A great place to work
Most store colleagues live within the communities served by their store and many donate time and effort to causes outside work. Our Local Heroes scheme recognises and encourages colleagues who do this with awards of £200 to £500. Providing a great place to work and community involvement are combined in activities such as sponsorship. Sainsbury’s has been the retail sponsor of Comic Relief since 1999 and raised £2.3 million for Sport Relief in March 2008. In October 2007, four colleagues from our Scunthorpe store, which had raised the single highest donation for Comic Relief in March 2007, went to India to see projects that were benefiting from money raised, such as the Railway Children project which helps support some of the 18 million children living on the streets in India.
117,000 colleagues will share a bonus of £47 million this year bringing the total amount paid out over the past three years to over £150 million. The bonus scheme is linked to the delivery of great service and product availability as well as overall sales and profit measures. The targets for the one-off MSGA share plan have also been met in full at the end of the three-year period meaning that the first payment under the scheme, due in May 2008, will be made to around 1,000 managers. The second payment due in May 2009 will depend on continued strong performance.
Great food at fair prices
Sainsbury’s customers expect quality to be maintained in the delivery of competitive pricing. Even though consumers have had to manage their expenditure more carefully over the past year they still want healthy, safe, fresh and tasty food as well as fair prices. Sainsbury’s price competitiveness is currently the best it has been for many years following the investment of more than £450 million over the last three years. Around 15,000 prices are checked every week to make sure our competitive position is maintained and developed.
In August 2007, we launched our ‘Different values’ campaign to emphasise the higher quality specifications and great value of our own brand products. In March 2008, our ‘Feed your family for a fiver’ campaign showed customers how affordable, healthy and nutritious meals for a family of four could be prepared within a budget of £5. Since the campaign began sales of featured ingredients have shown a marked increase. Sales of the minced meat featured in the launch television advertisement increased by 200 per cent and demand for ‘basics’ spaghetti and tinned tomatoes also saw significant increases.
The campaign has particular relevance as consumers face increasing constraints on household spending but clearly shows that at Sainsbury’s they do not have to compromise on food quality when shopping on a budget. Customers also respond very positively to the tip cards which accompany the campaign. We first issued the cards when we launched our ‘Try Something New Today’ branding in September 2005 and since that time 200 million cards have been distributed, covering 350 different ideas.
We have worked hard to restore the universal appeal of the Sainsbury’s brand by developing product ranges that meet a diverse range of requirements. There is a clear rise in the ‘savvy shopper’ who buys both ‘basics’ ingredients, where an item’s appearance is not a primary concern, alongside premium ‘Taste the difference’ products, such as meat and fish, where strict quality and taste standards are required.
‘Taste the difference’ (“Ttd”) is our biggest sub brand at around £1 billion of sales a year. It comprises around 1,300 products and was our first own brand range to be free of artificial colours, flavours and hydrogenated fats. In the autumn of 2007 we staged the UK’s biggest ever taste test with over five million samples of over 200 different Ttd products tried in-store by customers. Fresh meat and fish have seen significant growth, driven by both the increase in awareness of higher welfare chicken and a strong promotional programme.
Following its reinvigoration in April 2007 and significant range expansion, our entry level ‘basics’ range had a strong year with growth, at 20 per cent, significantly ahead of the market. Comprising around 500 products, it is our fastest growing sub brand. ‘Sainsbury’s SO organic’ range has over 450 products. All fresh organic meat, eggs and milk come from British farms and 90 per cent of organic fresh produce is in home-compostable, recyclable or recycled packaging.
We have removed artificial colours, flavour enhancers, the sweeteners aspartame, saccharin and acesulfame k, and the benzoate group of preservatives from virtually all our 12,000 plus own brand food and drink including market firsts for cola and lime cordial. The only exceptions are where it compromises product quality and in these cases there is clear labelling on product packaging. Sucralose is now the only sweetener used in Sainsbury’s own brand food and drink where, for a variety of reasons, customers wish to avoid natural sugars. We have not permitted the use of specific additives, as recommended for voluntary ban by the Food Standards Agency in April 2007, to be used in food and drink since 2005.