Financial Analysis of J Sainsbury Plc

Introduction

J Sainsbury Plc is a leading retail store in UK which is involved in the business of food, clothing

and general merchandising. The business aims at providing enjoyable shopping experience to its

customer by providing quality and valuable products at reasonable prices. Sainsbury has

expanded its operations in more than 55 countries with the help of its diversified and competent

workforce. The following report aims an analyzing the core business of Sainsbury and its key

sources of financial performance. The study will analyze the financial performance of Sainsbury

by applying financial techniques for year 2014 and 15. The report will also highlight the stock

performance of Sainsbury in relation to its main competitor and overall retail sector of UK.

Furthermore, the report will address the significance of ethical operations and sustainable

strategies for future growth of Sainsbury.

Sainsbury’s

J Sainsbury’s Plc is the second largest retail store in UK with its more than 2000 convenience

and supermarkets. Since its establishment in 1869, Sainsbury’s place customers at top of

everything and put maximum efforts for delivering them best shopping experience at its stores.

The core business of Sainsbury does include food, clothing and general merchandising. Its

vision is to become the most trusted store in retail market where people enjoy shopping and love

working. Sainsbury’s with its 161,000 employees offer great services to their customers at

reasonable prices in more than 55 countries. Its goal is to make lives of customer simple and

easier by serving them at when and where they demand. Sainsbury’s ensures its success in retail

market by following its core values that gave him competitive advantage over its competitors. Its
core values include providing quality food by sourcing with integrity in an environmentally

responsible way. Sainsbury’s is a corporation that wants to contribute towards development of its

communities in a positive way.

Sainsbury draws its operational excellence from five key areas that are derived from its values.

These are food, general merchandise and clothing, balancing its supply channel and services

demand, creating property value by growing its space and introducing new business. With these

five areas, Sainsbury’s has reduced its operational costs by £120 million which amounts to £570

million in next five years.

Sainsbury has delivered quality food to its customers at affordable prices for more than 145

years. Its strategies are helping the customers in doing their weekly shopping’s at low cost

without compromising at the quality of food. Sainsbury’s has launched its own food brands

which are recorded to grow at double rate than branded food products. Sainsbury’s food items

account for more than 50% of sales that Sainsbury’s derive from its food segments. Statistics

show that 97% of customers visiting Sainsbury stores prefer buying its own brand however

Sainsbury’s focuses on its general merchandising and cloth section design and quality for

building loyalty in its customers through enjoyable shopping. The sales from this section are

twice higher than sales from food department which amount for more than £1 billion and is

expected to grow in upcoming years . The key drivers of strong performance in general

merchandising and clothing are cooking utensils, electrical equipments of Kitchen and clothing.

In clothing segment, the launch of Tu-Clothing was successful as it has contributed £750 million

in annual sales. Sainsbury’s market for clothing and general merchandising has made

Sainsbury’s sixth leading retailer in the market of home ware

Sainsbury has facilitated its customer by providing them facility to shop when and where they

want, through various channels. Considering convenience of customers, Sainsbury has raised

19% growth in sales from its easily accessible locations. Its supermarkets, convenience stores

and online stores generate £1.8 billion as revenue each year by delivering more than 190,000

deliveries in a week.