Sainsbury’s posted a pre-tax loss of £72m for the year to 15 March, down from a profit of £898m last year. Much of this was down to a £628m writedown of its property portfolio. Trading profit fell 15% to £681m, the first fall in 10 years.
Sainsbury’s CEO Mike Coupe, speaking on a call this morning following the results announcement, said the supermarket needs to make more of the fact that it “knows more about its customers than anyone else” to drive other facets of the business. It has data on its customers from its Nectar loyalty scheme, as well as through its online shopping and financial service businesses.
“[We can use data to decide] how we range shops and do a better job than competitors. At the other end of the spectrum we can use it to sell financial services, credit cards, loans. This customer knowledge is a great base to boost our business,” he said.
Coupe said introducing single sign-on across Sainsbury’s businesses, rather than making customers sign-in with different accounts across online, the bank and Nectar, would help boost the business by helping it provide more personalised marketing.
“At the moment we have 20 different sign-ons. We want to focus the customer proposition through a single identity sign-on.
“We are moving towards communicating with customer on a personalised basis and interacting with them in a fundamentally different way. Customer knowledge enables us to do a better job of serving them on an individual basis than we have done in the past,” he added.
Customer data is a “key component” of a “differentiated offer” that Coupe said has enabled Sainsbury’s to outperform rivals Tesco and Morrisons over the past five years and will help it continue to do so.
The latest figures from Kantar Worldpanel show that Sainsbury’s was the best performing of the big four despite a 0.2% dip in sales for the 12 weeks to 26 April due to “more shoppers through the door”.
By comparison sales at Morrisons declined 1.1% while Tesco fell back by 1%. Only Waitrose, Aldi and Lidl saw sales increase in the period as overall market growth slowed to 0.2%.
Sales at stores open for more than a year fell 1.9% excluding fuel, while total sales were down 0.7%. Coupe said he expects like-for-like sales to remain negative for the next 12 to 18 months as the supermarket industry “changes faster than at any time in the past 30 years”.
The big four supermarkets are losing market share to discounters Aldi and Lidl and struggling in the face of changing consumer habits as people increasingly moving away from big weekly shops at out-of-town centres to more frequent shops online and an convenience stores.
Sainsbury’s said sales at its main stores fell 2%, partially offset by a 16% increase in convenience sales to £2.1bn and a 7% rise in online revenues to £1.1bn.
Coupe reiterated Sainsbury’s focus on values and quality, highlighting that it is making improvements to 3,000 products. The supermarket also said it will invest £110m on price this year, having invested £40m in the second half of last year.
Coupe claims that Sainsbury’s is already seeing a volume increase on the back of price cuts as customers “get the fact they are getting better value”.
“We are making good progress with our strategy and our investment in price and quality is showing encouraging early signs of volume and transaction growth,” he said.
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