Sainsbury’s has ramped up its bid to eat into the grocery sector, as it looks to rapidly make profits with investment, new stores and a share buyback scheme.
The supermarket giant said it wants to put “food back at the heart of Sainsbury’s” offering customers more choice and trying to ” attract more bigger basket primary shoppers”.
Currently only 15 per cent of its supermarkets offer the full food range, with the new plan to focus on 180 of these highest potential stores.
This comes after Sainsbury’s announced last month it will undertake a “phased withdrawal” from its banking efforts, as it refocused on food, in a move which could impact its 1.9m customers.
It also said there would be a drive to save £1bn pounds in structural cost reductions, and ramping up technology across its infrastructure.
Sainsbury’s said it would expect profit growth from the start of the plan, and would increase capital expenditure by between £800m-£850m each year for the next three years.
Other areas of investment include £70m into its electric vehicle charging network, and open around 75 new Sainsbury’s local convenience stores across the UK.
The supermarket giant also said it will pursue a”progressive dividend policy” from the beginning of the next financial year, and will start a share buyback of £200m, supported by free cash flow of “at least” £500m.
Sainsbury’s is Britain’s second-biggest supermarket, behind Tesco. In its most recent report to markets in early January, Sainsbury’s said its performance over the festive period saw third quarter food sales grow 9.3 per cent while Christmas grocery sales jumped up 8.6 per cent.
Its share price has been almost three per cent up in the past year.
Simon Roberts, chief executive of J Sainsbury, said “We’re going to build on what’s driven our success since 2020. We’re determined to be First Choice for Food, ensuring more customers in more of our stores can enjoy more brilliant Sainsbury’s food.
“That means more space for our food offer, while still delivering the general merchandise products customers want from us. That way, not only will we find more ways to delight new and existing customers, we will also continue growing volume market share.
“While I’m proud of the progress we’ve made to date, we’re only just at the beginning of rediscovering quite what this business is capable of. By taking Sainsbury’s to the next level, delivering for customers and colleagues, we will also deliver enhanced returns for shareholders through a share buyback and committing to a progressive dividend.”