Sainsbury’s, a UK retailing major, has unveiled a strategic update, dubbed “Next Level Sainsbury’s”, aimed at building on the momentum from its successful Food First strategy launched in November 2020. This new strategy is designed to deliver further grocery market share gains, strengthen the Nectar loyalty platform, expand Argos’s offerings, and achieve significant cost savings, all underpinned by a commitment to enhanced returns for shareholders.

The “Next Level Sainsbury’s” strategy, which builds on the foundational success of the Food First strategy, focuses on delivering more of Sainsbury’s food range to customers, enhancing the Nectar loyalty platform with personalized and integrated loyalty experiences, and leveraging Argos’s strengths to grow frequency and spend. Additionally, the strategy includes investing in technology and infrastructure to achieve another £1 billion of structural cost reduction.

Sainsbury’s has made eight commitments to be delivered by March 2027, including food volume growth ahead of the market, profit leverage from sales growth, higher customer satisfaction, £1 billion of cost savings, increased colleague engagement, over £1.6 billion in retail free cash flow, fulfillment of Plan for Better commitments, and a higher return on capital employed.

The company expects retail operating profit growth from the start of the plan, with capital expenditure increasing to between £800 million and £850 million per year over the next three years. This includes a £70 million investment in the Smart Charge Electric Vehicle (EV) charging network. Sainsbury’s forecasts at least £1.6 billion in retail free cash flow over the next three years, with one-off cash costs for cost-saving programs estimated at around £150 million over the same period.

Simon Roberts, Chief Executive of J Sainsbury plc, emphasized the success of the Food First strategy and the company’s commitment to delivering outstanding value, quality food, and great service. The “Next Level Sainsbury’s” strategy aims to make Sainsbury’s the first choice for food, with significant investments in store space reallocation, the Nectar loyalty platform, and Argos’s digital capabilities.

Sainsbury’s plans to open approximately 75 new Sainsbury’s Local convenience stores over the next three years and invest in its Smart Charge ultra-rapid EV charging network. The strategy also focuses on building a world-leading loyalty platform through Nectar, enhancing Argos’s service and efficiency, and achieving £1 billion of structural cost reduction.

By implementing these strategic initiatives, Sainsbury’s aims to deliver enhanced returns for shareholders through a share buyback program and a progressive dividend policy, starting from the next financial year. The company’s strong financial position and cash generation capabilities will support targeted investments, driving growth, efficiency, and higher profits and returns.

  Sainsbury’s, Simon Roberts, United Kingdom