Sainsbury announces new online venture as results improve

Supermarket chain Sainsbury’s has reported a strong 28% rise in pre-tax profit to £488m, in the year to March 22. The supermarket chain also plans to launch an online non-food service which rivals Asda and Tesco already offer.

Like-for-like sales, excluding fuel, also rose 3.9%, and it attracted an additional 2.5 million customers to its stores. The supermarket says the results mark the completion of its three year “Making Sainsbury’s Great Again” recovery plan, announced in October 2004.

In March this year it launched the “Feed your family for a fiver” campaign created by Abbott Mead Vickers.BBDO. It aimed to show customers how to make affordable, healthy and nutritious meals for a family of four with a budget of £5.

The supermarket chain claims that since the Jamie Oliver campaign began sales of featured ingredients have shown a marked increase. Sales of minced meat featured in the television commercial increased by 200% and demand for ‘basics’ spaghetti and tinned tomatoes also saw significant increases.

Chairman Philip Hampton says: “This year has been particularly significant for Sainsbury’s since it marked the completion of the ‘Making Sainsbury’s Great Again’ recovery plan announced in October 2004 and we moved from a period of recovery to growth.”

As part of its wider strategy it also plans to launch an online non-food offer with a £15m revenue investment in 2008-09. The service will launch in the first half of the next financial year.

Announcing the results chief executive Justin King says that consumer budgets are “clearly under pressure” and he expects the market to remain “intensely competitive”. However, he adds: “Sainsbury’s is now a much better business able to compete and grow in this challenging environment.”