Sainsbury's is the second largest chain of supermarkets in the United Kingdom, with a 16.9% share of the supermarket sector in the United Kingdom. Founded in 1869, by John James Sainsbury with a shop in Drury Lane, London, the company became the largest retailer of groceries in 1922, was an early adopter of self-service retailing in the United Kingdom, and had its heyday during the 1980s. In 1995, Tesco overtook Sainsbury's to become the market leader, and Asda became the second largest in 2003, demoting Sainsbury's to third place for most of the subsequent period until January 2014, when Sainsbury's regained second place.
The holding company, J Sainsbury plc, is split into three divisions: Sainsbury's Supermarkets Ltd (including convenience shops), Sainsbury's Bank and Sainsbury's Argos. The group's head office is in Sainsbury's Support Centre in Holborn Circus, City of London. The group also has interests in property.
As of February 2018, the largest overall shareholder is the sovereign wealth fund of Qatar, the Qatar Investment Authority, which holds 21.99% of the company. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
In April 2018, Sainsbury's entered talks with Walmart about a proposed merger with Asda, which could form the largest UK supermarket company.
Video Sainsbury's
History
Origin and growth (1869-1955)
Sainsbury's was established as a partnership in 1869, when John James Sainsbury and his wife Mary Ann opened a shop at 173 Drury Lane in Holborn, London. Sainsbury started as a retailer of fresh foods and later expanded into packaged groceries such as tea and sugar. His trading philosophy, as stated on a sign outside his first shop in Islington, was: "Quality perfect, prices lower".
Shops started to look similar, so in order that people could recognise them throughout London, a high cast-iron 'J. SAINSBURY' sign featured on every shop so their shops could be seen from a distance, and round-the-back deliveries started to add extra convenience and not upset rivals due to Sainsbury's popularity.
In 1922, J Sainsbury was incorporated as a private company, as 'J. Sainsbury Limited', when it became the United Kingdom's largest grocery group.
By this time each shop had the following departments: dairy, bacon and hams, poultry and game, cooked meats, and fresh meats. Groceries were introduced in 1903, when John James purchased a grocer's branch at 12 Kingsland High Street, Dalston. Home delivery featured in every shop, as there were fewer cars in those days. Sites were carefully chosen, with a central position in a parade selected in preference to a corner shop. This allowed a larger display of products, which could be kept cooler in summer, which was important as there was no refrigeration.
By the time John James Sainsbury died in 1928, there were over 128 shops. His last words were said to be: 'Keep the shops well lit'. He was replaced by his eldest son, John Benjamin Sainsbury, who had gone into partnership with his father in 1915.
During the 1930s and 1940s, with the company now run by John James Sainsbury's eldest son, John Benjamin Sainsbury, the company continued to refine its product offerings and maintain its leadership in terms of shop design, convenience, and cleanliness. The company acquired the Midlands-based Thoroughgood chain in 1936.
Alan Sainsbury, the founder's grandson (later Lord Sainsbury of Drury Lane) became joint managing director of Sainsbury's, along with his brother Sir Robert Sainsbury, in 1938, after their father, John Benjamin Sainsbury, had a minor heart attack.
Following the outbreak of World War II, many of the men who worked for Sainsbury's were called to perform National Service and were replaced by women. The Second World War was a difficult time for Sainsbury's, as most of its shops were trading in the London area and were bombed or damaged. Turnover fell to half the prewar level. Food was rationed, and one particular shop in East Grinstead was so badly damaged on Friday 9 July 1943 that it had to move to the local church, temporarily, while a new one was built. This shop was not completed until 1951.
Self-service and heyday (1956-1991)
In 1956, Alan Sainsbury became chairman after the death of his father, John Benjamin Sainsbury. During the 1950s and 1960s, Sainsbury's was a keen early adopter of self-service supermarkets in the United Kingdom; the first self-service shop within the country was a co-operative shop opened in 1942. On a trip to the United States of America, Alan Sainsbury realised the benefits of self-service shops and believed the future of Sainsbury's was self-service supermarkets of 10,000 sq ft (930 m2), with eventually the added bonus of a car park for extra convenience. The first self-service branch opened in Croydon in 1950.
Sainsbury's was a pioneer in the development of own-brand goods; the aim was to offer products that matched the quality of nationally branded goods but at a lower price. It expanded more cautiously than did Tesco, shunning acquisitions, and it never offered trading stamps.
Until the company went public on 12 July 1973, as J Sainsbury plc, the company was wholly owned by the Sainsbury family. It was at the time the largest ever flotation on the London Stock Exchange; the company rewarded the smaller bids for shares in order to create as many shareholders as possible. A million shares were set aside for staff, which led to many staff members buying shares that shot up in value. Within one minute the list of applications was closed: £495 million had been offered for £14.5 million available shares. The Sainsbury family at the time retained 85% of the firm's shares.
Most of the senior positions were held by family members. John Davan Sainsbury (later Lord Sainsbury of Preston Candover), a member of the fourth generation of the founding family, took over the chairmanship from his uncle Sir Robert Sainsbury in 1969, who had been chairman for two years from 1967 following Alan Sainsbury's retirement.
Sainsbury's started to replace its 10,000 sq ft (930 m2) High Street shops with self-service supermarkets above 20,000 sq ft (1,900 m2), which were either in out of town locations or in regenerated town centres. Sainsbury's policy was to invest in uniform, well designed shops with a strong emphasis on quality; its slogan was "good food costs less at Sainsbury's".
During the 1970s, the average size of Sainsbury's shops rose from 10,000 sq ft (930 m2) to around 18,000 sq ft (1,700 m2); the first edge of town shop, with 24,000 sq ft (2,200 m2) of selling space, was opened at Coldhams Lane in Cambridge in 1974. The last counter service branch closed in Peckham in 1982.
To participate in the hypermarket sector, Sainsbury's formed a joint venture, known as SavaCentre, with British Home Stores. The first SavaCentre shop was opened in Washington, Tyne and Wear, in 1977; nearly half the space, amounting to some 35,000 sq ft (3,300 m2), was devoted to textiles, electrical goods and hardware. As the hypermarket format became more mainstream, with rivals such as Asda and Tesco launching ever larger shops, it was decided that a separate brand was no longer needed, and the shops were converted to the regular Sainsbury's supershop format in September 1999.
Another diversification took place in 1979, when Sainsbury's formed a joint venture with the Belgian retailer, GB-Inno-BM, to set up a chain of do-it-yourself shops under the Homebase name.
Sainsbury's sold the Homebase chain in December 2000, in an twofold deal worth £969 million. Sales of the chain of shops to venture capitalist Schroder Ventures generated £750 million and sale of 28 development sites, which had been earmarked for future Homebase shops, were sold for £219 million to rival B&Q's parent company, Kingfisher plc.
In November 1983, Sainsbury's purchased 21% of Shaw's Supermarkets, the second largest grocery group in the northeastern United States (primarily in New England). In June 1987, Sainsbury's acquired the rest of the company with the intention of creating a high-quality regional food retailing business based on the same principles as the UK-based operation.
In 1985, the chairman reported that over the preceding 10 years profits had grown from £15 million to over £168 million, a compound annual rise of 30.4% - after allowing for inflation a real annual growth rate of 17.6%.
During the 1980s, the Company invested in new technology: the proportion of sales passing through EPOS scanning checkouts rose from 1% to 90%.
With the advent of out of town shopping complexes during the 1980s, Sainsbury's was one of the many big retail names to open new shops in such complexes - notably with its shop at the Meadowhall Shopping Centre, Sheffield (originally as a SavaCentre) in 1990, which was converted into a regular Sainsbury shop in 2005, and was closed in 2006 and the Merry Hill Shopping Centre at Brierley Hill in the West Midlands (part of an Enterprise Zone), which opened in September 1989.
Sainsbury's expanded its operation into Scotland with a shop in Darnley, which opened in January 1992, (the SavaCentre at Cameron Toll in Edinburgh had opened in 1984). In June 1995, Sainsbury's announced its intention to move into the Northern Ireland market, until that point dominated by local companies.
Between December 1996 and December 1998, the company opened seven shops. Two others at Sprucefield, Lisburn, and Holywood Exchange, Belfast would not open until 2003, due to protracted legal challenges. Sainsbury's move into Northern Ireland was undertaken in a very different way from that of Tesco. While Sainsbury's outlets were all new developments, Tesco (apart from one Tesco Metro) instead purchased existing chains from Associated British Foods (see Tesco Ireland).
In 1991, the Sainsbury's group boasted a twelve-year record of dividend increases, of 20% or more and earnings per share had risen by as much for nearly as long. Also in 1991, the company raised £489 million, in new equity to fund the expansion of supershops.
Sainsbury's decline (1992-1998)
In 1992, the long time CEO John Davan Sainsbury retired, and was succeeded as chairman and chief executive by his cousin, David Sainsbury (later Lord Sainsbury of Turville); this brought about a change in management style - David was more consensual and less hierarchical but not in strategy or in corporate beliefs about the company's place in the market.
Mistakes by David Sainsbury and his successors, Dino Adriano and Peter Davis, included the rejection of loyalty cards, the reluctance to move into non-food retailing, the indecision between whether to go quality or for value, "the sometimes brutal treatment of suppliers" which led to suppliers favouring Tesco over Sainsbury's and the unsuccessful John Cleese advertising campaign.
At the end of 1993, it announced price cuts on three hundred of its most popular own label lines. Significantly, this came three months after Tesco had launched its line Tesco Value. A few months later, Sainsbury's announced that margins had fallen, that the pace of new supershops construction would slow down, and that it would write down the value of some of its properties.
In 1994, Sainsbury's announced a new town centre format, Sainsbury's Central, again a response to Tesco's Metro, which was already established in five locations. Also in 1994, Sainsbury's lost the takeover battle for William Low (like Tesco, Sainsbury's had long been under-represented in Scotland). Also that year, David Sainsbury dismissed Tesco's clubcard initiative as 'an electronic version of Green Shield Stamps'; the company was soon forced to backtrack, introducing its own Reward Card eighteen months later.
For much of the twentieth century, Sainsbury's had been the market leader in the supermarket sector in the United Kingdom, but in 1995, it lost its place as the country's largest grocery to Tesco. Some new ventures were successful, notably the launch of a retail bank, Sainsbury's Bank, in partnership with Bank of Scotland.
In addition to Shaw's, Sainsbury's bought a minority stake in another supermarket group, Giant Food, based in Washington, DC, although this shareholding was subsequently sold when Ahold of the Netherlands made a full bid for the company.
An arrangement in late 1995 with Supermarket Direct made Sainsbury's the first major grocery in the UK to offer a home delivery service.
Sainsbury's also trebled the size of its Homebase do it yourself business during 1996, by merging its business with Texas Homecare, which in January 1995, it acquired from Ladbroke for £290 million.
In May 1996, the company reported its first fall in profits for twenty two years. David Sainsbury announced management changes, involving the appointment of two chief executives, one in charge of supermarkets within the United Kingdom (Dino Adriano) and the other responsible for Homebase, and the United States (David Bremner).
Finally, in 1998, David Sainsbury himself resigned from the company to pursue a career in politics. He was succeeded as non executive chairman by George Bull, who had been chairman of Diageo, and Adriano was promoted to be Group Chief Executive.
The brand re-launch (1998-2003)
In June 1998, Sainsbury's unveiled its new corporate identity, which was developed by M&C Saatchi, which consisted of the current company logo, new corporate colours of "living orange" and blue, Interstate as the company's new general use lowercase font from the old all uppercase font, the new slogan "Making life taste better", which replaced its old slogan from the 1960s and new staff uniforms.
The strapline was dropped in May 2005, and replaced in September of that year by "Try something new today." This new brand statement was created by Abbott Mead Vickers BBDO. While the Interstate font was used almost exclusively for many years, the company introduced another informal font in 2005, which is used in a wide range of advertising and literature.
In 1999, Sainsbury's acquired an 80.1% share of Egyptian Distribution Group SAE, a retailer in Egypt with one hundred shops and 2,000 employees. However, poor profitability led to the sale of this share in April 2001. On 8 October 1999, the CEO Dino Adriano lost control of the core supermarket business within the United Kingdom, instead assuming responsibility for the rest of the group. David Bremner became head of the supermarkets in the United Kingdom. This was "derided" by the city and described as a "fudge". On 14 January 2000 Sainsbury's reversed this decision by announcing the replacement of Adriano by Sir Peter Davis effective from March.
Between 2000-2004, Sir Peter Davis was chief executive of Sainsbury's. Davis' appointment was well received by investors and analysts.
In his first two years, he exceeded profit targets, although by 2004 the group had suffered a decline in performance relative to its competitors and was demoted to third in the grocery market within the United Kingdom. Davis also oversaw an almost £3 billion upgrade of shops, distribution and IT equipment, entitled 'Business Transformation Programme', but his successor would later reveal that much of this investment was wasted and he failed in his key goal - improving availability. Part of this investment saw the construction of four fully automated depots, which at £100 million each cost four times more than standard depots.
In 2001, Sainsbury's moved into its current headquarters at Holborn, London. Sainsbury's previously occupied Stamford House and twelve other buildings around Southwark. However the accounting department remained separate at Streatham. The building was designed by architectural firm Foster and Partners, and had been developed on the former Mirror Group site for Andersen Consulting (now Accenture), however, Sainsbury's acquired the twenty five-year lease when Accenture pulled out.
Sainsbury's is a founding member of the Nectar loyalty card scheme, which was launched in September 2002, in conjunction with Debenhams, Barclaycard and BP; Debenhams and Barclaycard have subsequently both left the scheme. The Nectar scheme replaced the Sainsbury's Reward Card; accrued points were transferred over.
In January 2003, Wm Morrison Supermarkets (trading as Morrisons) made an offer for the Safeway group, prompting a bidding war between the major supermarkets. The Trade and Industry Secretary, Patricia Hewitt, referred the various bids to the Competition Commission which reported its findings on 26 September. The Commission found that all bids, with the exception of Morrison's, would "operate against the public interest". As part of the approval Morrison's was to dispose of fifty three of the combined group's shops.
In May 2004, Sainsbury's announced that it would acquire fourteen of these shops, thirteen Safeway shops and one Morrison's outlet, located primarily in the Midlands and the North of England.
'Making Sainsbury's Great Again' (2004-2006)
At the end of March 2004, Davis was promoted to chairman and was replaced as CEO by Justin King. King joined Sainsbury's in from Marks and Spencer plc where he was a director with responsibility for its food division and Kings Super Markets, Inc. subsidiary in the United States. Schooled in Solihull, near Birmingham and a graduate of the University of Bath, where he took a business administration degree, King was also previously a managing director at Asda with responsibility for hypermarkets.
In June 2004, Davis was forced to quit in the face of an impending shareholder revolt, over his salary and bonuses. Investors were angered by a bonus share award of over £2 million, despite poor company performance. On 19 July 2004, Davis' replacement, Philip Hampton, was appointed as chairman.
King ordered a direct mail campaign to one million Sainsbury's customers as part of his six-month business review, asking them what they wanted from the company and where the company could improve. This reaffirmed the commentary of retail analysts - the group was not ensuring that shelves are fully stocked, this due to the failure of the IT systems introduced by Peter Davis.
On 19 October 2004, King unveiled the results of the business review and his plans to revive the company's fortunes - in a three-year recovery plan entitled 'Making Sainsbury's Great Again'.
This was generally well received by both the stock market and the media. Immediate plans included laying off over 750 headquarters staff, and the recruitment of around 3,000 shop floor staff, to improve the quality of service and the firm's main problem: stock availability. The aim would be to increase sales revenue by £2.5 billion by the financial year ending March 2008. Another significant announcement was the halving of the dividend to increase funds available for price cuts and quality.
King hired Lawrence Christensen as supply chain director in 2004. Previously he was an expert in logistics at Safeway, but left following its takeover by Morrisons. Immediate supply chain improvements included the reactivation of two distribution centres. At the time of the business review on 19 October 2004, referring to the availability problems, Justin King said "Lawrence hadn't seen anything that he hadn't seen before. He just hadn't seen them all in the same place at the same time".
In 2006, Christensen commented on the four automated depots introduced by Davis, saying "not a single day went by without one, if not all of them, breaking down... The systems were flawed. They have to stop for four hours every day for maintenance. But because they were constantly breaking down you would be playing catch up. It was a vicious circle." Christensen said a fundamental mistake was to build four such depots at once, rather than building one which could be thoroughly tested before progressing with the others.
In 2007 Sainsbury's announced a further £12 million investment in its depots to keep pace with sales growth and the removal of the failed automated systems from its depots. In addition, it did a deal with IBM to upgrade its Electronic - Point of Sale systems as a result of increased sales.
Sainsbury's sold its subsidiary in America, Shaw's, to Albertsons in March 2004. Also in 2004 Sainsbury's expanded its share of the convenience shop market through acquisitions. Bell's Stores, a chain of fifty-four shops based in North East England, was acquired in February 2004. Jacksons Stores, a chain of one hundred and fourteen shop based in Yorkshire and the North Midlands, was purchased in August 2004. JB Beaumont, a chain of six shops in the East Midlands, was acquired in November 2004. SL Shaw Ltd, which owned six shops, was acquired on 28 April 2005 for £6 million.
Since the launch of King's recovery programme, the company has reported nineteen consecutive quarters of sales growth, most recently in October 2009. Early sales increases were credited to solving problems with the company's distribution system. More recent sales improvements have been put down to price cuts and the company's focus on fresh and healthy food.
Takeover bids (2007)
On 2 February 2007, after months of speculation about a private equity bid, CVC Capital Partners, Kohlberg Kravis Roberts (KKR) and Blackstone Group announced that they were considering a bid for Sainsbury's. The consortium grew to include Goldman Sachs and Texas Pacific Group. On 6 March 2007, with a formal bid yet to be tabled, the Takeover Panel issued a bid deadline of 13 April.
On 4 April, KKR left the consortium to focus on its bid for Alliance Boots. On 5 April, the consortium submitted an "indicative offer" of 562p a share to the company's board. After discussions between Sir Philip Hampton and the two largest Sainsbury family shareholders Lord Sainsbury of Turville and Lord Sainsbury of Preston Candover the offer was rejected. On 9 April, the indicative offer was raised to 582p a share, however this too was rejected. This meant the consortium could not satisfy its own preconditions for a bid, most importantly 75% shareholder support; the combined Sainsbury family holding at the time was 18%.
Lord Sainsbury of Turville, who then held 7.75% of Sainsbury's, stated that he could see no reason why the Sainsbury's board would even consider opening its books for due diligence for anything less than 600p per share. Lord Sainsbury of Preston Candover, with just under 3%, was more extreme than his cousin, and refused to sell at any price.
He believed any offer at that stage of Sainsbury's recovery was likely to undervalue the business, and with private equity seeking high returns on their investments, saw no reason to sell, given that the current management, led by Justin King, could deliver the extra profit generated for the benefit of existing investors.
He claimed the bid 'brought nothing to the business', and that high levels of debt would significantly weaken the company and its competitive position in the long term, which would have an adverse effect on Sainsbury's stakeholders. On 11 April, the CVC led consortium abandoned its offer, stating "it became clear the consortium would be unable to make a proposal that would result in a successful offer."
In May 2007, Sainsbury's identified five areas of growth: Growth of non-food ranges; opening of new convenience shops and growth of online home delivery and banking operations; Expansion of supermarket space through new shops and development of the company's "largely underdeveloped shop portfolio"; and "active property management".
On 25 April 2007, Delta Two, a Qatari investment company, bought a 14% stake in Sainsbury's causing its share price to rise 7.17%, which was then upped to 17.6%. Their interest in Sainsbury's is thought to centre on its property portfolio. They increased their stake to 25% in June 2007. On 18 July 2007, BBC News reported that Delta Two had tabled a conditional bid proposal. Paul Taylor, the principal of Delta Two, flew David and John Sainsbury to Sardinia to reveal and discuss the potential bid which amounted to 600p per share.
The family had reservations about the price of the bid. Secondly, they were concerned about the proposed structure which involved splitting the business into an operating company and a highly leveraged property company. Thirdly, they were concerned about adequacy of funding both for the bid and for the company's pension scheme. On 5 November 2007, it was announced Delta Two had abandoned its takeover bid due to the "deterioration of credit markets" and concerns about funding the company's pension scheme.
Administrative changes
On 4 October 2007, Sainsbury's announced plans to relocate its Shop Support Centre from Holborn to Kings Cross in 2011. The new office will be part of a new complex, to allow for both cost savings and energy efficiency. These savings will be made through the use of efficient building materials and design, a combined heat and power energy centre and the use of renewable energy sources.
In January 2008, Sainsbury's brought its number of its supermarkets in Northern Ireland to eleven, with the purchase of two Curley's Supermarkets in Dungannon and Belfast, which includes those shops' petrol stations and off licences.
In November 2007, Sainsbury's centralised its HR department, relocating to the seventeenth and eighteenth floors of the Manchester Arndale Centre to form a Shared Service Centre, which was initially trialled to deal with Recruitment in Scotland and was later rolled out to the whole country. July 2009 saw the HR Shared Service Centre in Manchester expand to include most HR Processes in its Colleague Administration Department and Occupational Health enquiries in a dedicated unit.
Since April 2012, the centre has begun a gradual relocation to its new offices in the centre of Lincoln, along with a rebrand and partial relaunch as Sainsbury's HR Services.
Further re organisation has seen central finance operations move from the Holborn Head Office to Manchester, and property division move to Ansty Park in Coventry. Most of the remaining Holborn operations are likely to move to Coventry in due course, as Sainsbury's looks to reduce costs by moving out of Central London.
Developing the business (2009-2016)
In March 2009, Sainsbury's reached an agreement to buy 24 shops from The Co-operative Group, 22 of which were Somerfield shops, which the group were required to sell as a condition of their takeover of Somerfield. A further nine shops were purchased from The Co-operative Group in June 2009. These were concentrated in West Wales, the North of England and Scotland, where Sainsbury's market share is low.
In May 2010, Sainsbury's confirmed a multimillion-pound deal with the London Organising Committee of the Olympic and Paralympic Games (LOCOG) to be the main sponsor of the 2012 Paralympic Games. Under the deal, Sainsbury's sold Paralympic merchandise and became involved in high-profile events, such as the torch relay. It became one of only two sponsors able to take advantage of the limited branding allowed within the Games. The promotional rights did not extend to the Olympics. After the Paralympic Games, the company decided to sponsor the British Paralympic Association through to Rio 2016.
On 30 November 2011, Sainsbury's reached the first milestone in its Vision for 2020, by opening its thousandth self-service shop in Irvine, Scotland. To celebrate this, Sainsbury's doubled its staff discount to 20% for the first four days of December. In January 2014, Sainsbury's completed the purchase of the 50% share in Sainsbury's Bank, owned by Lloyds Banking Group.
In July 2014, the company began powering one of its shops by converting food waste into bio methane gas to generate electricity. The group became the first retailer to come off the National Grid by its own means. In July 2016, Arcus FM extended its facilities management contract with Sainsbury's, securing a ten-year renewal. Arcus won the initial contract in 2009, and saw the contract extended in 2011.
Multi-channel retailer and restructuring (2016-present)
After a four month pursuit, in April 2016 Home Retail Group agreed to be taken over by Sainsbury's for £1.4bn, Sainsbury's completed the acquisition in September 2016. The deal included catalogue chain Argos and furnishing retailer Habitat, which made Sainsbury's the largest retailer of merchandise in the UK. Once the deal was complete the J Sainsbury's group was split into its three new divisions of Sainsbury's, Sainsbury's Bank and Sainsbury's Argos (including Habitat). Throughout 2016 and 2017 Sainsbury's pursued expansion of its multi-channel strategy, increasing the number of grocery Click and Collect points and online fulfilment locations to serve its online delivery network including opening a dark store in Bromley by Bow to serve the London area, increasing geographical coverage of its same-day grocery delivery network and integrating concessions into its shops such as Argos, Habitat, Timpson's and Starbuck's.
In November 2016 Sainsbury's announced its intentions to cut £500 million of costs from its business. In March 2017 400 jobs were cut and 4000 jobs were re-organized, mainly affecting employees in nightshift and commercial operation (cash office and price control) roles.
In August 2017 1000 jobs were cut throughout all of its Head Office and support centres, affecting a variety of functions.
In October 2017 changes to security contracts meant that provider Mitie reduced the number of security officers within shops. In the same month Sainsbury's announced plans to axe all shop based Human Resource employees including HR managers, payroll clerks, administration clerks and Learning and Development managers, overall affecting 1400 jobs. Additionally another 600 jobs at its Head Offices were cut.
In January 2018 Sainsbury's announced proposals to overhaul shop management structures which would result in job losses 'in the thousands'.
On 1 February 2018 announced the purchase of Nectar from Aimia. The deal costing £60 million gives full control of all data stored by the loyalty scheme to Sainsbury's Argos. Sainsbury's was one of the co-founders of the scheme and was the most prominent participant of the scheme. Aimia employees working on Nectar will become Sainsbury's employees but the team will remain a separate structure away from Sainsbury's.
In March 2018 Sainsbury's announced that it would be increasing the base rate of pay for its staff to retain the best workers. It said it would increase pay by 15% in the year, spending an extra £100 million on a plan that will also simplify the number of job roles.
Merger with Asda
In April 2018, Sainsbury's entered talks with Walmart about a proposed merger with Asda, which could form the largest UK supermarket company. Under the plans, Walmart would own 42% of the combined business, which would be led by the exisiting chief executive of Sainsbury's, Mike Coupe. The group would also open branches of Argos within Asda shops.
Maps Sainsbury's
Leaders
Shops
In May 2018 Sainsbury's shop portfolio was as follows.
According to CACI, as of 2006, Sainsbury's has market dominance in 8 postcode areas; TQ (Torquay), SN (Swindon), GU (Guildford), RH (Redhill), DA (Dartford), SE (South East London), EN (Enfield) and WV (Wolverhampton).
It is particularly strong in London and the South-East, where it is based, and has powerful positions within many UK cities. The company acquired the Midlands-based Thoroughgood in the 1930s. Expansion since 1945 has given the company national reach, although the chain is not as well-represented in Scotland as Tesco, and Morrisons (as Safeway dominated Scotland before being taken over by them). This is partly due to Sainsbury's having lost out to Tesco in the bidding war for William Low in the 1990s.
Supermarkets
On 29 September 2010, Sainsbury's opened one of its largest UK shops, an extension of its existing shop in Crayford, South East London, which now has over 100,000 sq ft (9,300 m2) of retail space and is its largest supermarket to be built in the UK. Bybrook in Ashford Kent, which opened on 16 November 2011 has over 100,000 sq ft (9,300 m2).
The refurbished Lincoln, Lincolnshire shop opened on 24 November 2010 making it the UK's second largest Sainsbury's supermarket after Crayford at 98,712 sq ft (9,170.6 m2).
Shops in the 'supermarket' category all have similar layouts and operations but may vary in their offering to the customer. Most will have a convenience kiosk, produce, meat, fish, groceries and frozen food, and manned and self-service checkouts. However depending on the size of the shop they may also have an in-shop bakery, butcher, fishmonger, delicatessen and pizza counters, a cafe, TU clothing, general merchandise, petrol station and online picking department. Some shops also feature a Jessops, Specsavers, Gourmet Sushi and/or an Argos concession. Others also feature a "Centre for Dentistry" where dental treatments are offered and/or an "Explore Learning" centre where children are offered extra English and maths tuition. Some shops also feature a Starbucks Coffee instead of an in-shop cafe.
Sainsbury's Fuel
Sainsbury's operates a chain of fuel forecourts located at its supermarkets selling diesel, petrol and CityPetrol. The chain first opened a forecourt in 1974 at its Croydon SavaCentre hypermarket, the forecourts were initially supplied by and marketed as Jet stations. However, from 1980 onwards Sainsbury's operated its own forecourts and sourced its own fuel. In 2004 BP became the supplier of fuel and operated its forecourts at supermarkets where possible. This deal ended in 2009 and operation of all forecourts and fuel sourcing returned to the control of Sainsbury's.
Sainsbury's Café
Sainsbury's operate cafes, marketed as Sainsbury's Café, in many of its supermarkets which are open for almost as long as the shops are open.
Sainsbury's Local
As well as developing its own sites, Sainsbury's expanded its convenience portfolio through acquisitions of Bell's Stores, Jackson's Stores, JB Beaumont and SL Shaw Ltd. Sainsbury's initially retained the strong Bells, Jacksons and Beaumont branding. For example, refurbished shops were called Sainsbury's at Bells. These were effectively Sainsbury's Local shops with a revised fascia, retaining some features of the former local chain. Unrefurbished shops retained the original brand and logo, but still offered Sainsbury's own brand products, pricing and some point of sale, without accepting Nectar cards. The old websites were also retained with some Sainsbury's branding. However all of these acquired shops were fully converted to the Local fascia from 4 May 2007.
In July 2013, chief executive Justin King announced plans to focus on expanding its convenience shops to surpass the number of its supermarket properties by 2014.
Sainsbury's Online
Sainsbury's operates an internet shopping service branded as "Sainsbury's Online". To use this service customers choose their grocery items online, or by phone (which includes a "phone order" fee). Sainsbury's also provide the Sainsbury's Gift Cards and Sainsbury's Business Direct transactional websites that sell gift cards, gift vouchers and food tokens with credit or value that can be spent at any Sainsbury shop. Both products are not valid for buying certain products or services. The Gift Card website promotes the card as an ideal gift due to the large range of products and the number of shops available to spend them in. The Business Direct website, operated by MBL Solutions Ltd, promotes the cards as ideal for rewarding and motivating employees.
Distribution
Sainsbury's supply chain operates from 13 regional distribution centres (RDCs), with two national distribution centres for slower moving goods, and two frozen food facilities. In addition, the depot at Tamworth transships general merchandise to the RDCs.
- Regional distribution centres
- Basingstoke, Hampshire
- Belfast, Northern Ireland
- Dartford, Kent
- Emerald Park, Emerson's Green, Bristol
- Greenford, Middlesex
- Vauxhall, Nine Elms (London SW8)
- Hams Hall, Coleshill, West Midlands
- Haydock, St Helens, Merseyside
- Langlands Park, East Kilbride, South Lanarkshire
- Northampton, Northamptonshire
- Sherburn, North Yorkshire
- St Albans, Hertfordshire
- Waltham Point, Essex
- Regional distribution centres - Slow Moving
- Rye Park, Hertfordshire
- Stoke, Staffordshire
- Tamworth, Staffordshire
- Regional distribution centres - Frozen
- Elstree, Hertfordshire
- Stone, Staffordshire
- National Distribution Centre - General Merchandise
- Daventry, Northamptonshire
- Shire Park, Worcestershire
- National Distribution Centre - Clothing
- Bedford, Bedfordshire
A planned regional distribution centre (RDC) in Exeter was abandoned, and the land sold to Lidl.
Subsidiaries
Sainsbury's Bank
In 1997 Sainsbury's Bank was established - a joint venture between J Sainsbury plc and the Bank of Scotland, later a part of the Lloyds Banking Group. Services offered include car, life, home, pet and travel insurance as well as health cover, loans, credit cards, savings accounts and Individual Savings Accounts. On 8 May 2013, Sainsbury's announced it would buy the 50% share in the business owned by Lloyds Banking Group.
Sainsbury's Energy
Founded in 2011, Sainsbury's Energy is a virtual utility provider in partnership with British Gas who offer gas and electricity. Sainsbury's no longer have face-to-face salespersons in-shop but there are leaflets and posters etc. advertising Sainsbury's Energy in its supermarkets. Customers no longer receive Nectar points from using the service but promotions from selected companies including Argos.
Former formats and ventures
- Sainsbury's Freezer Centres
Sainsbury's Freezer Centres were a frozen food chain operated between 1974 and 1986, the shops were entirely dedicated to frozen food. Due to competition from specialist frozen food chains such as Bejam, Sainsbury's converted its original service shops that were too small for modern use to small frozen specialist shops. Despite initial difficulty as only 11% of the population owned a freezer, the chain expanded to 21 shops at its height. As freezers became more popular, frozen food departments were designed into Sainsbury's main supermarkets, and the chain was sold to Bejam in 1986, who were ultimately sold to Iceland in 1989.
- Sainsbury's SavaCentre
SavaCentre was a chain of 13 hypermarkets and 7 discount supermarkets operated between 1977 and 2005, initially in a joint venture with BHS. The shops ranged in size between 66,000 sq ft (6,100 m2) and 117,000 sq ft (10,900 m2), and the discount supermarkets between 31,000 sq ft (2,900 m2) and 70,000 sq ft (6,500 m2). At the time of its inception it was the only dedicated hypermarket chain in the UK. Store layout consisted of a 50:50 split between food and non-food shopping, with a complete range of both retailers' products, and later included input from Habitat and Mothercare as they merged with BHS. Some shops also included features such as a petrol station and in-shop cafe. In 1989 Sainsbury's bought out BHS's half stake, but still allowed BHS to retail from SavaCentres until they offered its own clothing and merchandise offering.
- Sainsbury's Calais Wine Shop
Sainsbury's operated one alcohol hypermarket in partnership with Auchan in Calais, France for the lucrative UK booze cruise market. The shop closed in 2010 after describing the operation as 'economically unviable'.
- Sainsbury's Market
In 2002 Sainsbury's opened an experimental shop in the Bluebird Building in Chelsea, London. The concept of the 'Market' shop was to provide a large range of fresh meat, fish, delicatessen items and bread through colleagues serving over counters. Colleagues were specially hired for their skill and passion for their roles in-shop. The layout also provided a larger than usual area for retailing fresh produce. The shop closed in 2004 after poor results. A second, much larger version in Pimlico was designated as a 'Market' shop, but the shop's branding and layout was gradually reverted to a standard Sainsbury's shop.
- Fresh Kitchen
In 2011 Sainsbury's opened a trial food to go shop in Fleet Street London selling sandwiches, baguettes and hot snacks in an effort to expand its business into new areas of opportunity. The shop closed a year later, after the shop's lease was not renewed. Sainsbury's commented that footfall was too high to offer high standards of quality and service however it was not ruling out performing another trial in another location, explaining that it had learnt a lot.
- Mobile by Sainsbury's
Sainsbury's operated a virtual mobile network from 2001 until 2003 which closed due to being commercially unsustainable. In 2013 Sainsbury's re-entered the UK telecommunications industry when it launched a mobile phone network called Mobile by Sainsbury's. The virtual network was operated in partnership with Vodafone. The network was promoted heavily in-shop and most supermarkets started retailing SIM cards and handsets for the network. However, in 2015 Sainsbury's announced that the service would be closing in January 2016 after a breakdown in the relationship with its provider Vodafone.
- Sainsbury's Compare and Save
Sainsbury's Compare and Save was a comparison and switching service website that promoted a wide range of television, broadband and telephone deals from a variety of providers. The service, free to Sainsbury's customers, claimed to list 15,000 different packages. The website and service launched in 2008 and was operated by SimplifyDigital.
- Sainsbury's Pharmacy
Sainsbury's operated 270 pharmacies within its supermarkets. Sainsbury's was also a provider of outpatient hospital pharmacy services, operating pharmacies at three major UK hospitals: Guy's Hospital, St Thomas' Hospital and James Cook University Hospital. In July 2015 Sainsbury's announced they were selling their 281 pharmacies to Lloydspharmacy for £125 million in 2016 with all 2500 pharmacy employees being transferred over and new rent agreements being made.
- Sainsbury's Entertainment
Sainsbury's Entertainment was a transactional website which provided films as downloads or for streaming, using Rovi Corporation software. The site arranged to register with ATVOD as a video on demand service. The website also sold MP3 downloads as well as eBooks through aNobii. The site began operating in 2010 and until March 2014 also sold physical products including DVDs, CDs, Blu-ray discs and books. These were posted to the customer by a distributor, which after 2011 was Sainsbury's subsidiary company: Global Media Vault Ltd. Customers received nectar points from shopping at Sainsbury's Entertainment. Sainsbury's announced in September 2016 that it would close the business on 30 November 2016.
Product ranges
A large shop typically stocks around 30,000 lines of which around 20% are "own-label" goods. These own-brand lines include:
Former ranges
Marketing and branding
Shop fascias
Since 1869 Sainsbury's used various fascias using the title 'J Sainsbury'. This was replaced in 1999 by simply: 'Sainsbury's'. The flagship supermarket in Greenwich, South London, first trialled the new look, leading to the term 'Greenwich Blue', which was used to describe the signature colour of new identity. After its success most supermarkets were refurbished with dark blue walls, bright orange wall panels and grey shelving, as well as new checkouts. Individual counters also had different, brightly coloured panels behind them. Gradually the format was rolled out across the entire Sainsbury's estate. The 'Greenwich Blue' look has been phased out and new supermarkets now have a fresher look. Old external signage bearing the 'J Sainsbury' name was still to be found in use as recently as summer 2011 in Swindon, Ashbourne in Derbyshire and Blackheath, West Midlands.
Nectar loyalty card
Sainsbury's was a founding member of the UK's largest retail loyalty scheme called 'Nectar' in 2002. The scheme allows customers to earn points on almost everything bought from Sainsbury's as well as from other participating retailers in return for a large range of rewards. For every pound spent the customer earns 1 point - a reward equivalent to 0.5% of supermarket purchases. Since 2015 Sainsbury's no longer offers 1 bonus point for every carrier bag the customers reuses.
From April 2015, Sainsbury's halved the number of points that customers earned for every pound, to one point per pound. Sainsbury's previously operated Sainsbury's Reward Scheme between 1995 and 2002 where customers used 'Reward Cards' or 'Storecards' to earn and spend points in a similar way, but limited to Sainsbury's businesses.
On 1 February 2018 Sainsbury's announced that it had acquired all assets, colleagues, systems and licences required for the full and independent operation of the Nectar loyalty programme in the UK through the acquisition of the shares of Aimia Inc's UK business for £60m.
Sainsbury's Active Kids
Until 2017, Sainsbury's ran an annual voucher scheme for local organisations to redeem against equipment for sports and other activities. Customers earned vouchers from their shopping which they donated to an organisation of their choice, who then redeemed the vouchers with Sainsbury's, crediting their account with points to spend on items from a catalogue.
Brand match
In 2011 Sainsbury's introduced brand match. It matched prices of competitors. In March 2014 it stopped matching prices in Tesco. . In August 2015 it rolled out the match pricing online. In April 2016 it stopped the brand match completely allowing customers to use the vouchers for two weeks after the offer closed. Tesco took Sainsbury's brand match vouchers for two months after the offer finished.
Brand ambassadors
2000-2011, Jamie Oliver was the public face of Sainsbury's, appearing on television and radio advertisements and in-shop promotional material. The deal earned him an estimated £1.2 million every year. In the first two years of these advertisements were estimated to have given Sainsbury's an extra £1 billion of sales or £200 million gross profit.
2010-2017, paralympic swimmer Ellie Simmonds was a Sainsbury's Active Kids ambassador.
2012-2014, former footballer David Beckham was a Sainsbury's Active Kids ambassador, in a deal that was claimed to be worth over £3.5 million.
Slogans
Sainsbury's currently uses the "Live Well For Less" slogan which was launched on 15 September 2011. Over the years, Sainsbury's has used many slogans:
- "Quality perfect, Prices Lower" The slogan used on the shop-front of the Islington shop in 1882.
- "Sainsbury's For Quality, Sainsbury's For Value"- Used in 1918 above the Drury Lane shop.
- "Sainsbury's. Essentials for the Essentials."
- "Good Food Costs Less At Sainsbury's" -- Used from the 1960s to the 1990s. Described by BBC News as "probably the best-known advertising slogan in retailing."
- "Sainsbury's - Everyone's Favourite Ingredient" -- Used in a series of TV commercials in the 1990s which featured celebrities cooking Sainsbury's food.
- "Fresh food, fresh ideas. Eat healthy" - Used in 1998.
- "Value to shout about" -- A 1998/1999 campaign fronted by John Cleese which was widely claimed to have been a major mistake. Sainsbury's said it actually depressed sales. However, the company had been losing sales for years because of the rise of Tesco.
- "Making Life Taste Better" Introduced 1999 and used until May 2005.
- "Try something new today" Introduced in September 2005 until September 2011.
- "Value where it matters" Used in advertising from late 2010 until May 2011.
- "Clothes You Can't Wait To Wear" Used in all new advertising for TU Clothing as part of advertising campaign throughout May 2011.
- "Live Well For Less". Introduced in September 2011 following an 18-month business review.
- "Christmas is for Sharing" Used for all Sainsburys' Christmas adverts from 2013 to present.
- "Here's to Extraordinary". Used only throughout 2012 to promote sponsorship of the London 2012 Paralympic Games.
Sainsbury's was a sponsor of the Paralympic Summer Games in London 2012, and it was the largest sponsorship signing in the history of the Games.
Staffing
In 2013, Sainsbury's won the Employer of the Year at the Oracle Retail Week Awards.
In 2010, Sainsbury's opened seven food colleges that teach fishmongery, butchery, breadmaking and confectioning. 21,000 colleagues have been trained at these venues so far. Qualifications can be gained through in house training, and so far 15,400 colleagues have been awarded City and Guild qualifications.
Our Sainsbury's is a social and information website for colleagues to use to access colleague benefits and information, and to interact with other colleagues.
Sainsbury's graduate scheme called '2020 Leaders' aims to recruit and develop potential leaders for the most senior roles of the company.
Employee relations
- Great Place to Work Group
Each supermarket or group of conveniences shops elects a group of 'representatives' from across their shop or region to meet once a month to discuss the working life of their branch and the company. The meetings can include communication from Head Office, the chance to organise charity or local events and the opportunity for employee's to discuss issues and feedback or question the attending Store Manager. The group controls a budget for donating to local charities and a budget for investing in employee facilities. The group was previously known as the 'Colleague Council', a separate version for young employees was called 'Youth Forum' and another separate group called 'SSA Council' existed to organise events in shops. A change in 2014 combined all three into 'Great Place To Work Groups'. The shop groups are part of a national structure, meeting monthly at shops and depots, then monthly at a regional level and then finally at a national meeting less frequently. The shop level is chaired by Store Managers, regional level by a Store Manager and Regional Operations Manager and nationally by the Groups HR Director.
- Sainsbury's Staff Association
Sainsbury's Staff Association was founded in 1947. It is owned and run by the colleagues of Sainsbury's. Any permanent colleague can join at a cost of £1 every 28 days for one person (or £1.20 every 28 days for two people). The funds raised are collected into accounts in every shop, and spent on whatever the shops SSA colleagues wish, usually social events and experiences out of shop. Benefits also include further discounts with other retailers.
- Sainsbury's Veterans Association
Sainsbury's Veterans Association was started in 1947 by 8 colleagues who wished all colleagues to stay in touch with each other. Today members enjoy a range of benefits including Honorary SSA membership, 10% discount, newsletters, invitation to an annual reunion, a visitor service, birthday and anniversary gifts, donation upon bereavement and transfer of benefits to spouse upon death. To qualify colleagues have to serve twenty-five years with the company. The association's presidents are former Sainsbury's CEO and later Chairman Lord Sainsbury of Preston Candover KG and former Sainsbury's CEO Dino Adriano.
Controversies
Price fixing
In 2007 Sainsburys was fined for its involvement in a dairy price-fixing cartel along with other large retailers and processors.
Tax avoidance
A number of companies including Sainsbury's used a scheme to avoid VAT by forcing customers paying by card to unknowingly pay a 2.5% 'card transaction fee', though the total charged to the customer remained the same. Such schemes came to light after HMRC litigated against Debenhams over the scheme during 2005.
Online only recruitment
In November 2007, Sainsbury's became the first major British employer to introduce an "internet only" staff recruitment system. At the time, it was estimated that the move would save the company £4 million a year in administration costs. This move came at a time when approximately half of the British adult population was estimated to have access to the internet at home, though by 2010 it was estimated that more than 80% of the adult population had internet access.
Treatment of overseas workers
In a 2006 report the British anti-poverty charity War on Want criticised the conditions faced by Kenyan workers supplying Sainsbury's with cut flowers.
Food safety prosecutions
Sainsbury's supermarkets have been prosecuted, on more than one occasion, for selling food past its use by date. Evidence also showed that some staff were not correctly trained to carry out their duties involving food safety.
Removal of kosher products
In 2014, a photograph surfaced on Twitter showing that the Holborn Sainsbury's franchise responded to anti-Semitic threats by removing kosher products from its shelves. Complaints began appearing on social media that removing food that is consistent with Jewish dietary restrictions and is produced all over the world was an act of discrimination against Jews. In response to the negative publicity, the kosher products were restored to the shelves and the staffer who removed them was reprimanded. However, in a call by i24news correspondent Jonathan Sacerdoti to the Sainsbury's Careline, the Sainsbury's representative defended the shop's actions, calling them prudent in the face of threatened obstruction to the shop.
Singhsbury's shop
In 2012 Jel Singh Nagra a shop keeper from North Tyneside was threatened with legal action from Sainsbury's after he named his shop Singhsbury's. It complained about the logo design and the name. Several Singhsbury's are run around the country but none received a threat. Nagra changed the shop name to Morrisinghs. Morrisons wished him well.
Environmental/Ethical issues
In May 2017 Sainsbury's was criticised, including by organisations such as Oxfam for dropping its Fairtrade label from tea. Oxfam said it was very unclear as to how Sainsbury's own standards would be higher than those of Marque's. The MD of Divine Chocolate, an ethical trading company part-owned by tens of thousands of cocoa farmers in Ghana said that this move was tipping the balance back in favour of the retailers.
In January 2018 customers questioned the need to cover coconuts with a plastic film forcing CEO Mike Coupe to state that he would be investigating the issue.
Inequality in pricing
In January 2018, Sainsbury's were found to be charging 50p more for a Valentine's Day card for husbands than for wives.
Bristol Rovers F.C. v Sainsbury's
Sainsbury's won a bidding process in March 2012 and agreed on a £30m deal to buy Bristol Rovers F.C.'s 12,000-capacity Memorial Stadium in north Bristol, lease it back for a peppercorn rent until the new ground was ready and then redevelop the old stadium as a new shop. The club hoped the money from the sale would largely finance a new UWE Stadium.
However Sainsbury's ended up locked in a legal battle with Bristol Rovers after the chain pulled out of the deal. Sainsbury's argued at the High Court in London that it was legally entitled to terminate the contract because conditions linked to the agreement had not been satisfied. Lawyers for the club said that either the contract "is still on foot" or Sainsbury's had breached it.
It was claimed in court that Sainsbury's had been looking for a way out of the deal for nearly two years. David Matthias QC, speaking for the club, said the proposed Sainsbury's supermarket had become "less financially viable" amid a difficult trading climate. He said Sainsbury's saw the restrictions on delivery times as an opportunity to get out of the contract and "did nothing" from January 2014 to challenge the restrictions and get suitable planning permission. The club successfully made its own application to lift the restrictions in December that year.
Sainsbury's won its High Court battle after judge Mrs. Justice Proudman ruled that "Sainsbury's must succeed" because the construction of a schedule to the agreement "seems like an insuperable barrier" to the club winning the case.
In a statement, Rovers accused Sainsbury's of breaking its promises. It described the decision as a 'kick in the teeth' for the people of Bristol. The club claimed that it was "abundantly clear throughout the case that Sainsbury's reneged on its promises to the local community to invest in the region and showed a flagrant disregard for the terms of the contract."
Archive
Sainsbury's archive of over 16,000 items relating to the business since its foundation is now kept at the Museum of London. The archive is particularly rich in the product packaging, advertising and retail shop areas.
See also
- List of supermarket chains in the United Kingdom
- Sainsbury
- Sainsbury family
References
External links
- Sainsbury's
- Sainsburys Key Contacts
- Sainsbury's Entertainment
Source of article : Wikipedia
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