Sainsbury’s chief executive Justin King today (2 October) insisted he “welcomed” the prospect of rival Morrisons entering the online channel next year and emphasising its fresh food offer.
Morrisons will start home deliveries in January, the last of the UK’s four largest grocers to offer an online service.
Dalton Philips, Morrisons’ CEO, said last month the retailer’s “strong fresh food proposition” could set the new entrant apart from its competitors. “It’s not being offered out there in the market today,” he said.
However, speaking to just-food today after Sainsbury’s reported strong quarterly sales, including a 15% increase in online revenue, King was sanguine about the prospect of more competition online – and stood by the retailer’s own fresh food offer.
“Competition is a good thing; it’s a good thing for customers and it’s a good thing for everyone in the market,” he said. “It will make growth that bit tougher to come by. That’s what competition does. From our point of view, the more people are talking about quality fresh food as the reason for shopping, whether that’s online, in convenience stores or supermarkets is a good thing. If that’s the conversation we are increasingly going to have we are very happy to fight that fight. We think we have got by far the best fresh food, by far the best own brand and we’re happy to stand up our fresh food, our own brand against any competition, Morrisons included.”
The growth in Sainsbury’s online sales in its second quarter was slightly slower than the 16% it posted in the first three months of the financial year. In Sainsbury’s last set of annual results, for the year to 16 March, it said online sales were growing “at around 20%”.
King said the warm weather seen in the UK during the latest quarter had slowed online sales but he was still bullish about Sainsbury’s performance.
“Not quite as racy [but] sunny weather is not conducive to online shopping. You don’t want to be tied to your home at a particular time, you are much more like to buy fresh food and top-up shop. Still a good figure at 15 and still a good market beat,” he said.
The warm weather, King noted, had boosted sales from Sainsbury’s convenience stores.