J Sainsbury Plc · LSE:SBRY
J Sainsbury — Q3 2021/22 Earnings Presentation
23 slides from J Sainsbury's earnings presentation, January 2022
Slide 1: Q3 Trading Statement 2021/22
Q3 Trading Statement 2021 / 22
Slide 2: Q3 Retail sales growth
Q3 Retail sales growth Total Retail Grocery General Merchandise Clothing sales growth 1 sales growth sales growth sales growth +1.4% Yo2Y +6.6% YoY Yo2Y YoY Yo2Y YoY (1.7)% (2.7)% (5.3)% (11.0)% Yo2Y Q3 21/22 YoY 47.5% (1.1)% (16.0)% Q3 21/22 Q3 21/22 Q3 21/22 (5.3)% (0.1)% Exc. Fuel Fuel Inc. Fuel
Slide 3: Christmas Retail sales growth
Christmas Retail sales growth Grocery General Merchandise Clothing Total Retail sales growth sales growth sales growth sales growth3 +7.7%2 +11.6% YoY Yo2Y +2.4% +6.8% Yo2Y YoY (8.6)% +2.0% +0.8%2 +0.1% (10.6)% YoY Yo2Y (2.9)% YoY Yo2Y Christmas 21/22 1 Christmas 21/22 1 Christmas 21/22 1 Christmas
Slide 4: Supermarket transactions continue to recover
Supermarket transactions continue to recover Supermarket transactions and basket size trends Basket size, £ Transactions, m FY 19/20 FY 20/21 FY 21/22 4 J Sainsbury plc Q3 2021/22
Slide 5: Online demand remains strong
Online demand remains strong Online weekly orders 1 Basket down size 6% 1,000,000 33.0 YoY Supermarket Groceries Online Q3 Q3 900,000 transactions 20/21 21/22 weekly orders 28.0 800,000 700,000 23.0 Items up picked 600,000 18.0 per hour 4% YoY 500,000 (IPH) Q3 Q3 13.0 20/21 21/22 400,000 8.0 300,000
Slide 6: Digital sales significantly ahead of 19/20
Digital sales significantly ahead of 19/20 Total Digital Groceries Online Argos Digital SmartShop Nectar Sales Sales Sales Sales Digital users up 49 % Yo2Y up 92% Yo2Y up 6 % Yo2Y up 126 % Yo2Y Users up 36 % YoY down 15% YoY down 16 % YoY down 24% YoY up 1% YoY 43% 28% 8.7m 18% 85 % 38% 77% 26% 15%
Slide 7: Ahead of the market on a two-year and one-year basis
Ahead of the market on a two-year and one-year basis Grocery volume growth 1 Q3: 21/22 vs 19/20 and 20/21 YoY Yo2Y Total grocers Sainsbury’s Tesco Asda Morrisons Aldi Lidl 1 Kantar Worldpanel division, 12 weeks to 26 December 21, 27 December 20 and 29 December 19. Total Grocery volume growth 7 J Sai
Slide 8: We are delivering on our priorities
We are delivering on our priorities • Better value and innovation • Customer and profit focus • Structurally lower operating • Underpinned by buying • Supporting the core food costs to fuel investment in benefits and lower cost business the core to serve • Cutting complexity and increasing pace of e
Slide 9: Value Innovation Service
• Better value and innovation • Underpinned by buying benefits and lower cost to serve Value Innovation Service 9 J Sainsbury plc Q3 2021/22
Slide 10: Investing ahead of the market in value
Investing ahead of the market in value ASP Inflation of Top 100 products1 Discounters Rest of the Big 4 0 Sainsbury’s Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 1 Nielsen panel data, Top 100 SKUs by retailer, Average Selling Price Inflation YoY
Slide 11: Strongest ever Christmas value position
Strongest ever Christmas value position Sainsbury’s Quality, Aldi Price Match Christmas dinner • Significant volume growth: +23% YoY and +44% Yo2Y 1 • Double-digit market outperformance in invested categories 2 • Value Perception step change: +110bps in Christmas week 3 • Increased secondary custome
Slide 12: Value: Sainsbury's Quality, Aldi Price Match
Value: Sainsbury’s Quality, Aldi Price Match Increased total investment – focus on Fresh and high-volume lines 90% Volume now in Fresh 12 J Sainsbury plc Q3 2021/22
Slide 13: Value: Price Lock
Value: Price Lock We continue to run the biggest EDLP campaign1 Number of SKUs 2,000 1,600 1,200 800 400 0 Sainsbury’s Tesco Asda Morrisons Price Lock Low Prices Low Prices Prices Held Everyday Locked 1 Edge by Ascential data, 05/01/22 13 J Sainsbury plc Q3 2021/22
Slide 14: Value: continued momentum on price investment
Value: continued momentum on price investment Price index vs Aldi Total Price index vs Tesco Total Q3 22 vs Q3 21 1 Q3 22 vs Q3 21 1 improved improved 670bps 80bps Centre of plate2 Centre of plate2 1 Q3 22 vs Q3 21 Q3 22 vs Q3 21 1 improved improved Q4 Q1 Q2 Q3 390bps Q4 Q1 Q2 Q3 130bps 20/21 21/22
Slide 15: Food Innovation: Christmas new product development
Food Innovation: Christmas new product development On track to triple Growth in Taste the Difference Christmas heroes innovation • Taste the Difference sales grew +13% in key Christmas weeks vs two 600 years ago1 New lines in Q3 • Meat, Fish and Poultry TTD +25% • Produce TTD +16% 300 • Bakery TTD +
Slide 16: Customer Satisfaction improvement through Q3 Christmas
Customer Satisfaction improvement through Q3 Christmas Availability 1 Variety1 Q3 21/22 Christmas Q3 21/22 Christmas Value 1 Friendliness 1 Q3 21/22 Christmas Q3 21/22 Christmas 1 Supermarkets customer satisfaction scores, 8 weeks to 25 December 2021 16 J Sainsbury plc Q3 2021/22
Slide 17: Supermarket customer satisfaction ahead of competitors
Supermarket customer satisfaction ahead of competitors Supermarkets Online Customer satisfaction index 1 Customer satisfaction index 1 Sainsbury’s Sainsbury’s Tesco Asda Tesco Morrisons Asda Morrisons Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 20/21 20/21 20/21 20/21 21/22 21/22 21/22 20/21 20/21 20/
Slide 18: Customer and profit focus
• Customer and profit focus • Supporting the core food business • Reduce cost to serve • Improve profit delivery 18 J Sainsbury plc Q3 2021/22
Slide 19: General merchandise category performance
General merchandise category performance Subdued market 1 Total GM Category performance on a 2-year basis Category size Gaming Technology Toys Seasonal and Garden 9% market market market Household Electricals 16% 10% 11% 12% Home and Furniture 19% Consumer Electronics and Technology 38% Toys and Cel
Slide 20: Strategic reduction in promotional participation; focus on margins
Strategic reduction in promotional participation; focus on margins General Merchandise and Clothing Improving margins Promotional days 1 Sainsbury’s GM&C Gross Argos Operating Costs to Sales 200 Margin 150 100 50 0 Q1-Q3 Q1-Q3 Q1-Q3 19/20 20/21 21/22 FY 19/20 FY 21/22 FY 19/20 FY 21/22 Argos Sainsbu
Slide 21: Key metrics
8 key metrics Delivering for customers and driving stronger financial outcomes Operational Financial Grocery market share performance UPBT growth Strong customer satisfaction scores 200bps+ reduction in retail operating cost to sales Maintain strong colleague engagement Dependable retail free cash f
Slide 22: We are delivering on our priorities
We are delivering on our priorities • Better value and innovation • Customer and profit focus • Structurally lower operating • Underpinned by buying • Supporting the core food costs to fuel investment in benefits and lower cost business the core to serve • Cutting complexity and increasing pace of e
Slide 23: Q&A
Q&A