Sainsbury’s Is Stabilising Its Business Gradually In 2016, Says Kantar Retail
Latest results show that Sainsbury’s is stabilising its business gradually in 2016, according to Kantar Retail.
Derya Yildiz, senior analyst at Kantar Retail, has stated that the retailer is aiming for growth in 2017/18 with "a new pricing strategy and a bigger assortment of food and non-food".
He commented, “Like-for-like sales, including fuel, are down 0.7 per cent in H1, but there is improvement on quarterly basis in Q2 over Q1, and FY 2015/16. Sales including fuel were flat in Q2."
Yildiz continued, “The new value proposition shows promise, however its rivals such as Asda may heat up the game with further price cuts as we get closer to the holiday season."
For Sainsbury’s, holidays are now the only times of the year for strong promotions, he believes.
“Completing the Home Retail Group acquisition marks a new era for Sainsbury’s. The executive moves show more focus on data management, online and non-food.
"Integration of the Argos offer with the core grocery business will be the top priority in the medium term to grow the basket size, looking to deliver food and non-food in one order."
Argos concessions will also help with sales space efficiencies.
“The retailer is aware that the acquisition is just the beginning and investment should continue to create real synergies: 30 out of 200 of the planned click & collect sites will be dedicated to Argos, and a new online fulfilment centre has opened in September in London to process 25,000 orders a week."
Sainsbury’s is also looking to expand its own non-food offer by launching Tu Premium clothing range and new active-wear ranges.
"Divestment of some non-core business such as Entertainment on Demand digital offer will only help to improve cost efficiencies.”
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