Sainsbury's has revealed that annual general merchandise sales have reached £1bn for the first time, following a bumper Christmas in which year-on-year sales were a third higher.
Cookware and electricals drive growth
Cookware sales over the year were up by 16%, helped by well presented own brand ranges such as Sainsbury's Cooks Collection. Small electricals also rose strongly with growth of 21% helped by the popularity of tablet computers at Christmas and a reduction in competition following the collapse of electricals specialist Comet. Overall general merchandise sales increased by up to three times the pace of food during the year reflecting Sainsbury's creation of stronger non-food offers instore and increased customer usage of click & collect.
Further growth set to come
Sainsbury's is committed to developing its non-food offer further by expanding both the size and the scope of its offer to meet evolving customer demand. Currently only 31% of the population is within a 15 minute drive of a Sainsbury's with a full (15,000 sq ft+) non-food offer. Direct sourcing will be key for Sainsbury's to react better to customer trends with offices in Shanghai, Hong Kong and Bangladesh enabling it to build more effective relations with suppliers.
Stronger non-food helps drive customer spend
Commenting on Sainsbury's approach, Roger Burnley, managing director for general merchandise, clothing and logistics said:
"Rather than just add line after line to the range we’ve been careful to ensure that our famous brand values of quality and great value have shone through in everything we sell and we have been very successful in identifying and adapting to changing shopping habits. We’ve also put real focus on areas that complement our unrivalled heritage in fresh food such as cookware and homewares. This gives our customers confidence when they shop with us.
"We know that customers who buy from our non-food range spend more with us overall and the fact that we are still able to expand the range to even more stores shows the huge potential for Sainsbury’s.”
Increasing opportunities for suppliers
Besides continuing to focus on enhancing the depth and relevance of its ranges to shoppers, Sainsbury's has much potential to drive sales by encouraging core grocery shoppers to cross shop the offer. For suppliers it is important to stay close to Sainsbury's strategy, taking advantage of Nectar data to understand the Sainsbury's shopper and staying up-to-date with how Sainsbury's varies its non-food offer by store size and location.
Want to know more?
Don’t miss the Sainsbury’s Trade Briefing 2014, taking place on 28 January in London, to hear the latest trading update and development plans from Justin King and the senior executive team...More >>