J Sainsbury plc
Sector: Retail Industry > Supermarkets
|Legal Status:||Public limited company|
|Climate A list (2017)|
Sainsbury's is a large chain of supermarkets, with a ~15.9% share of the supermarket sector. Sainsbury's and Walmart's Asda have agreed to a merger, which would give the combined entity a market share of 31.4%, with 2,800+ stores; and Walmart owning a 42% share. The deal is subject to regulatory approval from the Competition & Markets Authority. As of Sept.2018, the CMA has referred the anticipated merger for an in-depth phase 2 investigation.
J Sainsbury plc, the holding company, is organised into 4 operating segments:
- Food: Sainsbury's operates 605 supermarkets, and 806 convenience stores, as at Mar.2017. "Click and Collect" is a growing part of the business.
- General Merchandise and Clothing: the Argos, Habitat and Sainsbury's Home brands offer a wide range of products both in-store and online. Argos also operates in Hong Kong and China.
- Financial services: Sainsbury’s Bank and Argos Financial Services offer products such as credit cards, insurance, travel money, personal loans and mortgages.
- Property Investments: the group has substantial interests in property, primarily through joint ventures with the Land Securities Group plc and the British Land Company plc. The properties are held for capital appreciation and/or to earn rental income.
Sainsbury's Energy is a partnership with British Gas, launched in 2011.ref British Gas owns and operates the Sainsbury's Energy brand, and uses it to acquire new customers. They are basically the same company, so British Gas customers can switch to Sainsbury's Energy and save themselves up to £200.ref
Inequality in Supply Chains
- 21.8% Qatar Investment Authority
- 3.33% Schroder Investment Management Ltd
- 2.95% Judith Susan Portrait
- 2.89% Schroder Investment Management Ltd
- 2.78% Brandes Investment Partners LP
- 2.35% Kiltearn Partners LLP
- 2.12% Vanguard Group Inc
- 2.11%: BlackRock Investment Management (UK) Ltd
- 2.07% LSV Asset Management
- 1.97% Sanderson Asset Management LLP
- J Sainsbury plc, OC
- 2018: signed a deal with Nexba Beverages to ship sweetened water from Australia to Scotland.
- 2018: signatory to WRAP's initiative to reduce packaging and tackle food waste both around products and in the supply chain. "We are part of a project creating a packaging pigment to allowing black plastics to be more easily detected and recycled." Pathetic. Black plastics have very low recycling value; they are made from low-value multi-coloured waste plastics. Enabling black plastic to be detected will not increase its value, despite what WRAP says. At least, not yet.
- 2017: 2-pint milk bottles were 14.6% lighter, saving 580 tonnes of plastic per year.
- Recycling: Over 88% of primary and secondary packaging is labelled "widely recycled" or "check local recycling". Over 38% of the material used in primary packaging already comes from post-consumer recycled material sources. Shooting for a 50% reduction by 2020 vs. 2005/6 baseline. Has worked with WRAP since its inception, and is a signatory to Wrap's Courtauld 2025 campaign, launched in Mar.2016.
- CO2/GHGs: committed to reduce its absolute CO2 emissions by 30% by 2020, relative to 2005. For 2017/8, location based absolute emissions were reduced by 24%. Market-based absolute emissions fell by 32%. [A/cs 2018, p.85].
- Energy: plans to deliver a fully renewable heat strategy for its supermarkets by 2030. It starting building low-carbon stores in 2014/5, which use power generated from supply-chain waste. Installation of geo-thermal heat pumps is ongoing, which supply ~30% of its energy from on-site renewable sources.ref, ref
- Deforestation: In addition to a 2020 target that own-brand products will not contribute to deforestation, we are working with the Consumer Goods Forum on its zero net deforestation commitment. we pledged our support for the Cerrado Manifesto in 2017 – a multi-stakeholder call to action to halt deforestation and native vegetation loss in Brazil’s Cerrado. We are also members of the Roundtable on Responsible Soy Association and are currently working with our suppliers and external partners to measure and map our soy usage.[A/cs 2018, p.22]
- Fish: working with OceanMind, the not-for-profit division of the Satellite Applications Catapult, to monitor vessels through satellite technology. In 2017, the Marine Stewardship Council named us the best supermarket in the world for sustainable fish. [A/cs 2018, p.23]
- Animal Welfare: We sell more RSPCA Assured labelled products than any other supermarket and we sell more than 50% of all RSPCA Assured products sold in the UK. [A/cs 2018, p.23]
- Water: We are proud to support Courtauld 2025’s new Water Ambition – a collective action approach which aims to improve the quality and availability of water in key sourcing areas in the UK. (p.23)
- Palm Oil: In 2007, Sainsbury's had set a goal of using only sustainable palm oil to manufacture own-brand products by 2014, a goal they did not reach. By Dec.2015, 95% was certified sustainable; at Dec.2016, 98% was sustainable.
- Seafood: UK's biggest retailer of Marine Stewardship Council (MSC) certified seafood for the 6th consecutive year (2016).
- Fairtrade: We are the world's biggest retailer of Fairtrade products (2014/5).
- Animal Welfare: Our meat, poultry, eggs and daily products will be sourced from suppliers who adhere to independently verified higher animal health and welfare outcomes. Sourcing our eggs, some of our meat such as veal, and some of our poultry to the RSPCA Assured standard is one of the ways we source from independently verified higher welfare standards. We continue to be the UK's biggest retailer of RSPCA Assured products. 100% of our eggs, farmed salmon and veal is RSPCA Assured, as is all of our "Taste the Difference" turkey, chicken and pork.
- Food Waste: In 2017/18, our food not consumed was 38,304 tonnes, a reduction of 8% year-on-year. The destinations of our food not consumed were 10,419 tonnes redirected into animal feed and 27,884 to energy (anaerobic digestion). We also donated 1,866 tonnes to charity from our stores and 197 tonnes from our primary logistics network. The amount sent to anaerobic digestion has declined 9% year-on-year.A/cs 2018, p.25
The Good Stuff
- 2015/6: "Convenience Retailer of the Year" for the 6th consecutive year at the Retail Industry Awards.
- 2014/5: "Convenience Retailer of the Year" for the 4th consecutive year at the Retail Industry Awards; Green Retailer of the Year at the Grocer Gold Awards; in the top ten of Carbon Clear's FTSE companies.
- 2014/15: Listed in The Times Top 50 Employers for Women.
J Sainsbury plc
|Apr.2018||Sainsburys & Asda were in talks of merging. Such a merger would give both supermarkets an estimated 30% share of the UK grocery market. Any merger proposal resulting from these talks would be subject to investigation by the Competition & Markets Authority before being allowed to take place. Under the plans, Walmart would own 42% of the combined business. The group would also open branches of Argos within Asda stores.|
|Jan.2018||Nectar Loyalty Ltd: Sainsbury's purchased the entirety of the Nectar UK business from parent company Aimia Inc, Insight 2 Communication LLP.ref|
|Mar.2017||Phone Shop by Sainsburys abandoned in favour of a partnership with EE.|
|Nov.2016||Sainsbury's Entertainment: on-demand online music site closed.|
|Oct.2016||J Sainsbury plc ... 3 divisions ...|
|Sept.2016||Home Retail Group agreed to be taken over, along with its core businesses Argos and Habitat. The deal was agreed in April, and finalised in Sept.|
|Jul.2016||Netto UK: Sainsbury's ditched its joint venture with Dansk Supermarked A/S to concentrate on its core business, and all the Netto UK stores were closed.|
|Jan.2016||Mobile by Sainsbury's closed down; the partners were unable to agree over the future of the service.|
|Sept.2015||Began a partnership with the Alibaba Group, becoming the first UK grocer to export goods to China through Tmall Global, Alibaba's online store.|
|Jul.2015||Pharmacies: LloydsPharmacy acquired all 281 of Sainsbury's in-store pharmacies. The sale was completed in Jun.2016.|
|Jun.2014||Netto UK: Sainsbury's entered into a 50%/50% joint venture with Dansk Supermarked A/S in an attempt to see off discounters Aldi and Lidl.|
|Jan.2014||Sainsbury's Bank: Sainbury's completed the acquisition of the remaning 50% shareholding of Sainsbury's Bank from Lloyds Banking Group plc.|
|Sept.2013||Phone Shop by Sainsburys launched to complement Mobile by Sainsburys. The in-store shops offered mobile phones, accessories, and plans.|
|Jul.2013||Mobile by Sainsbury's, a SIM-only service, was launched in partnership with Vodaphone, following similar launches by Tesco and Asda.|
|Nov.2011||1,000th Sainsbury's store was opened in Irvine, Scotland.|
|Jan.2010||Sainsbury's Entertainment: on-demand online music site launched.|
|Mar.2009||Acquired 24 shops from the Co-operative Group, after the OFT required the Co-op to sell 133 stores as a condition of approval for its takeover of Somerfield Stores. A further 9 shops were acquired in June.|
|Jul.2008||Qatar Investment Authority's Delta Two raised its shareholding stake to 26%.|
|Dec.2007||Price Fixing: Five firms admitted to the price fixing of dairy products between 2002-2003. The operation was calculated to have cost consumers around £270 million. The Office of Fair Trading (OFT) investigation ... acted as part of a cartel of 5 supermarkets (Safeway plc, Tesco, Asda, Morrisons and Sainsburys), plus a number of dairy companies, to fix the price of milk, butter and cheese. In Dec.2007, Asda, Sainsburys and the former Safeway admitted that they acted covertly against the interests of consumers while publicly claiming that they were supporting 5,000 farmers recovering from the foot-and-mouth crisis. They were fined a total of £116 m.|
|Jun.2007||Qatar Investment Authority's Delta Two raised its shareholding stake to 25%.|
|May.2007||Sainsbury's Local: All the convenience shops were re-branded as "Sainbury's Local".|
|Apr.2007||Robert Tchenguiz ... 5% stake ...upped to 10% ... an eye on Sainsbury's property portfolio...|
Qatari investment vehicle QIA (Delta Two) bought a 14% stake.
|2005||Sainsbury's SavaCentre stores were integrated into Sainsbury's main supermarket brand.|
|Apr.2005||S L Shaw Ltd: Convenience store chain of 5 shops acquired. Immediately rebranded to "Sainsbury's Local".|
|Nov.2004||J B Beaumont: Convenience store chain of 6 branches acquired. Again, initially rebranded as "Sainsbury's at Beaumonts"; later to "Sainbury's Local".|
|Oct.2004||Making Sainsbury’s Great Again: plans were announced for the scrapping of the "Sainsbury's SavaCentre" concept, to be integrated under the main Sainsbury's brand.|
|Aug.2004||Jacksons Stores: Convenience shop chain of 114 branches acquired from William Jackson & Son Ltd. Initially rebranded as "Sainsbury's at Jacksons"; replaced with "Sainsbury's Local" by Mar.2008.|
|May.2004||Sainsbury's acquired 28 more shops, as a consequence of Morrisons' takeover of Safeway plc, which resulted in the Competition Commission intervening.|
|Mar.2004||Justin King joined the company as CEO; his recovery program Making Sainsbury's Great Again was positively received.|
Shaw's Supermarkets were sold to Albertsons.
|Feb.2004||Bell's Stores, a chain of 54 convenience shops in north east England was acquired.ref|
|Jun.2003||Shell; 100 new convenience shops at Shell petrol stations, over 3 years. The new shops were based on the existing "Sainsbury Local" outlets, but also sold car care products and motor accessories. Following a successful trial at 6 garages in south-east England, the first shop opened in the autumn but, after 24 shops, the venture was scrapped as unprofitable.|
|2003|| Sainsbury's One mobile virtual network service closed down, having attracted only 60,000 users.|
Asda became the 2nd largest grocery shop, demoting Sainsbury's to 3rd place.
|Sept.2002||Nectar Loyalty Card scheme was launched in conjunction with Debenhams, Barclaycard and BP. The Nectar scheme replaced the Sainsbury's Reward Card. Fun fact: loyalty cards are less cosily described by the companies that issue them as "consumer resource management".|
|May.2002||Discount supermarkets: Sainsbury's extended the SavaCentre format to include discounts under the "Sainsbury's SavaCentre" brand name.|
|Apr.2001||The plug was pulled on the Egyptian adventure.|
|Jan.2001||Sainsbury's One: a mobile virtual network was launched, using the BT Cellnet network.|
|Dec.2000||Homebase was sold to venture capitalist Schroder Ventures, with Sainsburys retaining a 17.3% stake. 28 future Homebase development sites were sold to Kingfisher plc, B&Q's parent company.|
|Oct.1999||Boardroom reshuffle: David Bremner took over control of the core supermarket business in the UK from Dino Adriano, who was given responsibility for the rest of the group.|
|Sept.1999||The SavaCentre hypermarkets were converted to the regular Sainsbury's supershop format.|
|1999|| Pharmacies: Sainsbury's operated pharmacies within its supermarkets. It also provided outpatient hospital pharmacy services to three major hospitals.|
An 80.1% share was acquired in Egyptian Distribution Group SAE on Dino Adriano's recommendation, but the venture showed poor profitability.
|Jun.1998||New chairman George Bull decided to re-launch the brand to revive Sainsbury's corporate individuality; the company underwent a Business Transformation Program ( BTP ) after the assignment of Peter Davis. Sainsbury's unveiled its new corporate identity, developed by Saatchi & Saatchi.|
|1998|| Sainsbury's Local: The first shop was opened in Hammersmith, London, as a pilot.|
David John announced his retirement as Chairman, in order to pursue his long-held ambition as a politician. He was the last family member to be involved in managing the family business.
|Feb.1997||Sainsbury's Bank launched as a joint venture with Bank of Scotland.|
|1996||Reward Cards were introduced, somewhat late in the game due to the unenthusiasm of the three previous CEOs, David Sainsbury, Dino Adriano and Peter Davis.|
|Jan.1996||Home Delivery: an arrangement with Supermarket Direct made Sainsbury's the first major UK grocery to offer a home delivery service.|
|1995||Tesco overtook Sainsbury's to become the market leader.|
|Jan.1995||Texas Homecare, a rival store group, was acquired from Ladbrokes.ref Most of the stores were rebranded, and subsequently converted to the Homebase format. A few were sold off to other retailers.ref|
|1994|| Sainsbury's Central: a new town centre format was announced in response to Tesco's Metro.|
Sainsbury's acquired 50% of Giant Food Inc, a Washington, DC chain.
|Oct.1992||John Davan retired, and was succeeded by his cousin, David John.|
|Mar.1989|| Sainsbury's SavaCentre: Sainsbury's bought out BHS's 50% share in the partnership, and rebranded the stores.|
Alan's son John was made Baron Sainsbury of Preston Candover.
|Nov.1983||Shaw's Supermarkets: Sainsbury's purchased 21% of Shaw's Supermarkets, the 2nd largest grocery group in the northeastern USA, with 60 branches. The remaining 79% was acquired in Jun.1987.|
Timothy stepped down from the Board to pursue a career in politics.
|Mar.1981||Sainsbury's Homebase DIY stores were launched, with the first store opening in Croydon.|
|Nov.1979||Sainsbury's Homebase: J Sainsbury plc formed a joint venture with Belgian retail group GB-Inno-BM, (Grand Bazaar Innovations Bon Marché),ref to bring the supermarket-style design into the British Do-It-Yourself market,ref with Sainsbury's owning 75%. GB (Home Improvements) Ltd was incorporated as the holdco for the fledgling chain.|
|Nov.1977||SavaCentre Ltd: the first SavaCentre opened. On launch, the hypermarket joint venture was re-named as SavaCentre.|
|Dec.1975||Hypermarkets: Sainsbury's teamed up with British Home Stores to form a hypermarket chain, initially known as Sabre Hypermarkets. Sainsbury's retained control of all food-related operations; BHS deal with non-food lines.|
|1974||The first "edge-of-town" store, with the first petrol station, was opened at Coldham's Lane, Cambridge.|
|1973||J Sainsbury plc: The company went public, with 1m shares set aside for staff. The Sainsbury family retained 85% of the shares.|
J Sainsbury Ltd
|1969||John Davan took over as Chairman on his uncle Robert James's retirement. Robert James was awarded a knighthood for services to the arts.|
|1967||Robert James took over as Chairman when his brother Alan John retired. Robert was knighted.|
|1963||David John, son of Robert James, joined the firm, starting off in the personnel department.|
|1962||Alan John was awarded a life peerage; he took the title Baron Sainsbury of Drury Lane.|
|1956||John Benjamin died, and his son Alan John became Chairman. The same year, Alan's sons joined the firm: Simon in the finance department, and Timothy (where?).|
|Jun.1950||Self-Service: The first branch opened in Croydon.|
|1938||John Benjamin had a minor heart attack. His two sons, Alan John and Robert James, became joint managing directors.|
|1936||Thoroughgood chain of 9 stores acquired. There were now 244 branches.|
|1928||John James died; John Benjamin took his place.|
|Nov.1922||J Sainsbury Ltd was incorporated as a private company. There were 136 branches.|
|1915||John Benjamin Sainsbury, the eldest son, went into partnership with his father.|
|1882||The small business was blooming; they now had 4 shops and a depot to supply them in Kentish Town, London.|
|1869||John James Sainsbury and his wife Mary Ann opened a shop in their Drury Lane home in London.|
- Jun.21.2018: Sainsbury’s takeover of Asda could do with some rigorous scrutiny. By any traditional measure, Sainsbury’s takeover of Asda looks anticompetitive. It would permanently alter a supermarket sector that is working well for consumers. As for small suppliers, one doubts many will be reassured by Coupe’s vague promises. Nils Pratley, The Guardian.
- Aug.23.2018: Asda workers fear Sainsbury’s will hold all the power. Store managers can see the logic, but shopfloor staff worry about what they will stand to lose. Mike Coupe, Sainsbury's chief executive and the main architect of the deal, says that the merger is essential to ensure the long-term future of both businesses operating in a sector where net margins are about 2½p in the pound. See Asda for the full article notes. Deirdre Hipwell, The Times.
- Aug.20.2018: Sainsbury’s and Asda merger: a bargain buy, but does it actually stack up? The first of a series looks at whether the merger that will change the face of food shopping is a great deal. “I find it very hard as an informed layman to understand why the Competition & Markets Authority would willingly allow Sainsbury’s and Asda to merge and create another behemoth like Tesco. I don’t think the merger should go through.” These are the words of one senior supermarket industry executive who has nothing positive to say about J Sainsbury’s planned £12 billion tie-up with the Walmart-owned Asda. Alongside potential store closures and food prices, the Competition & Markets Authority is likely to scrutinise the sale of petrol. Deirdre Hipwell, The Times.
- Jun.2018: Here's How Sainsbury's is Using Big Data to Drive Customer Experience. ...The new centre is tasked with identifying opportunities (dubbed 'moonshots') within the Sainsbury's business which are ripe for data driven innovation. The most ambitious of these projects is the Data Lake programme. This innovation seeks to process the 300 transactions per second running through Sainsbury's checkouts, and turn them into a vast pool of data which can then be leveraged to drive better buying- and customer experience-focussed decisions. WBR Insights, eTail.
- May.24.2018: Sainsbury's to cut pay by £400 a year on average for 9,000 staff. Sainsbury’s could face legal action from the union Unite after the supermarket said it was pressing ahead with a plan to cut paid breaks, annual bonuses and premium pay for Sundays, leaving thousands of workers out of pocket. After weeks of consultation with staff and pressure from unions and MPs, the supermarket on Thursday pledged extra pay for online delivery drivers, those on night shifts and those in outer London boroughs, adding £10m to its pay settlement. Sainsbury’s said it was investing £110m in a pay rise for 93% of its 130,000 shop workers, taking pay from £8 to £9.20 an hour, or £9.80 in London, to give an average pay rise of 9.3%. However, the removal of paid breaks, the annual bonus and Sunday and bank holiday pay means 7% of Sainsbury’s staff, or about 9,000 people, will suffer an average pay cut of £400 a year. The supermarket said it would make up the difference in their earnings for 18 months and pledged to review its policy in March 2020. Sainsbury’s has previously been accused by unions of “robbing Peter to pay Paul” and more than 100 MPs signed a letter to the prime minister this week calling for her to intervene. Sainsbury’s said the new deal was “intended to rectify the unfairness of colleagues working side by side in store, doing exactly the same job but being paid different amounts depending on when they started working for Sainsbury’s.” Sarah Butler, The Guardian.
- Apr.30.2018: Sainsbury’s reveals terms of £12bn Asda deal. Deirdre Hipwell, The Times.
- Apr.30.2018: Sainsbury’s merger ‘a bad deal for suppliers’. The proposed £12bn merger between J Sainsbury and Asda has raised fears that the enlarged group will force suppliers to cut prices further. Improved buying power has been cited by insiders as one of the key benefits of the proposed marriage of two of the supermarket industry’s so-called "Big Four". Suppliers are bracing themselves for further pressure on margins if the deal goes through. One large supplier of branded goods to the big grocers said that a merger would be especially harmful to smaller producers. Jonathan Buxton, a partner at Cavendish Corporate Finance LLP, said: “The hard-pressed supermarket suppliers will rightly be concerned that they will face further customer concentration and pressure on margins.” Asda was named by the Groceries Code Adjudicator, the industry watchdog, as the worst of the big supermarkets for its treatment of suppliers last year, although the group said that it was taking steps to improve relations. Although Sainsbury’s and Asda are expected to argue that their increased buying power will lead to reduced prices, one rival said that shoppers might still be worse off: “If this deal happens, it means the top 2 supermarkets in the country will have 60% of the market. “How can that be in the interest of consumers? The marketplace will be completely redefined.” more re both Asda and Sainsbury's. Dominic Walsh, Deirdre Hipwell, The Times.
- Apr.20.2018: Sainsbury's accused of breaking pledge on chicken welfare. Sainsbury's has been accused of breaking promises on improving welfare conditions for chickens after it handed back a good practice award. The animal rights pressure group Compassion in World Farming said Sainsbury’s applied for the group’s “good chicken” award in 2010 and committed to upgrade within 5 years all its fresh own-label chicken to the RSPCA Welfare Mark, which involved giving birds more living space and light. 8 years on, CIWF says less than 20% of the chicken Sainsbury’s sells meets the higher welfare standard. In a letter to the supermarket, the pressure group said it was “appalled that Sainsbury’s had broken its promise”, adding that it was publicly withdrawing the award it gave to Sainsbury’s. The supermarket said it had chosen to return the award to CIWF, which was linked to the pledge to give birds more space, because it now disagreed with the group’s approach to animal welfare. The move was partly a response to campaigns by the chefs Jamie Oliver and Hugh Fearnley-Whittingstall. Judith Batchelar, then director of the Sainsbury’s brand, told the chef’s 2009 documentary Chickens, Hugh and Tesco Too: “We’ve said all the way along that our minimum standard will be the RSPCA Freedom Food standard so all of our birds will meet or exceed that standard.” The supermarket claimed it had only ever pledged to be the biggest retailer of Freedom Food, as listed in its latest ethical report, and not to upgrade its entire range. A Sainsbury’s spokesperson said: “Judith’s comments were made almost a decade ago. In the many years that have passed we have become the largest retailer of RSPCA Assured products in the UK and our commitment to animal welfare has not diminished in any way.” Sarah Butler, The Guardian.
- Jan.14.2018: What are supermarkets doing to fight plastic? Plastic waste is "one of the great environmental scourges of our time". These are the words of Prime Minister Theresa May, who has pledged to ban all avoidable plastic waste in the UK by 2042. Despite extending the 5p charge on single-use plastic bags, major retailers in England still sold 2.1bn in the last financial year. But organisations like Greenpeace UK are sceptical about the plan, citing Mrs May's "vague aspirations". So what are Britain's 10 biggest supermarkets doing to combat the "scourge" of plastic? Sainsbury's has set a target to reduce packaging by 50% by 2020, compared to 2005. It has also committed to remove all plastic cotton buds, a major source of ocean plastic pollution. The supermarket recycles carrier bags, and has achieved a 33% reduction in its own brand-packaging since 2006. Between 2015 and 2016, it also redesigned its 2-pint milk bottles, saving 580 tonnes of plastic a year. BBC News.