Blog: Dean BestSainsbury's looks to an "own-label Christmas"

Dean Best | 13 November 2013

Sainsbury's today (13 November) reported another set of solid results, with its private-label food a factor in higher half-year sales and profits. And chief executive Justin King, talking to reporters this afternoon, said own label will be a key battleground in the coming festive period.

The UK grocer said pre-tax profits for the 28 weeks to 28 September were up 9% and reported its highest share of the UK grocery market for a decade.

The retailer said own-label sales were growing "at over twice the rate" of branded goods. Its By Sainsbury's standard own-label range saw sales increase 6% year-on-year; sales of its more premium Taste the Difference range were up at a "double-digit" rate. Sainsbury's said annual sales of Taste the Difference had reached GBP1bn.

Sainsbury's entry-level Basics range was a fly in the ointment, with sales falling. The retailer is moving to relaunch the range and insisted its recent performance was more a reflection of the recent work on By Sainsbury's than the impact of moves from competitors on their own cut-price own label.

However, Sainsbury's is proud of its own-label ranges - they are, of course, a key part of its battle against Tesco's price comparison scheme - and King said Christmas would be a time when private labels would come to the fore.

"We think it will be an own-label Christmas," King said. "The savvy shopper wants quality but doesn't want to spend any more than is necessary."

And that prediction is, King indicated, based on Sainsbury's view of consumer confidence in the UK.

King acknowledged economic data, including yesterday's news of slowing inflation, was "undoubtedly good news" but he cautioned against drawing conclusions about changes in consumer behaviour.

"The reality for consumers is they're not seeing more money in their pocket," he said. "Consumers are under more pressure than they were 12 months ago."

However, let's round off on a more cheery note. Sainsbury's is set to launch its Christmas ad - and it is rather good.

The retailer has worked with director Kevin Macdonald - the man behind the film Life in a Day - to create an ad based on real footage from over 100 UK families.

A three-and-a-half minute version will air tonight in the UK before a 50-minute film will launch at a London cinema later this month.

Click here to watch the trailer. It will get even the most Scrooge-like among you in a festive mood.

BLOG

Fyffes to face Ethical Trading Initiative disciplinary committee

A year after union officials alleged Fyffes abused workers on plantations in Central America - and called on the produce giant to be kicked out of the Ethical Trading Initiative forum - the company is...

NEWS

Campbell sees further sales decline in H1

Campbell Soup Co. booked a drop in sales and earnings for the first half of its financial year today (17 February), with share losses in the US company's fresh division hurting the group results. ...

BLOG

Could 3G Capital's next move be in foodservice?

Much of the chatter about where 3G Capital could look next has centred on packaged food - but might the private-equity fund be about to extend its foodservice empire?...

BLOG

Safety allegations could tarnish Mead Johnson's reputation

Headlines that Mead Johnson's board has backed Reckitt Benckiser's takeover bid will no doubt overshadow the other news on the group this week – that it is facing a US lawsuit from a “whistle blower” ...

BLOG

The list of UK's top five grocers has a new member

Kantar Worldpanel issued its monthly supermarket share data in the UK this morning - and the numbers showed a change in the identity of the country's top five food retailers....

just-food homepage



Forgot your password?