AskDefine | Define sainsbury

Extensive Definition

J Sainsbury plc is the parent company of Sainsbury's Supermarkets Ltd, commonly known as Sainsbury's, a chain of supermarkets in the United Kingdom. The group also has interests in property and banking. The group has an estate worth about £8.6 billion (March 2007).
For much of the 20th century Sainsbury's was the market leader in the UK supermarket sector, but in 1995 it lost its place as the UK's largest grocer to Tesco and in 2003 was pushed into third by ASDA. The company's fortunes have improved since the launch of a recovery programme by CEO Justin King in 2004, with it reporting its 12th consecutive quarter of sales growth in January 2008. Despite predictions that Sainsbury's would regain second position, Taylor Nelson Sofres data released in January 2008 shows Sainsbury's market share at 16.4%, behind Asda's share of 16.7%, but ahead of Morrison's at 11.22%. On 14 May 2008, Sainsbury's announced that profits for the year ending March 2008 were up 28% on the previous year, with sales up 3.9% for the same period.


Sainsbury's was established as a partnership in 1869 when John James Sainsbury and his wife Mary Ann opened a store at 173 Drury Lane in Holborn, London. In 1922 J Sainsbury was incorporated as a private company. The first self-service branch opened in Croydon in 1950. In 1973 the company was floated as J Sainsbury plc in what 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. Today the family retains at least 14% of the shares.
In 1975, Sainsbury's launched the "Sainsbury's SavaCentre" hypermarket format as a joint venture with Bhs. This was the first attempt to launch supermarkets with a large non-food range in the UK. Savacentre became a wholly owned Sainsbury's subsidiary in 1989. As the hypermarket format became more mainstream, with rivals such as ASDA and Tesco launching ever-larger stores, it was decided that a separate brand was no longer needed and the stores were converted to the regular Sainsbury's superstore format in 1999. This is in direct contrast to rival firms Tesco and ASDA, which have been rapidly expanding their Tesco Extra and ASDA Wal-Mart Supercentre hypermarket formats in recent years.
Sainsbury's founded the Homebase DIY chain in 1979. Homebase was tripled in size in 1995 with the acquisition of the rival Texas Homecare from the Ladbroke Group plc. Sainsbury's sold the Homebase chain in December 2000 in a twofold deal worth £969 million. Sales of the chain of stores to venture capitalist Schroder Ventures generated £750 million and sale of 28 development sites, which had been earmarked for future Homebase stores, were sold for £219 million to rival B&Q's parent company, Kingfisher plc. At the time, the chain had 13% of the UK market, behind B&Q and Focus Do It All.
The last counter service branch closed in 1982. In November 1983 Sainsbury's purchased 21% of Shaw's Supermarkets, the second largest grocery group in the north-east United States. In June of 1987, Sainsbury's acquired a controlling interest. Despite good performance by Shaw's, Sainsbury's sold the group on 30 April 2004.
In 1992 the long-time CEO John Sainsbury retired and was replaced by his cousin, David Sainsbury. In 2004 The Times quoted a former executive and others who view this event as the start of the company's downturn due to management failures of David Sainsbury and his successors, Dino Adriano and Peter Davis. Mistakes cited include David Sainsbury's famous dismissal of Tesco's loyalty card, the reluctance to move into non-food retailing, the indecision between Sainsbury's quality/price position, "the sometimes brutal treatment of suppliers" which led to suppliers favouring Tesco over Sainsbury's and the unsuccessful John Cleese advertising campaign.
Sainsbury's expanded its operation into Scotland with a store in Darnley opening 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 stores. 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 January 2008 Sainsbury's brought its number of Northern Ireland supermarkets to 11 with the purchase of two Curley's Supermarkets, which includes those store's petrol stations and off licences.
In March 1997 Sainsbury's Supermarkets Ltd. was established as a separate subsidiary of the group.
In June 1999 Sainsbury's unveiled its new corporate identity, which was developed by M&C Saatchi, which comprised of the current company logo (right), new corporate colours of "living orange" and blue, Interstate as the company's general use font, the new slogan "Making life taste better", which replaced their 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." 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 100 stores and 2,000 employees. However poor profitability led to the sale of this share in 2001. On 8 October 1999 the CEO Dino Adriano lost control of the core UK supermarket business, instead assuming responsibility for the rest of the group. David Bremner became head of the UK supermarkets. 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. In his first two years he raised profits above targets, however by 2004 the group had suffered a decline in performance relative to its competitors and was demoted to third in the UK grocery market. Davis also oversaw an almost £3 billion upgrade of stores, distribution and IT equipment, 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 12 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 25 year lease when Accenture pulled out.
Sainsbury's is a founding member of the Nectar loyalty card scheme, which was launched in late 2002 in conjunction with Debenhams, Barclaycard and BP. The Nectar scheme replaced the Sainsbury's Reward Card; accrued points were transferred over. The loyalty scheme is run by a 3rd party company - Loyalty Management UK or LMUK as often abbreviated, collating information on behalf of the partner sponsors.
In 2003 Wm Morrison Supermarkets 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 53 of the combined group's stores. In May 2004 Sainsbury's announced that it would acquire 14 of these stores, 13 Safeway stores and 1 Morrison's outlet located primarily in the Midlands and the North of England. The first of these new stores opened in August 2004.
At the end of March 2004 Davis was promoted to chairman and was replaced as CEO by Justin King. 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 £2m despite poor company performance. On 19 July 2004 Davis' replacement, Philip Hampton, was appointed as chairman. Hampton has previously worked for British Steel, British Gas, BT and Lloyds TSB.

2004 onwards: Justin King

Justin King joined Sainsbury's 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 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 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.
Sainsbury's sold its American subsidiary, Shaw's, to Albertsons in 2004. Also in 2004 Sainsbury's expanded its share of the convenience store market through acquisitions. Bell's Stores, a 54 store chain based in north-east England was acquired in February 2004. Jackson's Stores, a chain of 114 stores based in Yorkshire and the North Midlands, was purchased in August 2004. JB Beaumont, a chain of 6 stores in the East Midlands was acquired in November 2004. SL Shaw Ltd, which owned six stores was acquired on 28 April 2005 for £6 million. On 29 September 2004, Sainsbury's established Sainsbury's Convenience Stores Ltd. to manage its Sainsbury's Local stores and the Bells and Jacksons chains. The latter two are to be rebranded as Sainsbury's Local by March 2008.
Since the launch of King's recovery programme, the company has reported twelve consecutive quarters of sales growth, most recently in January 2008. More recent sales improvements have been put down to price cuts and the company's focus on fresh and healthy food.
On 4 October 2007 Sainsbury's announced plans to relocate its Store 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.
According to Taylor Nelson Sofres rankings published in January 2008, Sainsbury's market share was 16.4% compared to Tesco's 31.5%, ASDA's 16.7% and Morrison's 11.4%.

Takeover bid: one

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 and Lord (John) Sainsbury) the offer was rejected.
On 25 April Delta Two, a Qatari investment company, bought a 14% stake in Sainsbury's causing its share price to rise 7.17%. Three's interest in Sainsbury's is thought to centre on its property portfolio. They increased their stake to 25% in June 2007.

Post takeover bid

On 16 May 2007 Sainsbury's announced underlying profits for the year ending on 24 March (before pension and interest charge benefits) rose by 42.3% to £380 million. Revenue rose 6.9% to £18.52 billion. King announced the company was ahead of its target to raise revenue by £2.5 billion by 2008 and that a new three year £3.5 billion sales target was being adopted. 66% of these sales are to come from grocery and 33% from nonfood (e.g clothing and entertainment). Other plans include the refurbishment or extension of half of the company's stores. On 18 July BBC News reported that Delta Two had tabled a conditional bid proposal. 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. Following the withdrawal of the interest of the QIA, shares in Sainsbury's dropped around 20% (115p) to 440p on the day of this announcement (5 November 2007). Delta two have now withdrawn and no takeover bid is expected

Financial performance

  1. denotes 52 weeks
  2. denotes 56 weeks.
  3. "One off operating costs" of £152 million incurred. This includes £63 million to terminate the IT outsourcing contract with Accenture.
  4. £168 million before exceptional costs (cost of "turnaround" plan and write off of excess merchandise etc.)

Store formats

The supermarket chain operates three main store formats; regular Sainsbury's stores, Sainsbury's Local (convenience stores) and Sainsbury's Central (smaller supermarkets in urban locations) stores (Savacentre used to be the larger Sainsbury's supermarkets but was phased out). At the end of its 2005/06 financial year Sainsbury's store portfolio was as follows.
Sainsbury's currently uses NCR Point of Sale equipment operating the Retalix "Storeline" software, replacing the Fujitsu-ICL POS systems used during the 1990s.
Traditionally, Sainsbury's was most present in the areas around London and south-east England. Expansion since 1945 has given the company national reach, although the chain is not as represented in Scotland as other chains such as Tesco, and Morrisons (as Safeway dominated Scotland before being taken over by that company).
Some of Sainsbury's highest-taking stores are Tunbridge Wells, Dome Roundabout in Watford, Hedge End in Southampton,Badger Farm in Winchester, Ladbroke Grove, Merton and New Cross Gate (all in London).

Convenience stores

Most of the major chains: Sainsbury's, Tesco, Marks and Spencer, Somerfield and The Co-operative operate convenience stores; as of 2008, Asda and Morrisons do not have presence in this area of the market.
As well as its own Local and Central stores Sainsbury's has expanded through acquisition of existing chains (Bell's Stores, Jackson's Stores, JB Beaumont, and SL Shaw Ltd). Sainsbury's initially retained the strong Bells and Jacksons brands. For example, refurbished stores were called Sainsbury's at Bells or Sainsbury's at Jacksons. These were effectively Sainsbury's Local stores with a revised facia, retaining some features of the former local chain. Unrefurbished stores 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. This was an experimental format and on 4 May 2007 it was announced that all stores would be rebranded as Sainsbury's Local, with the management teams of the smaller stores integrated into Sainsbury's own teams.


Sainsbury's supply chain operates from ten regional distribution centres (RDCs), with two national distribution centres for slower moving goods at Stoke and Rye Park, and two frozen food facilities, at Elstree and Stone. In addition, the depot at Rugby tranships floral and general mechandise to the RDCs, and Pindar Road depot tranships merchandising units.:
Sainsbury's also has a depot called Buntingford. This depot is closed, however Sainsbury's still own the site and continue to use the depot at busy times generally Christmas when Waltham Point gets very busy. Buntingford is not used for the rest of the year and is an emergency back-up depot.
Originally Sainsbury's ran its own distribution network. However after an industrial dispute with their drivers in the 1970s, and with the intention of streamlining and consolidation, much of the distribution is now contracted out - to distribution specialists such as TDG, DHL/Exel Distribution and NFT.
Sainsburys drivers are employed on flexi-contracts. The staff split is 20% Agency Staff and 80% Sainsbury's staff.

Online service

Sainsbury's operates an internet shopping service branded as "Sainsbury's Online". To use this service customers choose their grocery items online. Pickers then collect the required items which are delivered to customers from a local store by van. This is available to about 75% of the UK population. The service is run from larger stores which carry the full product range - over 100 stores operate an Online service.

Product ranges

A large store typically stocks around 50,000 lines of which around 20% are "own-label" goods. These own-brand lines include:
  • Basics: an economy range of around 500 lines, mainly food but also including other areas including toiletries and stationery. The Basics range uses minimal packaging with simple orange and white designs, to keep the price as low as possible. Equivalent to Tesco's Value, ASDA's Smart price and Morrison's Value (formerly Bettabuy)
  • Taste the Difference: around 1100 premium food lines, including many processed foods such as ready meals and premium bakery lines. Similar to ASDA's Extra Special, Tesco Finest and Morrison's The Best.
  • Different by Design: a smaller range of premium non-food lines, including flowers which were previously branded "Orlando Hamilton".
  • Kids: these lines are for children. In 2006 these lines replaced the Blue Parrot Café range.
  • Be Good To Yourself: products with reduced calorific and/or fat content.
  • Free From: over 75 product lines. These products are suitable for those allergic to dairy products. (The majority of these are dairy and gluten/wheat free)
  • Sainsbury's Organic (SO Organic): Around 500 lines of food / drink which is not derived from food stuffs treated with fertiliser or pesticides.
  • Fair Trade: Over 100 fair trade products. - All bananas sold at Sainsbury's are now fair trade. The own-brand tea and coffee is being converted to Fairtrade over the next three years.
  • Super NaturalsTM: A range of ready meals with healthy ingredients.
  • TU - own brand clothing range, which replaced the Jeff Banks designed range, Jeff & Co.


Since 2000 Jamie Oliver has been the public face of Sainsbury's, appearing on television and radio advertisements and in-store promotional material. The deal earns him an estimated £1.2 million every year. In the first two years these advertisements are estimated to have given Sainsbury's an extra £1 billion of sales or £200 million gross profit.
Sainsbury's currently uses the "Try something new today" slogan which was launched in an effort to make consumers venture into purchasing more varied goods. The television adverts are also often accompanied by The Polyphonic Spree's Light & Day. Over the years, Sainsbury's has used many slogans:
  • "Quality perfect, Prices Lower" The slogan used on the shopfront of the Islington store in 1882.
  • "Sainsbury's For Quality, Sainsbury's For Value"- Used in 1918 above the Drury Lane store.
  • "Sainsbury's. The Essentials are 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"-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 rival Tesco.
  • "Making Life Taste Better" Introduced 1999 and used until May 2005. Still used on delivery lorries in 2008.
  • "Try something new today" Introduced in September 2005. Replaced on carrier bags, till receipts and all other corporate branding from this point.
In 2008 they have created a shopping incentive by showing you can feed your family with five pounds, it is called "Feed your family on a fiver", the flagship is "Meatballs 'n' More" which has been avertised on the Televison with Jamie Oliver Cooking it.

Sainsbury's Bank

In 1997 Sainsbury's Bank was established - a joint venture between J Sainsbury plc. and the Bank of Scotland (now HBOS). Services offered include car, life, home, pet and travel insurance as well as health cover, loans, credit cards, savings accounts and ISAs.

Sainsbury family

Today there is little family involvement in the company. David Sainsbury's retirement as chairman in 1998 brought to an end 129 years of management of the group by the Sainsbury family. As a government minister since 1998, his shares were held in a blind trust until 2007.
The Sunday Times reported in September 2006 that "The Sainsbury family continues to [sell] shares in the £6.2 billion retailer... and for the first time their combined holding has fallen below 20%." The Qatari royal family of the Gulf Kingdom are now the largest stakeholders with a 25.007% share in the company.
As of January 2007, the reportable interests of the Sainsbury family represent some 13.9% of J Sainsbury's share capital. All the shares above are held by family lawyer and trustee Miss Judith Portrait. This follows Lord Sainsbury of Preston Candover's decision to split his 3.89% holding in Sainsbury's between other members of his family.
The statement by Lord (John) Sainsbury in December 2006 suggests that the family may not have sold as many shares as previously thought. The other theory could be that the most senior members of the family, with previous stakes of over 3% (the reportable stock exchange shareholding threshold), could have simply transferred some of their shares to their children (who previously held few shares), rather than having sold shares onto the open market. However, some shares which have been sold were definitely sold to the open market (according to Miss Judith Portrait).
This fall from around 35% increases the possibility of any takeover attempt succeeding. However a hostile bid for the company may encounter difficulties, without the full support of the Sainsbury family. The halving of the generous dividend yield in recent years, may have been a significant factor regarding the family's decision to reduce their shareholdings.
sainsbury in Welsh: Sainsbury's
sainsbury in German: J Sainsbury
sainsbury in French: Sainsbury's
sainsbury in Simple English: Sainsbury's
Privacy Policy, About Us, Terms and Conditions, Contact Us
Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2
Material from Wikipedia, Wiktionary, Dict
Valid HTML 4.01 Strict, Valid CSS Level 2.1