Sainsburys, Business Report

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Assignment 1 – Written Business Report

Thomas Buksztel

09199617

Word Count = 1627

Assignment 1 Written Business Report -
J Sainsbury’s

An Introduction to J Sainsbury’s
J Sainsbury’s is the country’s longest running major food retailer, with its first store being opened in 1869. Currently throughout the UK Sainsbury’s has a chain of 502 stores and 290 convenience stores, serving over 18million customers per week and with the larger based stores offering over 30,000 products to a customer during one shop, they are considered one of the major food retailers within the UK. J-Sainsbury’s Goal

‘At Sainsbury's we will deliver an ever-improving quality shopping experience for our customers with great products at fair prices. We aim to exceed customer expectations for healthy, safe, fresh and tasty food, making their lives easier every day.’ (J-Sainsbury’s, 2009, what is the Goal of J-Sainsbury’s?) Current Market Share of the Food Retail Business

Supermarket Store| Market Share (%)|
Tesco| 31|
Asda| 17.2|
Sainsbury’s| 15.9|
Morrisons| 11.4|
Aldi| 8.1|
Lidl| 6.3|
Co-op| 3.9|
(Retail Week, 2009, Waitrose Improves Growth)
The rivals of Sainsbury’s have recently turned up the heat on the store by increasing their like for like sales from last year. Reports suggest that both Waitrose and Morrisons have out stripped Sainsbury’s sales for the year, with 11.7% and 8.4% respectively (Brummer, Alex 2009) However in response to this Sainsbury’s announced that they made a pre-tax profit of £342m putting them 33% up on sales from last year from the 28weeks until 3rd October (BBC, 2009) These figures saw the new clothing range and electrical items out sell food by two and a half times. This could be explained by the opening of the 24hour stores across the country (Steiner, Rupert 2009).

Financial Details of J Sainsbury’s
| 2008 (£m)| 2009 (£m)|
Sales (including VAT)| 19,287| 20,383|
Sales (excluding VAT)| 17,837| 18,911|
Pre Tax Profit| 479| 466|
After Tax Profit| 329| 289|
Basic Share Earning per share| 16.6p| 19.1p|
(J-Sainsbury, 2009, Financials)
These figures have therefore shown us that throughout the last year J Sainsbury’s has increased its Sales and as a result has seen its basic share price rise from 16.6p to 19.1p.

Objectives of Sainsbury’s
When the current Chief Executive of Sainsbury’s, Justin King, joined in 2004 J Sainsbury’s were rapidly losing ground on their retail rivals. They had gone from being the 2nd biggest food retailer in the UK to becoming the 3rd, losing nearly 3% of market share inside 5 years (Bized, 2006, Strategic Planning). However a strategy was put in place to help Sainsbury’s recover and recover their market position. The plan was called the MSGA (Making Sainsbury’s Great Again); this was based on delivering great quality food at fair prices. This strategy had a timescale of 2years before the second phase of the plan was to begin, the Recovery to Growth stage. There were 5 key development points to build upon, these were as follows: * Great food at fair prices

* Accelerating the growth of non-food ranges
* Reaching more customers through additional channels
* Growing supermarket Space and
* Active property management
(J-Sainsbury’s, 2008, Corporate Objectives)
J-Sainsbury therefore has a number of different objectives. They look for profit maximisation, this looks at setting the price and output to gain the most profit possible out of it. Therefore Sainsbury’s could look at the demand and supply of one of their products and see the effect of raising the price on the demand. They will eventually find the optimal point where they make the most profit on it (Sloman, 2007). The company has recently diversified into a new online non-food range, with most stores having a non-food range as well. This range includes goods such as furniture, kitchen appliances and technology products...
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