STRENGTHS AND WEAKNESSES

Strengths and Weaknesses of J Sainsbury

Strengths and Weaknesses of J Sainsbury

Company Overview

J Sainsbury (Sainsbury) is a UK based food retailer with business interests in financial services. The company operates supermarkets, convenience stores (J Sainsbury), internet-based home delivery shopping service and Sainsbury's Bank. It is headquartered in Holborn, London and employs 148,500 people of which 98,800 are part-time employees. The company recorded revenues of £18,911 million ($32,828.7 million) during the financial year ended March 2009 (FY2009), an increase of 6% over FY2008. The operating profit of the company was £673 million ($1,168.3 million) during FY2009, an increase of 27% over FY2008. The net profit was £289 million ($501.7 million) in FY2009, a decrease of 12.2% compared to FY2008. If I were the CEO of J Sainsbury then three things I would like to change are mentioned below.

Strengths

Significant market presence in the UK

Sainsbury's is one of the largest and the oldest supermarkets in the UK. The company has a market share of around 16% and serves over 18 million customers a week. It offers around 30,000 products through 502 supermarkets and 290 convenience stores. The company also operates 169 stores offering internet-based home delivery shopping service. Strong presence in the UK would not only enhance the bargaining power of the company but also strengthen its brand image. (J Sainsbury)

Private Brand Portfolio

Sainsbury has developed a strong private brand product portfolio over the years. Under the food category, "Taste the difference" (Ttd) is the company's biggest sub brand. The company also offers organic products under "Sainsbury's SO organic" range. In the non-food products, the company offers clothing under its “TU” brand and home and lifestyle products under “TU home" brand. Another non-food brand, "Basics", is the company's fastest growing own-brand range which comprises of 650 products. In light of the global financial crisis, private labels are a prime growth opportunity for retailers. While responding to consumer trends these products also have high margin potential. Sainsbury's growing private brand portfolio would increase profitability.

“Good, Better, Best” Price Architecture

Sainsbury has gained a broad appeal by differentiating itself by offering products at fair prices. In response to the recession, Sainsbury's introduced the “good, better, best” product range. Through this new range, the company ensured that every customer has a product to match their budget without compromising on choice or quality. As a result, customer transactions have grown to over 18 million a week. This strategy has helped Sainsbury to establish a competitive advantage and drive sales in a weak economic environment.

Expanding Presence

The company has taken a number of initiatives in the recent past in order to expand its presence. For instance, the company acquired 24 stores from the Co-operative Group, comprising 22 Somerfield branded stores and two Co-operative branded stores. The stores have a net selling area of 236,000 square feet. In addition, Sainsbury has opened new stores during FY2009. The company opened 13 new supermarkets, including two replacement stores, and completed 21 supermarket extensions and 13 refurbishments (J ...