Sainsbury’s, the UK’s second-largest supermarket chain, has announced plans to maintain its competitive edge by absorbing potential profit impacts to counter aggressive pricing strategies from rivals Asda and Tesco. This move underscores the escalating price competition within the UK grocery sector.
In the fiscal year ending March 1, Sainsbury’s reported a 7.2% increase in underlying retail operating profit, reaching £1.036 billion, and a 3.1% rise in retail sales to £31.6 billion. Despite these gains, the company forecasts flat profits for the upcoming year, anticipating continued investment in price competitiveness
CEO Simon Roberts emphasized the company’s commitment to sustaining its market position, stating, “We are committed, above all else, to sustaining the strong competitive position we have built.” Sainsbury’s strategy includes matching prices with discounter Aldi and offering exclusive deals through its Nectar loyalty program, which now features over 9,000 products .
The supermarket chain also unveiled plans for significant expansion, aiming to open 15 new supermarkets and 25 convenience stores over the next two years. This expansion is expected to bring over 700,000 additional customers within a ten-minute drive of a Sainsbury’s store .
To support these initiatives, Sainsbury’s announced a £200 million share buyback and a special dividend of £250 million, reflecting confidence in its long-term strategy despite short-term profit pressures.
As the UK grocery market faces heightened competition, Sainsbury’s proactive measures aim to reinforce its market share and deliver value to customers amidst the evolving retail landscape.
