Sainsbury's

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J Sainsbury plc is the parent company of Sainsbury's Supermarkets Ltd, commonly known as Sainsbury's, which is a chain of supermarkets in the United Kingdom. The company is listed on the London Stock Exchange. The J Sainsbury group also has interests in property and banking.

Sainsbury's Supermarkets

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Sainsbury's was established in 1869 when John James Sainsbury and his wife Mary Ann opened a store in Drury Lane in Holborn, London. Until 1973 the company was still wholly owned by the Sainsbury family, however it was then floated in what was at the time the largest ever flotation on the London Stock Exchange. Today the family retain approximately 30% of the shares. Sainsbury's is a founding member of the Nectar loyalty card scheme, which was launced in autumn 2002 in conjunction with Debenhams, Barclaycard and BP.

In 1987 it took over US chain Shaw's Supermarkets. On 26 March 2004 it was announced that it was selling the chain to Albertsons Inc. for $2.5 billion.

Sainsbury's was for decades the premier supermarket in the UK, it lost this position however in the mid 1990s to Tesco, further slipping to No.3 in mid 2003 behind Walmart-backed Asda. The supermarket chain has yet to recover from this, with profits and sales growth consistently below that of its main rivals. In 2003 it had a turnover of 18,144 million pounds, and a profit of 695 million pounds. It employed around 150,000 people.

The appointment of Sir Peter Davis as CEO in March 2000 was seen as an attempt to regain market position and if he is judged on that aim then he can be said to have failed. During his term Sainsbury's was demoted to third in the UK grocery market. However in his first two years he raised profits above targets and oversaw an almost £2Bn upgrade of stores,distribution and IT equipment.

In 2003 Wm Morrison Supermarkets made an offer for the Safeway group, prompting a bidding war between the major supermarkets. The Trade and Industry Secretary, Patricia Hewitt, referred the various bids to the Competition Commission which reported its findings on September 26th. The Commission found that all bids, with the exception of Morrisons, would "operate against the public interest". As part of the approval Morrisons was to dispose of 53 of the combined group's stores. In May 2004 Sainsbury's announced that it would acquire 14 of these stores, 13 Safeway stores and 1 Morrison outlet located primarily in the Midlands and the north of England. The first of these new stores opened in August 2004.

Sainsbury's use NCR checkout or POS (Point of Sale) equipment, operating Retalix "Storeline" software.

Management changes

At the end of March 2004 Sir Peter was promoted to Chairman and was replaced as CEO by Justin King, who joins Sainsbury's from Marks and Spencer plc. Mr. King was also previously a managing director at Asda.

In June 2004 Davis was forced to quit in the face of an impending shareholder revolt over his salary and bonuses. Investors were angered by a bonus share award of over £2m despite poor company performance. On July 19 2004 Davis' replacement, Philip Hampton, was appointed. Hampton has previously worked for British Steel, British Gas, BT and Lloyds TSB.

King ordered a direct mail campaign to 1 million Sainsbury's customers as part of his 6 month business review asking them what they wanted from the company and where the company could improve. This reaffirmed the commentary of retail analysts - the group is not ensuring that shelves are fully stocked.

On October 18 all store managers gathered in Birmingham where King unveiled the results of the business review and his plans to revive the company's fortunes. This was made public on October 19th and was generally well received by both the stock market and in the media. Immediate plans include laying off 750 headquarter staff and the recruitment of around 3,000 shopfloor staff to improve the quality of service and the firm's main problem: stock availability. At the same meeting Lawrence Christensen, the newly appointed supply chain director and an expert in logistics, highlighted the reasons for availability issues and his plan to address them. Immediate supply chain improvements include the reactivation of two distribution centres.

Banking

In 1997 Sainsbury's Bank was established - a joint venture between J Sainsbury plc. and the Bank of Scotland.

Services offered include car, life, home, pet and travel insurance as well as health cover, loans, credit cards, savings accounts and ISAs.

Property

J Sainsbury's property interests are large, with a separate company within the group responsible for managing the company's existing property assets and the development of new ones (including new stores and other commercial properties).

Sainsbury Family

Several members of the Sainsbury family have been prominent in British public life:

• John James Sainsbury (married Mary Ann Stables)
  • Alan John Sainsbury (1902-1998), son of John's son John Benjamin Sainsbury, a life peer 1962 as Lord Sainsbury
    • John David Sainsbury (1927-), a Tory life peer (Baron Sainsbury of Preston Candover)
    • Timothy Sainsbury, former Tory minister, married to Lady Sainsbury (1932-)
      • Jamie Sainsbury
      • Alexander Sainsbury, son of Timothy
      • Jessica Sainsbury
      • Camilla Sainsbury, daughter of Timothy, married to Shaun Woodward
    • Simon Sainsbury
  • Robert Sainsbury (1907-2000), son of John Benjamin Sainsbury
    • David Sainsbury (1940-), Labour life peer (Baron Sainsbury of Turville)

See Also

• Supermarkets in the United Kingdom
• List of banks

External links

• J Sainsbury supermarket chain website
• J Sainsbury plc corporate website
• Sainsbury warns on profit as it checks out of U.S.; Reuters; March 26, 2004.