Dow Jones, Nasdaq, S&P 500 weekly preview: Big earnings week on tap after pullback
Sainsbury’s recent earnings call for Q1 2025 highlighted a robust performance in its grocery segment, with sales increasing by 5% despite challenging comparisons. The company, currently valued at $9 billion by market capitalization, reiterated its full-year guidance, expecting a retail operating profit of £1 billion and targeting at least £500 million in retail free cash flow. Sainsbury’s stock price saw a modest increase of 0.44%, reflecting investor confidence in its strategic direction and market position. According to InvestingPro analysis, the stock appears undervalued based on its proprietary Fair Value model.
Key Takeaways
- Sainsbury’s grocery sales rose by 5% in Q1, with a two-year growth of 10%.
- The company maintained its full-year profit guidance at £1 billion.
- Sainsbury’s stock price increased by 0.44% following the earnings call.
- The company is focusing on premium products and technology investments.
- Sainsbury achieved its highest market share since 2016.
Company Performance
Sainsbury’s demonstrated resilience in a competitive grocery market, posting a 5% growth in grocery sales for the first quarter. This performance builds on a two-year growth trajectory of 10%, underscoring the effectiveness of its strategic initiatives. With an overall Financial Health Score of "GOOD" from InvestingPro, the company continues to expand its market share, reaching its highest level since 2016, driven by a strong value proposition and customer satisfaction. The company maintains strong financial metrics with a 1.78% revenue growth and healthy cash flow generation.
Financial Highlights
- Revenue growth in grocery segment: 5% in Q1
- Two-year grocery sales growth: 10%
- Full-year retail operating profit guidance: £1 billion
- Targeted retail free cash flow: £500 million
Outlook & Guidance
Sainsbury’s reiterated its commitment to achieving a retail operating profit of £1 billion for the full year. The company is also focusing on generating at least £500 million in retail free cash flow. Looking ahead, Sainsbury remains optimistic about growing grocery volumes ahead of the market and maintaining a competitive pricing strategy. Analyst consensus from InvestingPro supports this outlook, with expectations for continued growth in the coming fiscal year. Get access to the full Pro Research Report for comprehensive analysis of Sainsbury’s growth prospects and market position. Despite being cautious about the general merchandise market, the company anticipates continued seasonal sales if favorable weather conditions persist.
Executive Commentary
CEO Simon Roberts highlighted the company’s market-leading growth, stating, "We’re growing volumes faster than the market for our third consecutive year." He emphasized the strength of Sainsbury’s value proposition, noting, "Our value proposition is stronger than ever." Roberts also pointed to the company’s technological advancements, asserting, "We’re building the most advanced retail media platform of its kind in the UK."
Risks and Challenges
- Competitive grocery market pressures could impact margins.
- Inflationary pressures may affect consumer spending power.
- The general merchandise market remains subdued, posing challenges for growth.
- Supply chain disruptions could affect product availability.
- Economic uncertainties may influence consumer behavior and spending.
Q&A
During the earnings call, analysts inquired about the company’s Taste the Difference product strategy, the performance of Argos, and pricing investments. Discussions also covered the capabilities of the Nectar 360 Pollen platform, highlighting the company’s focus on personalized loyalty programs and retail media innovation.
Full transcript - J Sainsbury PLC (SBRY) Q1 2026:
Simon Roberts, CEO, Sainsbury’s: Thank you. A very good morning, everybody, and welcome to our first quarter trading statement covering the sixteen weeks to the June 21. I’m gonna talk briefly about our trading performance, then, of course, Brandon and I will be very happy to take all the questions. So I want to start here with a slide that you may remember we shared our prelims results back at the April. Now these are the priorities that we set out with a clear intention to focus and energize all of our team across the business to accelerate into the year ahead and deliver the next phase of our growth.
So now sixteen weeks into the new financial year, the results we’ve issued this morning demonstrate the strong trading momentum we are driving across all of our brands. We’re doing exactly what we committed to do, sustaining the strength of our competitive position in grocery and growing market share. In fact, we built further on our strong competitive position during the quarter, improving our prices against all competitors and consistently delivering our winning combination of value, quality, availability, and service. As a result, our food business continues to go from strength to strength. We’re growing volumes faster than the market for our third consecutive year, and we’ve achieved our highest market share since 2016.
And we’re making good progress with our plan to bring the best of our food offer to more customers with seven new convenience stores and two new supermarkets opened during the quarter. Now if you’ve been into our stores or shopped online recently, you’ll have seen that we’re going further and faster with our plan to deliver leading product innovation, particularly through Taste the Difference, and our customers are really buying into this. At the same time, we’re scaling our personalized loyalty program to fully optimize how we deliver even more great value through nectar prices. And all of this is underpinned by the investments we’re making in technology to drive efficiency, enhance our platform for growth, and support the delivery of our £1,000,000,000 cost saving target. This is a vital point of difference for us as we continue to strengthen the competitive advantage we’ve built.
Now today, we’ve reiterated our full year guidance of around a billion pounds of retail operating profit and at least £500,000,000,000 of retail free cash flow. As we discussed at the prelims in April, this guidance allows us to continue to make balanced choices and provides the capacity to navigate the environment around us as we travel through the year ahead and deliver on our next level Sainsbury’s commitments. So turning now to our sales performance for the quarter. We continue to drive strong momentum in grocery, growing sales by 5% against a particularly tough comparative. On a two year basis, grocery sales were up 10%.
We delivered good volume growth with a slightly higher rate of inflation coming through across the industry as we sold for increased cost pressure on our cost basis and those of our suppliers. August grew sales by 4.4% ahead of a subdued general merchandise market, helped by warm and dry spring weather and against a weak comparative. Now you can see here the strength of our grocery business, outperforming the market again this quarter and ahead of our key competitors. And if you look at the chart on the right hand side of this slide, you can see clearly that we’re delivering this sustained volume growth against a tough comparative with very strong two year outperformance. We’re consistently delivering on our winning combination of value, quality, availability, and service.
And this drives our confidence in maintaining this momentum, and we expect to continue to grow grocery volumes ahead of the market this year. Now we all know there’s been a lot of noise in the market in recent months, and there are a number of moving parts in the mix. Across the market, everyone has raised their game when it comes to delivering value for customers, and marketing activity has been ramping up to amplify key value messaging. But at the same time, operating cost inflation is working its way through the system. And so it’s a very dynamic market at the moment.
Within all the noise, we’re very pleased with where we are and the momentum we have. Our value proposition is stronger than ever, and we’ve improved our price position against all competitors this quarter, as you can see. We’re now offering customers even more opportunity to save on the items they buy most often through the biggest Audi price match commitment in the market on around 800 products and through nexar prices on over 9,000 products. And it’s clear that customers are really noticing. Our value for money customer satisfaction measures are now at the highest level they’ve ever been.
Taste the difference has been at the center of our strategy to put good food back at the heart of Sainsbury’s and our reinvigorated passion for innovation. It’s a real point of difference for us with a significantly higher proportion of our sales coming through premium private label than competitors. And we’re continuing to make bigger market share gains than any other retailer in this space. We’re delivering another strong performance in Taste Difference this summer from really high quality essentials, like our Taste of Difference strawberries, perfect to enjoy as we come into the Wimbledon season, and exciting new innovations in our deli and picnic ranges, which have already been very popular with customers. We grew sales by 18% this quarter, which was on the back of two years of very strong growth.
And in fresh fruit, we’ve grown taste the difference by almost 50% over the last three years. Now however customers want to shop with us, whether it’s in our supermarkets, convenience stores, or online, Our colleagues are totally focused and are doing a brilliant job in delivering the very best experience we can. Across all our channels this quarter, we’ve seen strong improvements in customer satisfaction with standout scores for the availability of products, appealing promotions, and value for money. And we’re really proud of the service and experience we’re now consistently delivering. Our customer satisfaction metrics are testament to the commitment and dedication of all of our colleagues and team.
And at the same time, our suppliers and farmers have also been doing the best job in ensuring we maintain the highest levels of supply service and availability. So you’ve heard me say before that to win in this industry, we have to show up across all these key components of value, quality, availability, and service day in, day out, consistently delivering on the things that matter most for customers. And you can see on this slide that when we do that, we become the first choice of food for many more customers who then choose Sainsbury’s for their big trolley shops, as you can see on the right hand side of this slide. This is the measure that is really key here. We have nearly a million more loyal primary customers than we had four years ago, a huge step on versus our key competitors over the same period of time.
Now our net to loyalty program has been truly transformational for our grocery business, and net to prices has been a key driver of the increasing customer perceptions of our value and of our primary customer growth. The strength of our loyalty platform powers Nektar three sixty, our market leading loyalty customer insight and retail media business. Now we recently announced that we’re taking another big step forward with this with the launch of Nexa three sixty Column, the most advanced retail media platform of its kind in The UK. Column will be a game changer in terms of how easily brands and agencies can access the full potential of our retail media network to run omnichannel campaigns and, importantly, be able to measure their effectiveness. Built in house, Pollan seamlessly brings together all of our existing capabilities in one place, a single platform for audience audience insights, media planning, and activation, and measurement.
It will set us apart in the client service that we can provide, delivering an enhanced experience which is quick and simple to use and with market leading measurement of performance available throughout. Now we’re really proud of what we’re doing here with Colin, and we’re excited about its launch later this year. It will be a huge unlock of our potential to go much further in this space, and we’re extremely encouraged by the phenomenal response we’ve had from brands, agencies, and partners so far. Now building on early progress in quarter four, we’re pleased to have driven further improvements at Argos this quarter, delivering sales growth, traffic growth and volume growth as we showed up well for customers, particularly when the weather was warmer and drier in comparison to a poor start to the summer last year. And we’re making good progress too with our more Argos, more often strategy.
We’re well underway with the strategic choices we laid out in April, which are all about improving the digital journey, strengthening our value proposition, increasing our desirability and awareness of the ranges that we have at Argos, and further expanding our stop loss ranges. However, of course, it is a challenging backdrop. The general merchandise market is highly competitive and remains subdued as customers continue to spend carefully on discretionary items. There’s also been a big increase in activity from some of the global online retailers, refocusing their efforts and investment on The UK, so it’s a very competitive market. And we’re now facing into tougher sales comparatives in the second quarter as we’re up against a period when we run a lot of clearance activity last year.
We know there’s a lot more to do here, and this team now leading Argos are very firmly focused on strengthening our fundamentals and delivering a stronger sustained performance over time. And so in summary, we’re really pleased with where we are at this point in the year as we deliver against the priorities that we set out for the year in April. We’re also encouraged by the level of strategic and operational progress being achieved right across the business and with our strong and sustained momentum relative to the market. We are ready to continue building on this with a particularly strong plan this summer across value, quality, innovation, and service at both Sainsbury’s and Argos. And our team is more joined up than ever, focused and connected.
We are ready to seize the opportunities ahead as we prepare for the second half. So thank you for listening, and we’ll now hand over to q and a.
Moderator/Operator: We will now go to q and a. If you would like to ask a question, please use the raise hand feature at the bottom of your screen. Alternatively, if you have dialed in, please press 9 on your handset now. To keep things fair as possible, we ask that you only ask one question. If we get additional time, please rejoin the queue by reraising your hand or pressing star 9, and we will try to get back to you.
The first question is from Manjari Dahar at RBC. Please unmute yourself and begin with your question. Morning, Ajani. Hi, and then morning, Balan. Morning.
Thank you for taking my question. I just had a question on on taste difference, if I may. I see that the growth has accelerated. It’s obviously a strong performance. I just wondered if you could give some color on on sort of how much you think the that acceleration is is your own initiatives and how much is other factors in the market, consumer trends, other players, and how sustainable you think the that that high level of growth could be?
Thank you.
Simon Roberts, CEO, Sainsbury’s: Manjaro, thank you. Look. I think a couple of things to say here. I mean, the first thing is, you know, when we launched Food First back in 2020, we made a very clear commitment at that time we were gonna really power innovation at Sainsbury’s, and we were gonna really build our capabilities back then to make sure that we have, you know, the leading innovation in the market. And what you can see now is four years on, five years on, just the year on year on year progress we’re able to deliver.
Then we’ve got a fantastic team working on product innovation and constantly scanning worlds for the best products that we think our customers will love. And what we can see this summer is another big step on in the innovation. Now the the products that we’ve launched this year, 250 products for the summer, and taste the difference, particularly in, you know, all the food for, you know, outdoor eating at summer, picnics, family gatherings. Customers are loving them. And what we’re seeing is, therefore, we’ve grown Taste Difference sales in fresh food in the quarter by 20%, 18% overall for Taste the Difference, and fresh food sales are up 50% over the last three years.
So a real step on in performance. And we think there’s a lot more to come here. You know, we’re really seeing customers are buying into this innovation, but at affordable prices, and that’s one of the things that really stands, takes the difference out from from much of the competition that’s out there. So great momentum, more definitely to come in this space. And now I was looking at the plans for the rest of this year in terms of innovations.
We’re going to autumn and Christmas, and, you know, there’s really, really strong New thinking, new products coming our way. In terms of more broadly in the market, look, I think, you know, a lot of the market have come on board to to really focus on premium. It’s, you know, it’s an area where customers spend more time at home, eat out less. That’s clearly something that, you know, most retailers are focused on, but we really are seeing market leading growth in this space, and it’s it’s something we intend to stay very focused on.
Moderator/Operator: Great. Thank you.
Simon Roberts, CEO, Sainsbury’s: Thank you.
Moderator/Operator: The next question is from Isabelle DeBrova at Morgan Stanley. Please unmute yourself and begin with your question.
Simon Roberts, CEO, Sainsbury’s: Hello, Isabelle. Good morning.
Moderator/Operator: Good morning. Thank you for taking my questions. I had a question on Argos. Could you give us some color on what the like for like for the sales growth would have been excluding seasonal outdoor gardening sales for the quarter so that we can understand what the weather impact was? And then as we go through the year, I guess, given that the weather happened earlier this year than it did last year, this could mean that there is less discounting on the market.
But then on the flip side, you mentioned the market is very competitive. We have various data sources telling us that the consumer is slowing. So would your expectation be that all of these tailwinds from the weather, from dollar, what have you, may essentially get passed on to the consumer and the environment stays very competitive and deflationary for Argos.
Simon Roberts, CEO, Sainsbury’s: I bet. Thank you. Well, shall I shall I maybe try to give you some sense of how we’re feeling about what’s driving the performance in the first quarter and then maybe plan it in terms of how we look at over the rest of the year? So, look, I think couple of things to say here. I mean, as you’ve already said, you know, the the general merchandise market is intensely competitive and highly promotional, and we definitely expect that to continue.
Now that being said, you know, we’re encouraged with the performance in the first quarter. Sales up 4.4% at Argos. You know? And specifically to your point, when we think about, you know, the composition of those sales, clearly, Argos is a very seasonal business. We’ve we’ve always said that.
And we were up against a particularly weak comparative last year when the weather just didn’t didn’t go our way at all in the first quarter of the last financial year. So when we look at, you know, the overall performance, what I would say is, you know, categories like outdoor, garden furniture, you know, have performed particularly strongly. But big ticket items haven’t been so strong. There was a euros last year, which meant we sold a lot of TVs last year. That obviously hasn’t repeated this year.
So when you look at it in the round, we’d estimate around a third of the total sales growth in quarter one is attributable to both the the seasonality that came forward earlier. And, also, I should mention the Nintendo Switch as well, which was an important launch in the period. So that’s how we think about the breakdown of seasonal performance. And just within the categories, Isabelle, to your question, obviously, garden furniture, as I say, strong. But some other elements, garden hardware, as I say, big TVs, you know, had a tougher period year on year.
And then when we think about, as we look ahead, Bana, do wanna do wanna come on at one?
Bhanad, CFO, Sainsbury’s: Look. We’ve held the guidance flat year on year, but there’s a few things to note here. Look. If this summer continues as as it is, sales will continue, and we’ll continue to be competitive on that. So it’s a very competitive market.
It’s subdued at the moment, and and we’re feeding that as well. But, you know, let’s see how the summer progresses, see how August progresses. The one thing I would say, and Simon talked about it earlier, we’re really working through the strategy at the moment, working through the foundations on that, improving the range, improving the digital journey, improving the customer experience, and that’ll take time. So we’re starting to see sort of early signs of that, but it will take time. So big ticket spend is still under pressure in August.
Simon Roberts, CEO, Sainsbury’s: Yeah. Great. And I thought maybe just last point to make as well as your question is, obviously, you know, if the weather continues good, then it will continue to drive, you know, the seasonal performance. I mean, reality is that last year, summer didn’t really kick off until July, running in reality halfway through the summer. So better weather in the period ahead would obviously help drive further seasonal sales.
Moderator/Operator: Next question is from Sreedhar Maham Kali at UBS. Please unmute yourself and begin with your question.
Simon Roberts, CEO, Sainsbury’s: Shrida, good morning.
Sreedhar Mahamkali, Analyst, UBS: Hi. Good morning. Thanks for taking my questions. Maybe just to go to recalibrate guidance, Simon. You’re reiterating £1,000,000,000, and you’ve talked about capacity to invest.
Maybe just two elements of the question here. One, how do you characterize the market and your investment in the period? Was a was there anything noticeable in the way the market was competing, versus what you had planned out? And and, clearly, there is an element of phasing here. You’ve talked about it.
Can you help us understand the moving parts so that we can have a better sort of first half, second half sort of numbers in the in the models? Thank you.
Simon Roberts, CEO, Sainsbury’s: Okay. Sure. Should should I talk a bit to guidance and kinda how the markets behaving to your question? And then maybe, Bhanad, we can talk about how we think about first half, second half. So, look, I think, look, clearly, this is a trading statement.
We’re sixteen weeks into our financial year. And so, you it’s early in the year, isn’t it? Still much of the summer still to come. I think, looking in terms of how we characterize where we are, I we would say that pretty much we’re exactly where we expect it to be on both our value and market position at this point in time. You know, I think it’s really clear.
We said this in April. There’s clearly a lot going on out there, and everyone is is raising their game. You know, I think there’s clearly the combination of, you know, an intensified focus on value. Know, a lot of brands are increasing their marketing investment at the moment to make sure that value cuts through. But there’s also a lot of cost pressure out there still that needs to be passed on.
And, you know, inflation is moving through the system. Know, quite a bit’s happened. There’s still more to happen. And that’s the reason why, you know, as you said, we said at the start of the year that we were committed to staying the strength of our value position. We spent four years building it.
And you can see here the benefits of that as we’ve come through the first quarter, the biggest market share gains since biggest market share performance since 2016, you know, the most competitive we’ve been, you know, the best customer satisfaction metrics on value. And, you know, we’re very focused on making sure we maintain that over the rest of the year, and hence, the reason for ensuring we have the capacity, as we said, in April to be able to navigate whatever happens over the period ahead. And I think, you know, it’s just in terms of how we how we think about where we are. You know, the market, you know, is is is behaving rationally. You can see our relative strength on value this morning.
But there’s no doubt there’s more focus on value, and there’s more focus on making sure customers get to see the value in the offer. Anna?
Bhanad, CFO, Sainsbury’s: Yeah. Great. So great question, Sridhar. You you wouldn’t expect us to update guidance sixteen weeks into the year on that, but we are pleased with what we’re seeing in q one and the performance and how it’s playing out for us for us on value and on market is exactly where we expected it to play out. And what I would say on profits, we we talked at year end that we’d expect them to be more h two weighted.
There’s a few reasons for that. The first one is they come online, the rebalance of the stake in the new stores, and we’ve got some disruption happening in H 1. And the second thing is this EPR and tax that we talked about, that needs to be booked in H 1. That’s the accounting rules that have come clear in the last few weeks. You can see that all being booked in H 1, so that’s about an incremental 30,000,000 or so booked in H 1.
But it’s a timing, and so we’re still holding our guidance for the year.
Sreedhar Mahamkali, Analyst, UBS: That’s very helpful. Thank you.
Simon Roberts, CEO, Sainsbury’s: Thanks, Rita.
Moderator/Operator: The next question is from William Woods at Bernstein. Please unmute yourself and begin with your question.
Simon Roberts, CEO, Sainsbury’s: Hello, William. Good morning.
William Woods, Analyst, Bernstein: Hi. Good morning. Hi, Simon. Hi, Barnard. So I just wanted to build on Trudeau’s question, really.
Obviously, we’re kind of six months into the price investment cycle now. How much do you think these price investments are kind of noise in promotions and or or marketing versus a kind of real structural change in the pricing landscape? And I suppose just is there any change to anything that you’ve seen since we maybe spoke your full year results? Thanks.
Simon Roberts, CEO, Sainsbury’s: Thanks a lot. So let me let me just try to to build on what we’ve said. So, look, you saw in the slides I shared at the top of the of the call that we’ve actually strengthened our relative price position against competitors through the first quarter of the year. And I think, you know, that’s a function of two things really. One, the strength of our offer, the combination of now the biggest Audi price match in the markets, you know, 9,000 products on next prices and everyday low prices.
So what we’re seeing is as the combination of this focus on value continues to play out, but, of course, inflation gets passed through in the market as well, that we’re able to make sure that we continue to sustain the strength of the value position that we have. I think, you know, in terms of what what’s been happening, as you say, there’s there’s a lot of noise out there. One of the things that we have we have stayed very focused on, and we said this right from the beginning, Our value investment has always been focused in the center of the plate, the key categories, the key products that customers buy most often. And that has been single biggest determinant of the shift for us in customer value perception and the single biggest driver of the reason why a million more primary customers are now shopping at Sainsbury’s, which is the confidence in those products at the center of the plate that that customers are now feeling, you know, really sure about, and then then shopping across the rest of the store. Obviously, every brand is following their own, you know, relative strategy on value.
But for us, that has been absolutely game changer. Because, you know, when you’re in fruit and veg, or when you’re in dairy, when you’re in meat, fish, and poultry, you know, the key areas at the center of the basket, that’s where customers have got real value now, and we’ve been, you know, absolutely determined to stick to and continue to drive that plan forward. In terms of, you know, as the year plays out, you know, I think we’re very early in the year, as Brandon and I have both said. You know, there are certain moments in the year out there, know, the back school period in September, they’re running to peak. And there’s still a lot of this year to happen, which is why it’s very important we maintain the capacity we need to ensure we can sustain the strength of our value position.
You can see the momentum we have in the business. We’re encouraged by it, but we’re not at all complacent with it. There’s a lot more to do. We’ve got a very focused plan this year. And above all else, we’re gonna make sure that customers see more and more reasons to be confident and trust our value position, which is which is what we’re seeing really underpinning our position.
The marketing effort, I think, is, you know, to be expected as as value focus increases. That was always gonna be more above the line. You saw at the top of this call, we shared our latest, you know, activity. We’re out on both value and innovation, and it’s really working at the moment. Thanks, Will.
Moderator/Operator: Just a reminder, if you would like to ask a question, please use the raise hand feature at the bottom of your screen. Alternatively, if you’ve dialed in, please press 9 on your handset now. The next question is from Francois Degaard at Kepler Cheuvreux. Please unmute yourself and begin with your question.
Simon Roberts, CEO, Sainsbury’s: Francois, good morning. Good morning. Thank you for taking my question. Fine. Well yourself.
Good to Agos thank you. With Agos, what proportion of sales do stockless branches represent? And for the rest of the business, how do your stocks level compare to your historical benchmarks? Thank you. Okay.
So just, I guess, try and get behind your question. The key the key point here really is that, you know, we’ve had a encouraging start in our BOSS delivering sales of 4.4%. So if the kind of question behind your question is, you know, how are we feeling about our stock levels at the moment, particularly on seasonal products, we’re comfortable about where we are. You know, we’ve obviously bought the, you know, a quantity of stock to make sure we could satisfy the season. So the point I made before, you know, we’ve had we’ve had May and June.
There’s still July and August to come, and we’re well set to make sure that we can, you know, continue to give good availability, but also manage our stock levels in the place that we need to be on, particularly the seasonal areas. So overall, you know, I think we would say encouraging start at Argos, weak comparative last year. Obviously, the comp gets significantly more as we cleared a lot of clearance out last year. And so we’re gonna keep very focused on making sure we deliver our Argos plans through the coming weeks and look if the sun continues to shine, then that will present opportunities to make sure we can take advantage of that. More broadly to your question, stopless is playing a really important part as part of our more Argos more often plan.
We know that customers love Argos, but they want to find a wider assortment of products on the Argos platform. And that’s why we’re bringing more brands, more product ranges, you know, in the thousands as we add more content to the Argos platform. And we make quite a quite a big move forward with this last year, and we’re continuing that momentum this year, adding more brands, adding more products, and making sure that when customers shop for Argos, they can get the full range of both categories, assortment, and brands that they want to find. And we’re finding more and more that brands want to come on to the Argos platform, which is also really encouraging too. So a building picture here for Answara and one that will be a really important part of delivering the more Argos, more often plan.
Thank you.
Moderator/Operator: Our final question is from Isabelle DeBrebba at Morgan Stanley. Please unmute yourself and begin with your question.
Simon Roberts, CEO, Sainsbury’s: Isabelle, good morning again.
Moderator/Operator: I’ve reentered the queue because it was only one question.
Simon Roberts, CEO, Sainsbury’s: No problem.
Moderator/Operator: I’m actually very interested in the Nectar three sixty Pollen. Yeah. Could you give us some examples of how you’re going to incorporate AI in the platform? And then, also, could you give us some examples of what features this platform has which make it differentiated versus what else is on the market to make it the the most advanced unified retail media platform so that we can understand how it compares to the peer group as well?
Simon Roberts, CEO, Sainsbury’s: Yeah. No problem at all. Thanks for the question. It’s it’s a really important area for us to focus on the call actually because, you know, I would say that we’ve had we’ve had a phenomenal response from brands and partners and agencies to NetSuite three sixty. The team took this to the recent account event, and the response was way beyond actually what we expected.
And so why is that? And maybe if I can just try and unlock a bit if, you know, if you’re a brand or an agency, how how this is gonna work for you. So we just, you know, if we just take an example, you know, I’m a big brand or an agency working for a big brand, and I want to build an omnichannel marketing campaign. I’m gonna be able to log on to Pollen, and I’m gonna be able to feed into Pollen the marketing brief and then support it, as you say, with AI. Poly will then support the decision making of which channels to use, where the campaign will be run, and that could be media within within the, you know, the media network.
It could be outside St. Louis or Argos, and then we’ll help build towards the targeted audience. And then it it will then, with AI, help set up operationally the campaign as well. So effectively, fast access into a platform, navigating how they how the campaign wants to launch, and then operationally building the campaign, all of that powered by AI. By the way, should add, we we build up this in house.
It’s been a really, you know, really strong example of us working across boundaries. Net to three sixty digital technology, DNI, we’re working together in a our data analytics capability to build this in a really focused way. And then once activated, it will measure attribution and reporting and also take care of invoicing and billing as well. So really bringing an unrivaled platform for brands to be able to move with real agility, but also speed to execute their marketing campaigns. And we go live with this, in the autumn.
So lots of, lots of excitement and lots of opportunity for brands and partners and clients to be able to access that capability. Thank you. And just a real shout out to our team actually on this who have worked, you know, in a really determined way, you know, led by, as I say, the, you know, the the huge focus in x three sixty and our technology teams to build this in house, and something we, you know, really wanna make sure, you know, really drives a real difference for us.
Moderator/Operator: Great. Mister Chen, is there any more questions? Question.
Simon Roberts, CEO, Sainsbury’s: Oh, great. Yeah.
Moderator/Operator: One further question from Shreedhar Mahamkali at UBS. Please unmute yourself and begin with your question.
Sreedhar Mahamkali, Analyst, UBS: Hi again, Shreedhar. Hi, Simon. Sorry to come back in the queue. Just one follow-up, please, on August. And, Simon, you you referred to tougher comps in q two to come.
But just help us understand the shape a little bit. I think comps are tough, admittedly, relative q one to q two, but they were last year driven by markdown sales because of poor q one. So we we write in the margin comps are easier, and hence, if sales remain healthy, back to your point about summer weather, July was trading still to come. We shouldn’t see the level of markdown activity relative to q two last year. Is that a reasonable assumption?
Simon Roberts, CEO, Sainsbury’s: Yeah. No. Thanks, Shridhar. So let’s just let’s just, go through quarter one, quarter quarter two last year. So as you say, quarter one last year, we had a, you know, very poor weather period, which meant we didn’t see the seasonal sales that we’ve been able to capture this year.
It also meant that there was a building level of stock coming through quarter one into quarter two that we then, as you say, needed clear in the second quarter last year. What effect did that have? But it definitely drove volume, and you can see when you look at the comps last year, we had a relatively stronger sales quarter in quarter two as we cleared all that seasonal product. Was the right thing to do, know, to clear clear through on the seasonal product and get a clean edge into quarter three. So that gave a a volume upside in the second quarter last year, but a margin a margin impact.
So as we come into the second quarter of this year, what we’re signaling is that, you know, we’re we’re encouraged with the sales performance of 4.4%. As I said earlier, you know, we’ve had some benefit from the weather. But, also, I should stress the underlying strength of Argos is improving. You know, the work the team are doing to make sure we get availability, to make sure that we get an improved digital experience, that’s really starting to come through. And we expect that to continue, but we we, you know, we also know that the market is incredibly competitive, and that’s the point I would just add.
You know, particularly the global digital players have seen, you know, some of the recent events, particularly around tariffs, for example, an opportunity to really step up their digital PPC investment into The UK market. And so as we come into quarter two, we’re gonna have to be very, you know, very focused on making sure our offer is strong in the context of the market. And that’s why, you know, we should know that the comparatives on sales are tougher as we come into this quarter, and why we need to make sure that the offer shows up really well to take advantage of the, you know, the both the weather and the customer mindset out there so that we can navigate what is still a highly competitive market.
: Okay. Thank you.
Simon Roberts, CEO, Sainsbury’s: Thanks, Shweta.
Moderator/Operator: That was our final question. I will now hand back to Simon Roberts for closing remarks.
Simon Roberts, CEO, Sainsbury’s: Well, I know we’ve got we’ve got a few people on holiday this week. So thank you to everyone for joining the call that’s been able join. I hope that’s been a useful call. We really appreciate your questions. Look.
As I said earlier, we’re really pleased about the strong start to the year we’ve had, the momentum that we’ve got. And as you can see, we’re exactly where we set out to be back in April, both on value and on our market position. So a strong performance coming through the first quarter. Well set for the summer, and we very much look forward to, obviously, continuing to deliver our plan and to catching up with you through the summer and, of course, our interim results in November. So thanks, everybody, and I hope you have a great summer.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.