SAINSBURY

J Sainsbury PLC

J Sainsbury PLC

Introduction

J Sainsbury PLC was founded in 1869 and incorporated in 1922, London. For the past 140 years, the company grew rapidly; today it is one of the “big four”# supermarket chain in UK. It currently sorely operates in UK and employs about 150,000 people. Its cooperation business is composed of four areas, which are supermarkets, online business, property market and banks. The Sainsbury supermarket operates a total of 890 stores comprising 547 supermarkets and 343 convenience stores around the UK. The stores are pride of providing health, safe, fresh and tasty food to its customers. It also jointly owns Sainsbury's bank with Lloyds Banking Group and has two property joint ventures with Land Securities Group PLC and the British Land Company PLC. (Datamonitor 2011: 4)

Its total revenue (excluding the value added tax) in Fiscal Year (FY) #2010 was £19,964 million, which increased 5.6% from the last year. The underlying profits before tax grew to £610 from £519 million. The basic earnings per share increased 93.4% to 32.1 pence from 16.6 pence.

Food retail industry in United Kingdom

In 2009, the value of United Kingdom food retail industry increased by 3.1% to reach $186.1 billion. According to forecast for 2014, the United Kingdom food retail industry has a value of $219.4 billion, and increase of 17.9% since 2009. The compound growth rate of the industry from 2009-2014 is predicted to be 3.4%. (Johnson 2011: 20-25)

With a market share rose to 16.5% over the 12-week period, from 16.3% a year ago according to Kantar (which monitors the household grocery purchasing habits of 25000 demographically representative households in the UK) (notefoot), Sainsbury is now the third position grocer in the UK. The No1 is the international brand Tesco PLC whose market share slip to 30.3% from 30.4%. Asda (note apply US GAAP), which is the subsidiary of Wal-Mart Stores Inc. fell to16.9% from 17%. Outside of the top four, Wm Morrison Supermarkets PLC maintained its market share at 12.3% in the period. (Johnson 2011: 20-25)

Expansion strategies and challenges

Sainsbury was much more reluctant to move into non-food retailing. Inspired by the success of its main rivals (ASDA had also moved strongly into the non-food and the sheer size of the UK non-food retail market (in 2003 estimated at over £100 million), it launched 2,500 home and foot ware products in September 2003. Sainsbury also used its own food brands and transferred them to non-food items. For example, it extended its clothing range with an organic line and non-food items. Sainsbury expanded into retail banking and property development. In 1997, Sainsbury's bank was established as a joint ms bury plc and the Bank of Scotland (now HBOs).

It today outlined a series of moves to further bolster its position, underpinned by an accelerated expansion strategy to add 2.5 million square foot of selling space in less than two years.

The group has agreed to buy a further nine stores from the Co-operative Group on top of the 24 already ...