Sainsbury’s own-brand and sponsorships boost sales

Sainsbury’s has credited investments in own-brand products, its Brand Match promotion and its numerous sponsorships – including that of the 2012 Paralympic Games – for boosting sales in 2012.

Sainsbury's

Revenue grew 4.5 per cent to £23.3bn in the year to 16 March. Underlying profit rose 6.2 per cent to £756m, although its pre-tax figure fell 1.4 per cent to £788m to include the write-down of some of its property assets.

Sainsbury’s said it outperformed competitors last year, citing Kantar figures which showed it has a 16.8 per cent market share, its highest for more than 10 years.

The supermarket said 2012 was “truly a year like no other”, with sponsorships of major flagship events such as being a partner for the Queen’s Diamond Jubilee Beacons and Thames River Pageant and becoming the first ever Paralympic-only sponsor of the London 2012 Paralympic Games particular milestones for the company.

Sainsbury’s says its legacy programme has already contributed £2m of funding for schools, clubs and organisations, which the company will continue through its sponsorship of the Sainsbury’s Summer Series athletic events in Birmingham and London this year.

The company says it continued to address price perception in the year through its Brand Match Promotion and “meaningful and targeted” promotions through Nectar, which it says 12 million of its customers now regularly use.

Another driver for growth was Sainsbury’s own-brand sales, which it it says are outperforming the market and growing faster than brands. Last year the Sainsbury’s announced the relaunch of its core range, “by Sainsbury’s”, which accounts for nearly 40 per cent of sales and has been “well received” by customers and growing ahead of major competitors.

Other business highlights included double digit growth in its Tu clothing ranges, growing market share across all four categories of entertainment and 17 per cent year on year sales growth its its Locals convenience stores.

Sainsbury’s chief executive Justin King says: “Our focus on helping our customers Live Well For Less is delivering good growth in sales and profit. Our key points of difference, such as the best quality own-brand, Nectar, Brand Match, coupon at till and industry leading service, are recognised by our customers.

“Whilst we see no near term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are positioned for future growth.”

The grocer also announced today it plans to acquire the remaining 50 per cent shareholding it does not already own in Sainsbury’s Bank from the Lloyds Banking Group for £248m.

Sainsbury’s says developing complementary channels and services is a “core part” of its long-term strategy growth and full ownership of the bank will allow its full potential to be realised.

It adds: “Given that loyal bank customers spend more in our stores than non-bank customers, and that customer penetration is low, there is a significant opportunity to grow the bank and at the same time in-store sales and customer loyalty.”

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