Sainsbury's Case Study Home Page

Index for the answers to Sainsbury's's frequently asked questions.

Sainsbury's

The information about Sainsbury's on Biz/ed has been prepared especially for our site. Follow the links below to find the answers to Frequently Asked Questions (FAQs) of Sainsbury's.

Operations and Production

The Business

Finance

Strategy and Policy

Human Resources Management

Marketing

Ideas for Extension Activities

Sainsbury's

What is their field of operation?

Sainsbury's is best known as a supermarket retailer. But it has a series of other activities. Its full list of operations is as follows:

  • Sainsbury's Supermarkets
  • Shaw's Supermarkets Inc
  • Sainsbury's Bank
  • J Sainsbury Developments Ltd (JSD)
  • Sainsbury's Property Company

Index | Previous Question | Next Question

Sainsbury's

What are their main products?

Supermarket/Grocery goods; retail banking services; retail property development services

Index | Previous Question | Next Question

Sainsbury's

What are their main brands?

Sainsbury's believe their brand is seen as representing quality and value for money, as well as high standards of customer service.

But, of course, every supermarket is a reflection not only of its own brand (Sainsbury's, Tesco, Safeway, Asda and so on), but also of the brands that it sells within the shop. Walk around any supermarket and you'll see some of the best-known brand names in food and drink. These are usually owned by large food manufacturers; for instance, the following brands are owned by Nestlé: Buitoni, Libbys, Nescafé, Nesquik, Shreddies, KitKat, Vittel and Perrier.

Sainsbury's wants to give display space to popular, high margin brands; and the producers of these brands want to be associated with Sainsbury's and will compete with each other for the 'best' space within stores.

The company also wants to form partnerships with other non-competing High Street brands. They introduced Boots health and beauty and pharmacy shops in a number of out-of-town stores in 2002. The 'Nectar' loyalty card links the Sainsbury brand with that of Debenhams, BP and Barclaycard. This is no accident; these companies see themselves benefiting from being associated with each other. Some observers have been critical though, believing that it is unethical for major corporations to gather data on their customers through what is regarded as a 'reward scheme'. For more Biz/ed material on the ethics of data storing/mining, go to: http://www.bized.co.uk/timeweb

Sainsbury's name has been used in developing the company's own-brand products. This approach has been applied to other product lines, such as economy goods and organic products. The Sainsbury brand name has also been used to gain leverage for the business to diversify into the retail banking market - a move which has since been copied by Tesco.

Index | Previous Question | Next Question

Sainsbury's

Where is their head office?

J Sainsbury plc
33 Holborn
London
EC1 N2HT

Index | Previous Question | Next Question

Sainsbury's

When did the company start?

Sainsbury's Supermarkets was established in 1869 by John James and Mary Ann Sainsbury and is Britain's longest-standing major food retailing chain.

Index | Previous Question | Next Question

Sainsbury's

Who are its shareholders?

In 2002 private individuals held just over 42% of Sainsbury's shares; banks and nominees held over 56% of shares; pension funds, insurance companies and investment trusts held less than 2% of shares.

Index | Previous Question | Next Question

Sainsbury's

What is the company structure?

J Sainsbury PLC is the parent organisation controlling these operating companies: Sainsbury's Supermarkets; Shaw's Supermarkets; Sainsbury's Bank; JS Developments, and Sainsbury's Property Company.

Index | Previous Question | Next Question

Sainsbury's

What is its mission statement?

"Our mission is to be the consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working 'faster, simpler and together."

Source: Sainsbury Web site

Index | Previous Question | Next Question

Sainsbury's

Who are their major competitors?

  • In the supermarket business Sainsbury's main competitors are Tesco, Asda and Safeway.
  • In retail banking the main competition comes from Tesco Financial Services, M & S Financial Services, the traditional high street banks, Egg, Halifax and Abbey National mortgages.
  • Shaw's are located in New England and in that part of the US retail market competition is provided by Ahold's Stop and Shop and Hannford's Stop and Save.

Index | Previous Question | Next Question

Sainsbury's

A look at a key feature of Sainsbury's business

One core aspect of Sainsbury's activities is its focus on customer/market segmentation. Sainsbury's divide their customer base into 10 separate segments. Customer intelligence is gathered through analysis of Nectar Card (formerly Reward Card) purchases. This information is used to tailor what Sainsbury's offers in terms of goods and services to an appropriate market segment. Sainsbury's tries to do this by having stores that are differentiated, reflecting the variety of market places that they occupy.

In order to make the most of their 463 stores, these are classified according to three different formats:

  • 275 stores are classified as 'Main Mission' outlets. This means they concentrate on providing for the weekly family shop. These stores vary in size between 20 000 and 48 000 square feet
  • 64 stores are in the 'Main Plus' format. These are the very large supermarkets (otherwise known as hypermarkets). They occupy in excess of 45 000 square feet area and focus on a wider range of food products as well as more non-food items
  • The remaining 124 stores are in the 'Mixed Mission' format. They include Sainsbury's Central (which range from 7000 and 20 000 square feet) and Local stores (ranging from between 2000 and 6000 square feet area)

Index | Previous Question | Next Question

Sainsbury's

Can I have some financial information about the company?

Go to the database (listed as J Sainsbury plc) for financial material.

Index | Previous Question | Next Question

Sainsbury's

What is the company's vision for growth?

"Sainsbury plc's present focus is to improve the performance of the core UK supermarket chain. Whilst doing so we will continue to explore and develop growth opportunities in other markets. Through implementing 'Managing For Value' we will stretch our ambitions and challenge the conventional wisdom within the Company, thereby unlocking our potential and delivering value." Source: Sainsbury Web site

Index | Previous Question | Next Question

Sainsbury's

What is their policy on ensuring best quality product?

Quality food is seen as a priority for Sainsbury's customers.

Sainsbury's have in place quality control at many stages of the food retailing business; in the development of new food products, the company's Food Centre operates a three stage process of quality assurance: Quality Control; Sensory Appraisal; and Development.

In Quality Control, new and re-developed products are sampled by product managers and buyers; in Sensory Appraisal, focus groups are used to find out what consumers think about current and new products; and in Development, the Food Centre is interested in identifying trends in food to produce new recipe ideas.

Index | Previous Question | Next Question

Sainsbury's

What sort of people work for the firm?

Sainsbury's believe that they have a range of employment policies to ensure that their workforce is as representative of the wider community as possible.

Staff often have a choice of work arrangements including: part-time, flexible contracts for retail employees, job share, home working, enhanced maternity leave/pay, paternity leave, career break schemes for childcare, special leave for personal development or caring responsibilities.

The company also has an Equality and Diversity policy, with a Steering Group led by a Board Director to advise the group. Sainsbury's played a lead role in the Business in the Community's 'Race for Opportunity' survey in 2001. There is a Fair Treatment policy for handling grievances and complaints and the company funds an independently-run confidential 24 hour helpline.

On disability issues, Sainsbury's are senior members of the Employers' Forum on Disability. They also support the Learning Consortium, helping talented people with disabilities to move into senior management positions.

Index | Previous Question | Next Question

Sainsbury's

Do they have an equal opportunities policy?

Sainsbury's policy is based on a commitment to:

  • Provide workplaces where all staff feel valued, respected and able to contribute to the business
  • Employ a workforce that recognises the diversity of current and potential customers

Through these pledges Sainsbury's aim that all staff can work without fear of discrimination, harrassment and bullying and that all colleagues, job applicants, customers and suppliers should be treated fairly, regardless of:

  • race, colour, nationality, ethnic origins or community background
  • gender, gender realignment, sexual orientation, marital or family status
  • religious or political beliefs and affiliations
  • disability
  • real or suspected infection with HIV/Aids
  • membership or non-membership of a trade union
  • differing working patterns such as part time
  • age

Index | Previous Question | Next Question

Sainsbury's

How large is their workforce and how is it structured?

Sainsbury's Supermarkets employs over 145,000 people. Of these, 60% are part-time and 40% full-time. 62% of employees are women.

Index | Previous Question | Next Question

Sainsbury's

How are employees motivated?

  • Save-As-You-Earn scheme for supermarket staff offers chance for company shares to be bought at a 20% discount.
  • A profit-sharing scheme allows employees to have shares or cash. Roughly 50% of the company's shares are owned by current or former staff and it is this scheme that is largely responsible.
  • Under a staff discount scheme, employees receive a 10% reduction on products bought from the company.
  • Long service awards are given to staff with 15, 25 or 40 years' service.
  • Also, the company operates performance-related pay and bonus schemes for middle and senior managers.

Index | Previous Question | Next Question

Sainsbury's

What is their brand positioning?

Sainsbury's belief in the strength of their brand has underpinned its purchase of Shaw's Supermarkets in the USA. The company also sees its expansion into financial services and property as gaining 'leverage' in different markets, by using the strength of the 'Sainsbury' brand name and values.

Index | Previous Question | Next Question

Sainsbury's

Can you give me an example of a recent marketing campaign?

A case study (presented as part of the Advertising Effectiveness Awards) argued that Jamie Oliver (the TV chef) has helped the group to generate £1.12bn extra in sales. So has the 'Naked Chef' been a naked success for Sainsbury's? Well according to a review of the advertising campaigns carried out by the supermarket group, the answer is definitely 'yes'. It argues that the £41m spent on the advertising campaign has helped to generate £5 of profit for every pound spent on the campaign. The supermarket group has increased turnover by £2bn over the last two years and the report is attributing over half of this to the advertising campaign. However, critics point to the fact that Sainsbury's have also been spending billions of pounds on upgrading stores and improvements in their distribution and supply chain. They have also opened 4% more selling space over the same time period.

Index | Previous Question | Next Question

Sainsbury's

Can you give me some information about product development?

In supermarket retailing, new products are launched on a regular (often weekly) basis. Usually though, these are modifications of existing products. Sainsbury's, as do many other retailers, develop many new types of food products - Sainsbury's launches about 1,000 each year. The company's main focus for food development is through its Food Centre.

The company has been working to develop more non-food product lines including children's clothes and health and beauty.

Index | Previous Question | Next Question

Sainsbury's

Where Next?

Use the Boston Matrix to analyse the main features of Sainsbury's activities.

Apply Porter's Five Forces to Sainsbury's food retailing operations.

Index | Previous Question | Next Question