UK: Sainsbury’s defends product mix as private equity groups highlight non-food
In the face of criticism from private equity groups considering a bid for Sainsbury's, the UK supermarket chain has told just-food that it is unwilling to sacrifice its emphasis on quality food in order to increase its non-food offering.
According to reports that have come to light over the weekend, if private equity firms CVC Capital Partners, KKR and Blackstone succeed in a bid to takeover the UK's third-largest supermarket they would increase its non-food offering in order to grow sales.
According to a report in The Times, sources close to the investment groups have indicated that they believe the mix of goods offered by Sainsbury's needs altering, increasing the range of non-food products available to bring it inline with Tesco and Asda. It has been suggested that the high margins offered by apparel, beauty and homeware products would boost Sainsbury's profits.
However, Sainsbury's told just-food today (5 February) that, while it is looking to gradually increase the non-food range it carries, it is not willing to do so at the detriment of its customers.
"We have spent a lot of time with our customers and they have told us that they want quality food reasonably priced. That is what differentiates us. We addressed the issue of non-food in out 'Make Sainsbury's Great Again' plan, which targeted GBP700m (US$1.37bn) sales growth in non-food," a spokesperson for the chain explained. "To achieve this we are investing in larger stores and expanding existing stores. This takes time. We are not going to strip out grocery to the detriment of out customers."
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