Sainsbury’s has seen a strong performance in its full year profits for the 12-month period ending 2 March 2024, thanks to a boost in food sales and a “relentless investment in price”.
The supermarket has beaten profit expectations for the year as it delivered pre-tax profits of £701m, up 1.6% on the previous year. As a result, Sainsbury’s has set itself “ambitious guidance” for 2024, predicting between £1.01bn and £1.06bn profit across its retail business.
With grocery sales rising by 9.4% over the period, CEO Simon Roberts described Sainsbury’s food business as “firing on all cylinders”, while also admitting that the grocer has been “relentlessly investing in price”.
He also described the Nectar Prices loyalty scheme as “a game changer for customers”, revealing that it saves them £12 on a typical £80 shop and has been a key part of the strategy which has driven the grocer’s impressive results.
The loyalty programme has gained 5 million new digital customers since Nectar Prices launched last April, setting Sainsbury’s retail media offer, Nectar 360, in good stead for the coming year.
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Sainsbury’s recently made the move to allow advertisers to create ‘branded shop-in-shops’ on its consumer-facing website, using the Nectar360 ecommerce media platform.
The branded shops are designed to increase brand engagement and allow Sainsbury’s to deliver across more areas of its advertising clients’ ecommerce business.
Director of retail strategy at CI&T, Melissa Minkow, believes the grocery retailer’s success can be attributed to its focus on loyalty and quality.
“Sainsbury’s success is down to leaning into loyalty and being careful not to sacrifice quality, while emphasising deals and low prices. This is just as much an art as it is a science,” she said.
“Not only does it require advanced inventory management and strategic vendor relationships, but also highly resonant messaging.”
Minkow added that Sainsbury’s boom in food sales is particularly impressive given the challenging waters the grocery sector is navigating right now.
“Sainsbury’s is demonstrating careful attention to evolving customer needs, with personalised, in-app offers via Nectar Prices offering a premium experience, but rooted in discounts. Grocery is a space where routine drives decisions, so maintaining relevance demands these types of innovation, keeping consumers coming back for more.”
