Sainsbury’s groceries online business grew by just under 20 percent, the supermarket chain announced in its latest preliminary results.
This online growth helped the supermarket’s total sales increase by 5.1 percent to £21.4 billion in the 52 weeks to 20 March 2010, up from £20.4 billion the previous year.
Sainsbury’s said in its results that “good sales performance” in “all areas” of its business underpinned its success, and that it now serves more than 19 million customers a week – a million more than last year. Meanwhile, pre-tax profit at the company increased by 17.5 percent to £610 million in the period, up from £519 million the previous year.
“We now reach nearly 90 percent of UK households and through continued improvements in IT, supply chain and store-picking processes, we have achieved record service and product availability metrics,” Sainsbury’s said.
Sainsbury’s expanded its online business last year when it started selling 8,000 non-food products via the internet in July. It is also trialling a ‘click and collect’ service in 10 stores from May 2010, allowing people to order online and collect in-store.
Other IT investments the company has made over the past year include an upgrade to its IT infrastructure to improve stock replenishment, which it said enhanced its ordering flexibility, consequently reducing food waste.
Earlier this year, Sainsbury’s implemented the Spectrum Infrastructure Management solution from IT management software company CA to support its online shopping supply operations. The software is intended to promptly notify the supermarket of any system issues when it comes to online ordering.
Sainsbury’s already uses CA’s system management software NSM solutions, which consolidates alerts from multiple element managers and directs them to the incident management process.
At the end of last month, Sainsbury’s also made a multi-million pound investment in till technology. This includes the implementation of bi-optic scanners, which it said will enable customers to spend around 12 percent less time at the checkouts, and the continued rollout of self checkouts. The self-service tills are also equipped with technology that enables the machines to print double-sided receipts, thus reducing use of paper.
Sainsbury’s said that these cost-saving measures, amongst others, have helped it offset over 75 percent of cost inflation.
Looking ahead, Sainsbury’s plans to extend its customer reach by further developing its online business, in addition to opening new convenience stores. Other areas of focus include growing its non-food products and services, such as Sainsbury’s Bank. Meanwhile, the supermarket plans to extend an upgraded IT system that controls its clothing stock, to process all its non-food items as well.
In terms of physical footprint, after opening 51 new stores last year, Sainsbury’s plans to open another 75 to 100 stores in 2010 and 2011, and more than 100 stores thereafter. The supermarket said that it was “on track” for its target of 15 percent growth in new space, to 2.5 million square feet, in the two years to March 2011.
The supermarket signed a five-year deal with IBM to outsource its supply chain systems last April, and a month later reported that such IT efficiency improvements helped its profits increase by 11 percent.