Sainsbury’s is to investigate entering India as it looks to emerging markets to expand beyond the UK.
The company’s development director Darren Shapland said yesterday (10 November) the retailer would consider moving into two or three developing markets.
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“India we will come to look at. We are not investing resources in it yet. We will probably look at that and some of the other developing markets,” Shapland said. He added that the company is open to “all possibilities” at the moment.
Shapland said Sainsbury’s has a team of seven staff based in Shanghai investigating the possibility of entering China. “With the expansion going on over there it would be negligent not to do an assessment,” said Shapland.
Shapland said Sainsbury’s has “put people on the ground” to understand the “way consumers live” in the country, while researching suppliers, property and legislation in China.
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However, Shapland, speaking after Sainsbury’s published its half-year results, emphasised the-long term nature of the plans.
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By GlobalDataHe said looking at emerging markets was a “very small part of what I’m doing” and for the next three to five years most of his focus would remain on developing Sainsbury’s online operations and growing its financial division.
“The key thing is to recognise that the UK business has legs for a long period of time,” he said.
The company yesterday (10 November) posted a 37.7% increase in net profit for the first half to GBP347m (US$554.8m), due to a combination of property disposals and rising sales.
Chief executive Justin King said the company was tracking well against its ‘Making Sainsbury’s Great Again’ programme and was “delivering against the commitments made in the fundraising two years ago” to grow space by 15% .
Meanwhile, King said the company would not reach its target to reach 75 convenience stores by the end of the year, due to the quality of property coming onto the market. “We’re focused on quality not quality,” said King. “There’s no need to open stores for the sake of opening them. We’ve shifted some of the capex into store extensions instead”
CFO John Rogers said the company had received 70 consents for store extensions, and that it has a strong property pipeline for the next two to four years.
“We’ve established the foundations over the last couple of years, which is giving us permission to accelerate our growth now,” said King.
Shares in the company 0.19% at 11:15 GMT this morning to 373.9p.
