'Blueprinting' stores a 'dead' strategy, says Sainsbury's

Planning stores according to a universal blueprint across all of the Sainsbury’s estate “is dead” and “doesn’t serve customers well”.

Instead, tailoring individual supermarkets to local customers’ grocery needs was key to serving customers effectively, director of commercial operations Graham Biggart said at a tour of Sainsbury’s Redhill store last week.

He said Sainsbury’s uses data from customers’ Nectar cards and catchment data it buys to give it insight into what each supermarket should provide for customers.

When the Redhill store reopened in October 2017 following a three-year refurbishment, for example, a pizza counter was added to cater for the many offices in the surrounding area. The store now receives 30-40 pizza orders from local offices each weekday lunchtime, Biggart said, which he believes is down to the convenience and valueoffered.

Sainsbury’s is taking steps to tailor its 800 convenience stores in a similar way, he said.

During the tour, Argos CEO John Rogers highlighted the Sainsbury’s subsidiary’s 15% increase in year-on-year sales from its stores-in-stores - Argos stores in Sainsbury’s supermarkets.

Since the Sainsbury’s Group’s £1.4bn takeover of Argos in April 2016, around 50 stores-in-stores have opened, with Sainsbury’s CEO Mike Coupe pledging to open another 200 in the next three years. Argos has retained around 85% of its customers since the takeover, and Rogers outlined that the other 15% are “likely” to still be shopping in one of Argos’ high street-based stores, rather than one located within a Sainsbury’s supermarket.

Online sales are a key part of Argos’ strategy and will continue to be, Rogers said. “Around 60% of our sales originate online and 80% are fulfilled through our store network. Over the next five years or so, I’d expect 80% of sales to originate online and 60% to be fulfilled in store.”

“We’re able to get products very close to our customers in a very economically efficient way,” he added. “We can deliver within four hours to 90% of UK postcodes in an economically efficient way that Amazon can’t.”