christmas period over
one and two years(1)
-- Value: We have invested in the value of our food ranges ahead
of the market(2) through the year, Q3 and at Christmas to improve
our price position and are more competitive than ever. Following
the success of our Sainsbury's Quality, Aldi Price Match Christmas
dinner campaign, we are now matching Aldi prices on 150 of our
highest volume fresh food products and putting over 2,000 lines
into our Price Lock promise so customers can be certain they are
getting great value on the items they buy most often
-- Innovation: We launched over 600 new products in Q3, of which
300 were new Christmas products, as part of our plan to triple our
levels of product innovation. New Taste the Difference products in
party food, desserts, wines and spirits were really popular and we
had record sales of champagne and sparkling wines. Taste the
Difference was our fastest growing product tier with sales up 13
per cent over two years in the key Christmas weeks(3)
-- Service: We launched a record recruitment drive this
Christmas, investing to employ 22,000 temporary colleagues to make
sure our stores were safe and well stocked and to meet online
demand. Online sales were nearly double the level of two years
ago(3) . Working with our suppliers and investing in our
operations, we improved availability and our customer satisfaction
scores. To reward colleagues, we are investing GBP100m to increase
the base pay to GBP10 per hour from March
Brands that Deliver: strategy supporting General Merchandise and
Clothing profitability
-- General Merchandise and Clothing sales were down year on year
reflecting an exceptional performance last year, limited
availability in key product areas and our focus on profitable
sales, including reduced promotional activity
-- Full price Clothing sales were up 38 per cent versus two
years ago as we reduced markdowns and promotions
-- General Merchandise and Clothing profits are in line with
expectations, reflecting stronger gross margins and operating cost
transformation
Upgrade to profit guidance, reflecting strong grocery sales,
cost savings delivery and improved Bank outlook
-- We now expect to report underlying profit before tax of at
least GBP720m in the financial year to March 2022(4)
Q3 and Christmas YoY Sales growth Yo2Y Sales growth
Trading
Highlights(5)
-------------------
Q3 Christmas Christmas exc. Boxing Q3 Christmas Christmas exc. Boxing
day day
16 wks to 8 Jan 22 6 wks to 8 Jan 22 6 wks to 8 Jan 22(6) 16 wks to 8 Jan 22 6 wks to 8 Jan 22 6 wks to 8 Jan 22(6)
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
Grocery (1.1)% 0.1% 0.8% 6.6% 6.8% 7.7%
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
General
Merchandise (16.0)% (10.6%) (10.4%) (11.0)% (8.6)% (8.3)%
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
Clothing (2.7)% 2.0% 2.9% (1.7)% 11.6% 12.9%
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
Total Retail
(exc. fuel) (5.3)% (2.9)% (2.4)% 1.4% 2.4% 3.1%
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
Groceries
Online (16.5)% (15.1)% (15.1)% 92.0% 95.2% 95.2%
-------------------- ------------------- ---------------------- -------------------- ------------------- ----------------------
Simon Roberts, Chief Executive of J Sainsbury plc, said
"I am really pleased with how we delivered for customers this
Christmas. More people ate at home and our significant investment
in value, innovation and service led to market share growth. At the
same time, we are pleased to increase profit guidance for the full
year.
"The backdrop was challenging and our teams worked hard
throughout the year to make sure we had all of the products
everyone wanted. Our suppliers did a great job in challenging
conditions throughout the quarter and I thank them for all their
support for our business.
"We were bold in our plan for product, value, innovation and
service and delivered volume growth ahead of the market. We
delivered our best value food this Christmas, launched our lowest
ever priced Christmas dinner heading into the key Christmas
shopping week and we had our biggest ever New Year. Customers also
treated themselves and new Taste the Difference products in party
food, desserts, wines and spirits were really popular and we had
record sales of champagne and sparkling wines. Offering great value
will be more important than ever this year and we have just
launched our bold new Sainsbury's Quality Aldi Price Match
campaign, which targets 150 fresh products that customers buy most
often.
"We also delivered a strong digital performance, responding to a
surge in demand for online deliveries over Christmas and
last-minute online gift shopping at Argos.
"Our teams have done a brilliant job working very hard in
exceptional circumstances. We delivered great service in our
supermarkets and strong availability this Christmas when it
mattered most. I'm hugely grateful to all our team for everything
they did to deliver for our customers and we closed all our stores
on Boxing Day this year to give our colleagues a well-deserved
break. We are increasing base pay for Sainsbury's and Argos store
colleagues to GBP10 an hour from March to recognise their brilliant
efforts every day in serving our customers."
Outlook
Our expectations for full year profits are ahead of previous
guidance, with investment in the customer proposition and higher
operating cost inflation offset by structural cost savings and
stronger than expected grocery volumes, driven in part by increased
in-home grocery consumption. Argos continued to benefit from
stronger margins supported by transformational operating cost
reductions. Financial Services profit expectations are running
ahead of consensus(7) with bad debts lower than expected and
lending volumes starting to recover. We now expect to report
underlying profit before tax of at least GBP720m in the financial
year to March 2022. Free cash flow remains strong and we expect to
meet our net debt reduction target ahead of schedule.
Total sales 2020/21 2021/22 2021/22
performance YoY Yo2Y
(5)
--------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3(8) Q1 Q2 Q3(8)
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Grocery 10.5% 5.1% 7.4% 7.1% 0.8% 0.8% (1.1)% 11.3% 6.0% 6.6%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
General
Merchandise 7.2% 7.6% 6.0% 17.6% (1.4)% (11.4)% (16.0)% 5.6% (4.7)% (11.0)%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
GM (Argos) 10.7% 10.9% 8.4% 18.1% (3.7)% (12.0)% (16.1)% 6.7% (2.4)% (9.1)%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
GM
(Sainsbury's
Supermarkets) (9.3)% (6.9)% (5.4)% 14.8% 11.2% (8.0)% (15.7)% 0.9% (14.4)% (20.0)%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Clothing (26.7)% (7.5)% 0.4% 4.2% 57.6% 9.2% (2.7)% 15.5% 1.0% (1.7)%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Total Retail
(exc.
fuel) 8.5% 5.2% 6.8% 9.2% 1.6% (1.7)% (5.3)% 10.3% 3.4% 1.4%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Fuel (56.1)% (29.3)% (29.0)% (38.5)% 95.1% 36.1% 47.5% (14.4)% (3.8)% 3.6%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Total Retail
(inc.
fuel) (2.1)% (0.4)% 1.7% 1.6% 8.5% 2.7% (0.1)% 6.2% 2.2% 1.7%
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Like-for-like sales 2020/21 2021/22
performance (5)
-----------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3(8)
------- ------- ----- ------ ----- ------- -------
Like-for-like sales (exc.
fuel) 8.2% 5.1% 8.6% 11.3% 1.6% (1.4)% (4.5)%
------- ------- ----- ------ ----- ------- -------
Like-for-like sales (inc.
fuel) (2.3)% (0.5)% 3.2% 3.2% 8.4% 3.0% 0.6%
------- ------- ----- ------ ----- ------- -------
Strategic and operational highlights
Food First
We continue to make good progress against the plan we set out in
November 2020 to put food back at the heart of Sainsbury's. We are
committed to delivering brilliant value for our customers on the
products that they buy most often, and our new and exciting
products are proving to be popular. Q3 grocery sales were slightly
below last year's elevated levels, up 6.6 per cent versus Q3 19/20
and ahead of last year over the key Christmas weeks. Fuel sales
increased by 47.5 per cent as customer demand normalised and we
gained market share.
Value
-- Our Value Index improved against all key competitors and
improved 670bps against Aldi year on year(9) . Customer
satisfaction for Value for Money Spent is up 4 percentage points
year on year(10)
-- In December we launched our biggest ever festive value
campaign to match Sainsbury's Quality with Aldi prices on key
Christmas dinner items. Turkey Crowns were GBP6.89 a kilo, a 1.4kg
gammon joint was priced at GBP5.70 and festive vegetables were only
19p a pack. This bold campaign encouraged more customers to do
their festive shopping at Sainsbury's and those products sold over
20 per cent more volume than last year(11)
-- To kickstart the New Year we have launched a new wave of
Sainsbury's Quality, Aldi Price Match with a focus on 150 fresh
products that customers buy most often
Service
-- Colleagues delivered excellent customer service throughout
the key Christmas weeks and customers felt safe shopping with
us(12) . Friendliness and knowledge of staff scores both improved
year on year
-- In recognition of the outstanding job our colleagues do for
our customers, we are investing GBP100 million in colleague reward,
increasing the base rate for our shop colleagues to GBP10 per hour
from March and increasing the frequency of a higher discount for
colleagues when they shop with us
-- We delivered strong food availability for Christmas, despite
many challenges, benefiting from our scale, strong supplier
relationships and the adaptability of our supply chain and
logistics operations
-- Groceries Online sales grew by 92 per cent versus two years
ago, with weekly orders increasing again in recent weeks to over
700,000 per week. Orders in Christmas week were up 41 per cent year
on year
-- Our On Demand grocery offer continues to grow, operating from
around 580 stores through Chop Chop, Deliveroo and Uber Eats
-- We opened three new supermarkets during the quarter in
Colwick, Ludlow and Aylesbury and opened five convenience stores,
with sales ahead of expectations
-- As part of our Plan for Better, all new supermarkets have
been designed with all natural refrigerants and use 100 per cent
renewable electricity
-- In partnership with Neighbourly, our stores connected with
local partners to redistribute nearly 150,000 meals on Christmas
Eve to those in need
Innovation
-- We launched over 300 new Christmas products, including 100
premium Taste the Difference products. This is a significant
increase year on year, in line with our target to triple our levels
of food product innovation. Standout new products included our
Taste the Difference Belgian Chocolate & Salted Caramel Star,
Bucks Fizz Smoked Salmon and Lemongrass Skewer Prawn Pops
-- Taste the Difference sales were up 13 per cent over two years
in the key Christmas weeks, as many customers chose to treat
themselves and trade up. Taste the Difference Meat, Fish and
Poultry sales were up 25 per cent, Produce sales up 16 per cent and
Bakery sales up 12 per cent(13) . Sales of champagne and sparkling
wines were the highest ever and we sold our biggest ever volume of
Taste the Difference mince pies
-- We delivered our best ever Christmas for meat-free
alternative centrepieces, with popular products including Plant
Pioneers Maple Glazed No Gammon Joint and No Salmon Encroute
-- We reduced plastic by nine tonnes in our Christmas chocolate
range, brandy butter, roulade and gift sets packaging and launched
a plastic-free range of Christmas crackers
-- Performance of our first Autumn Editions food range was
really strong with many lines exceeding expectations
Brands that Deliver
-- General merchandise sales declines reflect the impacts of
both weak demand and limited supply in some key categories and our
strategy to focus on profitable sales. The technology, gaming and
toy markets all declined by double digits(14) . This reflects tough
comparatives against last year's lockdown and also the ongoing
impact of global supply chain challenges on product
availability
-- Sales in some categories continue to be additionally impacted
by deliberate choices we made to run fewer promotions and focus on
more profitable sales, significantly reducing the number of
promotional days versus two years ago(15) . These choices and the
relative strength of our home and furniture categories, which
benefitted from increased Habitat participation, have supported
Argos's gross margins. We outperformed the Furniture market on a
two-year basis(14)
-- We closed 27 Argos standalone stores in the quarter, bringing
the total to 338 and opened 25 Argos stores in Sainsbury's
supermarkets, bringing the total to 398. Argos digital
participation remains high with 77 per cent of sales originating
online
-- Full price Clothing sales were up 38 per cent versus two
years ago as we reduced markdowns and promotions and focus on good
value all year round. Particular highlights this year were
Christmas jumpers and matching family pyjamas
-- Building on the launch of My Nectar Prices in September we
continue to drive Nectar digital registrations and now have 8.7
million digital customers. We are currently delivering around 95
million My Nectar Prices personalised discounts every week
-- In Financial Services we are making good progress reducing
costs. We are seeing encouraging first signs of improvement in
volumes, with consumer spend and credit demand both increasing and
bad debts lower than expected
Tim Fallowfield, Company Secretary and Corporate Services
Director, was responsible for the disclosure of this
announcement.
Investor Relations Enquiries Media Enquiries
James Collins +44 (0) 20 7695 0080 Rebecca Reilly +44 (0) 20
7695 7295
Notes
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause
actual events or results to differ materially from any expected
future events or results referred to in these forward-looking
statements. Unless otherwise required by applicable law, regulation
or accounting standard, we do not undertake any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future developments or otherwise.
A conference call will take place at 09:15. To listen to the
audio webcast we recommend that you register in advance. To do so,
please visit
https://www.about.sainsburys.co.uk/investors/results-reports-and-presentations
prior to the event and follow the on-screen instructions. A
transcript will be available following the conference call.
Sainsbury's will announce its Preliminary Results for the
financial year to 5 March 2022 on 28 April 2022.
1 Kantar Worldpanel division, Q3= 12 weeks to 26 December 21, 27
December 20 and 29 December 19. Christmas = 4 weeks to 26 December
21, 27 December 20 and 29 December 19. Total Grocery volume
growth
2 Nielsen panel data, Top 100 products by retailer, Average
Selling Price inflation YoY
3 6 weeks to 8 Jan 22
4 6 July 2021: "We now expect to report underlying profit before
tax of at least GBP660 million in the financial year to March
2022"
5 Including VAT
6 Adjusted for Boxing Day 2021 closure by excluding Boxing Day
sales from prior years. 6 weeks to 8 Jan 22
7 Based on latest internal forecasts. Current analyst consensus
for Financial Services Underlying Operating Profit: FY21/22
GBP26m
8 In calculating the sales performance, Q3 2020/21 and Q3
2019/20 comparatives have been adjusted to reflect a 16 week
trading period (previously 15 weeks)
9 Value Reality. Sep-Jan 22 vs Sep - Jan 21; Edge by Ascential;
internal modelling
10 Service Management Group Competitor Benchmark Survey, Q3
2021/22
11 On SKUs included in the festive SQAPM campaign, sales data
for financial week 42 YoY
12 Kokoro safety measures, The Score. Top performing major
grocer financial weeks 40-44
13 Taste the Difference sales growth on a two-year basis, 6
weeks to 8 Jan 22
14 Tracked Markets Product Volume Market Share Performance, 3
months ending November 2021, Yo2Y. GfK data for Gaming and
Technology. NPD data for Toys
15 Q1-3 21/22 vs Q1-3 19/20
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTDGGDBGBBDGDB
(END) Dow Jones Newswires
January 12, 2022 02:00 ET (07:00 GMT)
Sainsbury (j) (LSE:SBRY)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Sainsbury (j) (LSE:SBRY)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024
