Teaching activity
Most Sainsbury’s food sales now in store: GCSE Business In The News
![](https://tutor2u-net.imgix.net/library/Headshots/mike-mills.jpg?auto=compress%2Cformat&crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&h=100&q=80&w=100)
2nd May 2024
Have a go at this teaching activity, which includes a downloadable worksheet and suggested answers.
What's the story?
Sainsbury's, the UK's second-largest supermarket, reported strong food sales driven by its strategy of keeping prices low to attract shoppers. However, sales in other areas like clothing and fuel were weaker.
The company's pre-tax profits for the past year fell by 15% to £277 million, largely due to costs associated with winding down its banking division. Nonetheless, underlying profits rose 1.6% to £701 million, slightly higher than expected.
Sainsbury's attributed the success of its food business, which saw grocery sales grow by 9.4%, to its focus on competitive pricing through initiatives like Nectar prices and price-matching Aldi. The retailer has spent £780 million over the past three years to keep prices low.
While food sales were strong, Sainsbury's general merchandise sales, including Argos, slipped 0.5%, and clothing sales fell 6.4%. The company cited factors like wet weather affecting seasonal goods sales and disruptions to clothing supplies due to rebel attacks on shipping in the Red Sea.
Sainsbury's CEO Simon Roberts expressed confidence in delivering strong profit growth in the coming year and expects inflation to stabilize in low single digits. He suggested that a potential cut in interest rates later this year could boost sales of more expensive non-food items as cautious shoppers begin to "trade up."
The retailer also experienced a temporary technical issue affecting some online deliveries on the day of the results announcement, but the problem was quickly resolved and impacted only a small number of customers.
Most Sainsbury's food sales now in store
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