J Sainsbury plc (Sainsbury) is a retail chain based in the UK. Sainsbury is engaged in grocery retailing through its supermarkets and convenience stores principally in the UK. The company operates its business through three divisions, namely, Retailing, Financial Services and Property Investment. Sainsbury serves its customers through a chain of 537 supermarkets and 335 convenience stores under the brand Sainsburys, and financial services via Sainsburys Bank. Sainsbury offers around 30,000 food and non-food products and services. The company is headquartered in London, the UK J Sainsbury plc Key Recent Developments Mar 11, 2010: Sainsbury launches first bakery college in the UK Mar 08, 2010: Sainsbury to add electronics to its website Mar 02, 2010: Sainsbury's to strengthen supply chain in Africa Feb 19, 2010: Sainsbury's opens new supermarket in Dursley, announces recruitments Feb 18, 2010:
• Sainsbury's has had thirteen straight quarters of growth showing real turnaround in its business (Rigby and Braithwaite 2008). Even for 2007 it has shown an increase of 7% in turnover and a huge 450% increase in profit after tax (Annual Report 2007).
• It has an extremely experienced leadership team with Justin King, its Chief Executive receiving great praise for his work in Sainsbury's (timesonline.co.uk 2008 [online]).
• Sainsbury's seems to be very well placed on green and environmental issues due to its various recent initiatives, like buying fair-trade bananas (economist.com 2008 [online]). Furthermore its help in closing down gangmaster (Taylor 2008) has had a positive effect on the public in general. It has a positive consumer brand and it's liked by both green activists and consumers.
• It is one supermarket chain that has a clear celebrity endorsing products, leading to increased sales. "With Jamie Oliver, it has been simple for Sainsbury's to see uplifts in sales of specific ingredients that have been featured in ad campaigns. Apparently the supermarket had to order nine tons – the equivalent of two years' supply – of nutmeg to meet demand when it appeared in one of Oliver's hundred-plus ads" (Dickinson 2008).
• The takeover bid by the Qataris Private equity firm last year (Arnold and Politi 2008) can have some implications as people are gravitating towards British companies and the prospect of Sainsbury's being governed by a foreign firm can lead to consumers switching loyalties.
• Unlike Tesco's expansion plan (economist.com [online] 2008), Sainsbury's is not present in markets other than the UK. This can lead to trouble especially if there is some problem within food retailing in the UK or if there needs to be a source of extra growth.
• Sainsbury's alternative business presents a great opportunity for future growth. Its investments in property (Killgren 2008b) and a goal of £40 million profit through its bank seem like a good strategy to pursue.
Online sales are a great opportunity as well, since online margins are higher and investments are not huge. Threats
• There needs to be continuous heavy investment in environmental and green issues without immediate benefits. The problem lies in maintaining a balance e.g. Bio-fuel is an important tool to curb global emissions and its use affects Sainsbury's supply chain directly, so Sainsbury's should support it. However, a spurt in bio-fuels has made corn dearer (independent.co.uk [online] 2008) affecting its prices within the UK and making Sainsbury's consumers bear the brunt.
• Sainsbury's operations are subject to a broad spectrum of regulatory requirements particularly in relation to planning, competition and environmental issues, employment, pensions and tax laws and in terms of regulations over the group's products and services.
IMPORTANCE OF ENVIRONMENTAL FACTORS:-
Environmental factors comes under two kinds of factors Internal and external...