J Sainsbury Plc · LSE:SBRY
J Sainsbury — Investor Day (February 2024)
69 slides from J Sainsbury's investor day presentation, February 2024
Slide 1: Sainsbury's
Sainsbury's We make good food joyful, a accessible everyone loves and affordable for everyone, Save an every day to win
Slide 2: Breakout
Breakout
Slide 3: First choice for food
aad More food choice for more customers Consistent value, every day The leader in freshness, availability and innovation A complementary range of relevant products and services Amore resilient food system First choice for food
Slide 4: Food is firmly back at the heart of Sainsbury's
Sainsbury Food is firmly back at the heart of Sainsbury’s ~~ Reset our More than doubled Delivering leading competitiveness our rate of innovation customer satisfaction Improvement in value index! New products launched Overall supermarket satisfaction score? Lidl Aldi 1,320bps 1,630bps Sainsbury's A
Slide 5: Market share gains with further opportunity
Sainsbury Market share gains with further opportunity We’re winning market share... But there is further opportunity to increase our primary shopper numbers YoY % volume differential to the market? % of total customers that are primary shoppers? +10% 18/19 19/20 20/21 21/22 22/23 23/24 Sainsbury’s K
Slide 6: First choice for food, building on Food First momentum
First choice for food, building on Food First momentum Sainsbury ple Next Level Sainsbury’s February 2024 vie . - ¢ “(t%): Value that sticks Innovate to Tailored lead and personalised More for Suppliers as partners more “gs | Fh Sainsbury's First choice for food wa
Slide 7: Value that sticks
Sainsbury's ¢ Value that sticks Value that sticks: improve real and perceived value for money Building on our ..and highly engaged ...we will continue to make consistent customers... progress on value perception value proposition... nectar > 95%. YouGov value perception: 0 Sainsbury’s Morrisons Tesc
Slide 8: Build lead in quality and inspiration
build lead in quality and inspiration Proposition Activation “Si — First choice for food Next Level Sainsbury’s February 2024
Slide 9: Our strong store estate enables us to serve customers
Sainsbury's Our strong store estate enables us to serve fy More for customers however we they want to shop 596 Supermarkets 821 Convenience stores 99% Groceries Online coverage Grocery volume share’ 0-9% 12-14% © 912% © 14%+ L.Nielsen panel data, Total FMCG excl. Kiosk and Tobacco. Regional market s
Slide 10: More for more: more food range for more customers
Sainsbury's More for more: more food range available for more of our customers a Only 15% of our We've identified clear opportunities to improve supermarkets our customer offer by clustering our store estate offer our full food range Number of Customer % stores with supermarkets satisfaction* full f
Slide 11: Optimising space in one third of stores over years
Optimising space in one third of stores over 3 years Solution tailored by store with a focus on fresh food 180 ge = = = i = a mee mihaN ; Silver - Zi EE = des D 4 ’ i | * eee "[AITCHEN DELI Number of stores =" Next Level Sainsbury’s February 2024 ra More for More First choice for food
Slide 12: More for more: Optimising space and range in Convenience stores
Sainsbury's More for more: Optimising space and range in our Convenience stores [i More for More ° Rebalancing space towards fresh food * Optimising range and proposition * Delivering relevant value * Resetting the operating model Sainsbury ple Next Level Sainsbury’s February 2024 First choice for f
Slide 13: Suppliers as partners
Suppliers as partners is key for delivering our plan Sainsbury ple Next Level Sainsbury’s February 2024 Availability Plan for Better Imovation Security of supply Sainsbury's SS Suppliers as Partners First choice for food wa
Slide 14: First choice for food
. . Sainsbury's First choice for food Be our most competitive, grow volume and gain share ° Building on strong momentum with customers Value that Innovate to sticks ao lead ° Strong track record of personalised delivery Suppliers More for as partners more ° Plan backed by investment “gs | Hh Sainsbu
Slide 15: Loyalty everyone loves
Breakout Loyalty everyone loves
Slide 16: Personalised, rewarding and integrated loyalty
Personalised, rewarding and integrated loyalty Joy and connection beyond transactions World-leading Nectar360 capabilities Strong coalition of partners Always transparent use of data Strategy Overview
Slide 17: Our Nectar ecosystem
Our Nectar ecosystem : NEC TAR 3690 Si) ) @&@ & & Reward customers Data to A winning Supplier media Insight todrive Data to improve with points improve coalition opportunities innovation targeting & and £ customer proposition measurement JSainsbury ple Next Level Sainsbury’s February 2024 Nectar: Lo
Slide 18: Nectar is ahead of plan
Nectar is ahead of plan Significant progress on digital Nectar Incremental profit contribution ahead of forecast +£90m additional profit 16m+ digital . collectors by March 2026 J. 10m+ digital collectors Personalised offers each September January ee 21/22 22/23 23/24 24/25 25/26 2019 2024 This chart
Slide 19: Transformational launch of Nectar Prices
Transformational launch of Nectar Prices Nectar participation Customers Improving value has significantly recognising the perception with increased’ value of Nectar? Sainsbury’s customers? £12 >6,000 Average Nectar saving on prices an £80+ offers weekly shop +8% f Pts pts ; ae March December March D
Slide 20: Loyalty schemes are increasingly popular with customers
Loyalty schemes are increasingly popular with customers What do consumers look for in a loyalty scheme? Balance effort and reward 44% 42% 36% "| Personalise offers Changing Consistent Simpleuser Datasecurity Extra benefits offers and offers and experience rewards rewards Source: YouGov ‘What the Bri
Slide 21: We're building engagement and driving greater loyalty
We’re building engagement and driving greater loyalty Registration i +30 points Signing up to Nectar Regularly checking points balance Engaging in weekly Nectar points offers & Seder pon ger Engaging across the Nectar coalition, using points with partner brands Sainsbury ple Next Level Sainsbury’s F
Slide 22: We know where we need to focus
We know where we need to focus ay to continue to deliver pee nectar prices Digital Integration User Experience JSainsbury ple Next Level Sainsbury’s February 2024 Nectar: Loyalty everyone loves [22
Slide 23: What is a retail media network?
What is a retail media network? wiz apm o7on 66, media platform that a retailer has built to allow brands to advertise to customers both instore and online so the brand can achieve their awareness, trial and ultimately sales objectives. 9 Sainsburys.co.uk (onsite advertising) Digital trading platfor
Slide 24: All trends point to a strong future growth opportunity
All trends point to a strong future growth opportunity UK Retail Media market opportunity US Retail Media Share of total advertising spend 2024 Forecast! =. S61.2bn market size a> £2.4pn ~ market size 1. US Digital Retail Media Ad Spending. eMarketer, Insider Intelligence 2,UK Digital Retail Media A
Slide 25: World-leading Nectar360 business
We are well positioned with our world-leading Nectar360 business 224 Colleagues NEC 16 10 Vears’ experience Loyalty Shopper Marketing retained long-term advertising placements Nectar partnerships in and around store media 870 . Clients 10 Agency partnerships Data and Insights Digital Media st bespok
Slide 26: Our ways of working enable deep collaboration with suppliers
Our ways of working enable ay TAR deep collaboration with suppliers 360 Brand Marketing Shopper Marketing Trading Sainsbury ple Next Level Sainsbury’s February 2024 Client / Nectar360 insight & Retail Media Offsite : Brand & Digital Tradin Programmatic . Direct & Budgets agency . investment Onsite B
Slide 27: Focused on delivering strong ROI for our clients
Focused on delivering strong ROI for our clients Offsite Advertising Digital Trading Platform Example: leading frozen food brand 9.6 million Impressions served 19.5% Conversion to brand £8.57 Return on advertising spend* 1. Defined as brand sales generated for every £1 of media spend on a campaign S
Slide 28: Investing to deliver the next stage of growth
Investing to deliver the next stage of growth Va Leadership, people Agency partnerships y Digitise instore media ~ Gym 4 O) ll PubMatic sky \. , and capabilities \ J J f— \ f— Offsite partnerships Unifying our retail Measurement media capabilities & transparency Sainsbury ple Next Level Sainsbury’s
Slide 29: Delivering on these aspirations will drive greater growth
Delivering on these aspirations will drive greater growth in contribution Previous guidance Forecast incremental profit contribution +£90m additional profit by March 2026 21/22 22/23 +23/24 24/25 25/26 This chart is not to scale Sainsbury ple Next Level Sainsbury’s February 2024 Forward guidance wiz
Slide 30: Breakout
Breakout
Slide 31: More Argos, more often
ee i CLICK & COLLECT Unleash and transft things that have alwe curated range, fam and great value — s' complete ne often ¥ ) * Famous for convenience * Inspiring choice, always great value * Supercharged digital capabilities * Accessible and relevant credit, care and services * Smarter, simpler serv
Slide 32: The General Merchandise market continues to evolve
. Argos The General Merchandise market eas continues to evolve Seamless multi-channel Strong brands... Great platforms... experience ME og | Daly NEXT « cD 1200 Etsy SCREWFIX Glossier. amazon SEPHORA J Sainsbury ple Next Level Sainsbury’s February 2024 More Argos, more often a
Slide 33: Argos is strong in all three of these areas
Argos is strong in all three of these areas Strong owned brands Platform for others Leader in multi-channel ee Tu & BUSH cookworks dyson 26@ © bugaba SAMSUNG 3 BRAKEBURN Joseon _ Josepn TEMPUR S A OSE brabantia Hush Puppies” #1 Click & Collect Retailert #2 General Merchandise Retailer? #3 Most visit
Slide 34: Digital first delivering for customers
e e e e e Argos Digital first delivering for customers age Transformed from catalogue retailer to digital first 74% online sales participation Convenience is the cornerstone of our customer proposition Strong customer satisfaction’ c.70% +11%pts vs 19/20" Sales collected in store 16m c.70% Digital c
Slide 35: We've transformed our operating efficiency
We’ve transformed our operating efficiency Rebalanced our store estate Argos stores 431 Sainsbury’s ) Collection points Standalone stores FY 19/20 H123/24 1,100 Points of Presence Sainsbury ple Next Level Sainsbury’s February 2024 Better availability, more efficiently Hubs replaced by Local Fulfilme
Slide 36: A more resilient business in cyclical markets
ene e e e Argos A more resilient business in cyclical markets Ea Significant cost base reduction Argos SG&A to sales down >300bps 19/20 22/23 Sainsbury ple Next Level Sainsbury’s February 2024 Lower fixed costs protecting profitability Gl Operating Profit — Sales 16/17 17/18 18/19 19/20 20/21 21/22
Slide 37: Argos transformation: the next phase
Argos Argos transformation: the next phase Clear opportunity Half of UK households shop at Argos’ 3 times per year 1-2 items in their basket 1. Kantar Worldpanel. UK households vs ONS Total UK households 2022 2. YouGov Brandindex - brand health metrics ranking. December 2023 J Sainsbury plc Next Lev
Slide 38: Famous for convenience, inspiring choice, supercharged digital
Famous for Inspiring choice, Supercharged convenience always great value digital capabilities Accessible and relevant credit, care and services Next Level Sainsbury’s February 2024 More Argos, more often
Slide 39: Committed to delivering market-leading convenience
Committed to delivering market-leading convenience Improve awareness of industry-leading same/next day proposition’ operating model 100% Invest in new Browse & Pay 80% in-store experience 60% Leverage LFC investment to 40% improve availability 20% Continue to raise the bar on ox 0 delivery speed and
Slide 40: Inspiring choice, always great value
Inspiring choice, always great value Desirable brands Design-led Completing Always great Own Label basket value Next Level Sainsbury’s February 2024 More Argos, more often
Slide 41: Driving growth through selective range extension
Driving growth through selective range extension "=== Inspiring choice, always great value Availability and assortment Opportunity to expand range are the key barriers to shopping at Argos and choice Customer feedback: barriers to shopping at Argos Supplier-direct fulfilment model * Extending core (
Slide 42: Supercharged digital capabilities
Driving ‘top of mind’ awareness Get our best deals now. Prices won't go lower* The: Ble Next Level Sainsbury’s February 2024 argos.co.! There's more to 2023.0 Now Tacs apply Supercharged digital capabilities Ambition: double Argos app participation higher than website more per order More tailored cu
Slide 43: Modernising our credit proposition
e e e e e Argos Modernising our credit proposition ges Accessible and relevant credit, care and services Where we are today Future state Wider range of modem finance products 21% Storecard Higher sales penetration sales penetration Digital first solutions 2m customers Not digitally Lower cost to ser
Slide 44: Next level service, efficiency and stock flow
Next level service, efficiency and stock flow Rightsizing stores to drive operational value and deliver a better customer experience Next Level Sainsbury’s February 2024 More Argos, more often
Slide 45: Deepening supplier partnerships
Deepening supplier partnerships Faster, more efficient processes and technology More automated end-to-end product flow Digital, marketing and loyalty capabilities Next Level Sainsbury’s February 2024 More Argos, more often
Slide 46: Save and invest to win
Sainsbury's Breakout Save and invest to win
Slide 47: Save and invest to win
Save and invest to win Save £1 billion and invest in transforming our capabilities —taking another big leap forward in efficiency, productivity and customer focus, continuing to build a platform for growth ¢ £1 billion of structural cost reduction ° Well-invested technology platform protecting, comp
Slide 48: Strong track record of delivering savings and driving efficiencies
Strong track record of delivering Sainsbury's savings and driving efficiencies Operating costs: savings and inflation £0.6bn £0.5bn Op cost Cost Op cost Cost inflation savings inflation savings 3 years to 19/20 3 years to 23/24 Sainsbury ple Next Level Sainsbury’s February 2024 Cost savings & SG&A /
Slide 49: Further structural opportunities, upside in automation and productivity
one Sainsbury's Further structural opportunities, upside in automation and end-to-end productivity £1.3bn £1bn Productivity > Automation and technology Structure and proposition 3 years to 23/24 3 years to 26/27 Sainsbury ple Next Level Sainsbury’s February 2024 Save and invest to win a
Slide 50: Key cost saving programmes
Key cost saving programmes End-to-end operating model * E2E process optimisation * Space and range efficiencies * Supermarket productivity * Convenience operating model * Groceries online efficiency Profit Logistics protection operations * Shrink reduction * Expert partnerships * Returns and waste *
Slide 51: Structure and proposition
Structure and proposition Save and invest to win
Slide 52: Structural: consolidation & automation of GM distribution network
A ° ° Sainsbury's Structural: consolidation & automation of GM distribution network General Merchandise distribution network Current network Integrated Physical automation: Th Wi . hnol automated network uses robotic technology to perform warehouse tasks Argos I ea Sainsbury’s and Argos ie az | aml
Slide 53: Intelligent automation: saving costs and improving customer experience
. . . . . Sainsbury's Intelligent automation: saving costs, improving customer experience and simplifying processes Simplified customer and Automated identification of Optimised date checking colleague interactions on-shelf stock gaps and product markdown Task automation — Live Ambient Grocery - Tri
Slide 54: Productivity
Productivity Save and invest to win
Slide 55: End-to-end Food: productivity savings across our value chain
Sainsbury’ End-to-end Food: productivity savings “mee across our value chain Connecting upstream ...to end-to-end Delivering : decisions... operational impact... productivity savings | * Labour ny | L__Iav ay * Logistics ama ' rome * Shrink and waste Range Buy Move Sell * Working capital Sainsbury p
Slide 56: Productivity savings across our estate
tk . Sainsbury's Productivity savings across our estate mr = HH Buy Move Sell Supplier productivity Logistics productivity Labour productivity Bil tt . sey Sainsbury ple Next Level Sainsbury’s February 2024 Save and invest to win ea
Slide 57: Example: Pop in and out store cluster
Example: Pop in and out store cluster Trial in Chatham store 1. Simplified range 2. Increased capacities 3. Fewer deliveries Sainsbury ple Next Level Sainsbury’s February 2024 Sainsbury's Strong results Now rolling out learnings across full 90 store cluster ° Reduced waste * Logistics efficiencies =
Slide 58: Save and Invest to Win
Save and Invest to Win Save £1 billion and invest in transforming our capabilities —taking another big leap forward in efficiency, productivity and customer focus, continuing to build a platform for growth ¢ £1 billion of structural cost reduction ° Well-invested technology platform protecting, comp
Slide 59: Key cost saving programmes
Key cost saving programmes End-to-end operating model * E2E process optimisation * Space and range efficiencies * Supermarket productivity * Convenience operating model * Groceries online efficiency Profit Logistics protection operations * Shrink reduction * Expert partnerships * Returns and waste *
Slide 60: Transforming our capabilities
Sainsbury's Breakout Transforming our capabilities
Slide 61: Save and invest to win
Save and invest to win Save £1 billion and invest in transforming our capabilities —taking another big leap forward in efficiency, productivity and customer focus, continuing to build a platform for growth ¢ £1 billion of structural cost reduction ° Well-invested technology platform protecting, comp
Slide 62: Our single enterprise roadmap accelerates what we do today
. . Sainsbury's Our single enterprise roadmap accelerates what we do today Invest for Next Level Invest to Compete Invest to Protect How: @ 4 @ << (Cc ? So QS Streamlining and Efficient & intelligent Maximising simplifying customer centricity existing platforms Sainsbury ple Next Level Sainsbury’s F
Slide 63: Technology capability will enable our next phase of growth
Sainsbury's Technology capability will enable our next phase of growth Safe and secure for our Fit for the future (7) customers Core systems colleagues Next Level can rely on Sainsbury's powered by technology on stable and secure Digital plug and play platforms propositions Agile and flexible iw) eC
Slide 64: Spending more on change, delivering on cost and efficiency
. Sainsbury's Spending more on change, delivering on cost and efficiency Spending more on change Improved productivity Improving 50 ; £12.00 | returns we Sainsbury’s hourly paid retail rate £ >90bps improvement? Sainsbury’s labour costs/sales % 3 years 3 years Qi Q2 Q3 Q4 | Qi Q2 Q3 Q4 Qi ga QO to 2
Slide 65: Streamlining and simplifying our technology infrastructure
Sainsbury's Streamlining and simplifying our technology on infrastructure Al driven supply chain forecasting [Tt See oc see By we esr Optimise sales, waste and stock equation through accurate real-time forecasting Sainsbury ple Next Level Sainsbury’s February 2024 Real-time processing, where it matt
Slide 66: Using intelligent technology to benefit customers and efficiency
Sainsbury’ Using intelligent technology _ OW? to benefit customers and efficiency eter Sota customer centricity Seamless, personalised and efficient checkout experience * Customisable checkout screens increasing relevancy and experience * Integrated loyalty across all checkout touchpoints * Remote m
Slide 67: Simplifying and reusing platforms and systems unlocks more value
Sainsbury's Simplifying and reusing platforms and = systems unlocks more value Pe Single GM digital platform Single Food digital platform habitat® Tech’ these deals out Be mine a2 Reduce run and development costs whilst increasing speed to market for digital features Sainsbury ple Next Level Sainsbu
Slide 68: Technology in stores freeing up colleagues to deliver customer service
Technology in stores freeing up colleagues to deliver customer service Next Level Sainsbury’s February 2024 Save and invest to win we
Slide 69: Technology capability will enable our next phase of growth
Sainsbury's Technology capability will enable our next phase of growth Safe and secure for our Fit for the future (7) customers Core systems colleagues Next Level can rely on Sainsbury's powered by technology on stable and secure Digital plug and play platforms propositions Agile and flexible iw) eC