Seeing that consumers are ‘really responding’ to digital marketing, Sainsbury’s is celebrating its status as the UK’s second largest online grocery retailer after growing its market share.
Sainsbury’s credited a strong performance from brands such as Argos, Habitat and Tu for improving sales and profits, as the retailer announced a new digital push to keep its online sales growing.
Speaking live from the Cop26 conference in Glasgow, of which Sainsbury’s is a key sponsor, the retailer reported underlying pre-tax profit of £371m for the 28 weeks to September 18, an increase of 23 % compared to the first half of last year. Statutory profit before tax was £541 million.
Overall sales rose 5.3%, with fuel sales up 62.7% after a period marked by widespread panic buying. Grocery sales were up 0.8% from the same period last year and 9.1% from the first half of 2019 before the pandemic. General merchandise sales were 5.8% below last year’s high lockdown levels, but 1.1% ahead of 2019 figures.
The group maintained an increased level of digital sales after changing consumer behavior during the Covid-19 pandemic. Some 39% of the supermarket’s retail sales were digital in the first half, representing revenue of £5.8bn. As a result, the retailer has focused more on digital marketing messages, according to Sainsbury’s chief executive Simon Roberts.
We now have 8.2 million digital Nectar users. It is an absolutely essential platform to be able to communicate directly and in a more personalized way.
Simon Roberts, Sainsbury’s
“We see that customers are really responding to digital marketing in terms of value and innovation, so it’s been a solid platform for us and we’ve continued to build it as more and more customers shop online. “, he told Marketing Week during a press briefing. today (4 November).
The retailer plans to maintain and drive digital sales growth, having been the biggest market share gainer in the online grocery sector during the reporting period. Roberts confirmed that Sainsbury’s now holds 21.3% of the UK online grocery market by value, beaten only by Tesco.
“One of the things that’s happened during the pandemic is clearly we’ve seen online grocery customers increase dramatically and that’s really something we’re looking to continue to drive,” he said. declared. “We’re doing a lot more functional and influencing communication than we were a year ago, and again we’re getting a really good response doing that.”
Argos, which Roberts described as an “over 80% digital” company, is also driving its digital interactions with customers. Despite the digital focus, Argos will launch a conventional Christmas ad at the end of this week, Roberts confirmed.
The power of data
Like other major retailers, including Tesco and Boots, Sainsbury’s is increasingly using data from its loyalty program to drive more targeted and effective digital marketing.
The group launched its Nectar prize program in September, offering Nectar digital customers discounts on frequently purchased Sainsbury’s products.
“We now have 8.2 million digital Nectar users. It is an absolutely essential platform to be able to communicate directly and in a more personalized way with these customers. Launching Nectar Prices three or four weeks ago was a very clear indication of our commitment to providing customers with personalized value and offers,” Roberts said.
Sainsbury’s insists its Food First strategy, designed to put food back at the heart of the supermarket brand, has been successful, with price-matching offers from Aldi helping to take market share from all rivals of the sector. The supermarket also says it has invested in service, improving both the customer experience and the efficiency of its online offering.
The effort of the staff over the past year must be recognized with the stores closing on Boxing Day this year to give them more time with their families.
Sainsbury’s expects to report underlying profit before tax of at least £660m for the full year to March 2022.