Darren Shapland, Sainsbury's recently-appointed development director. (Photo: Sainsbury/FIS)

Sainsbury's considers Asian expansion

UK retailer Sainsbury’s is considering whether to follow its strong domestic performance with an expansion to new overseas regions. A team is currently weighing opportunities for the company in China, India and beyond.

"We are looking in general at what international can bring," said Darren Shapland, Sainsbury's recently-appointed development director.

Sainsbury's is following in the footsteps of internationally successful Tesco and Marks & Spencer.

Some 10 years ago, Sainsbury's owned a chain in the US and one in Egypt, but it left them due to financial difficulties in the UK business, reports The Telegraph.

However, Shapland insisted that the chain’s international growth would come after the finalisation of the company’s five year strategy focused on domestic growth.

In addition, Sainsbury's will launch a momentous opening scheme for its UK small-store "convenience" division over the next six months by opening up to 50 stores in the second half of its financial year, versus 13 in the first half. The move may be "a rich seam for many years to come," the company said.

Meanwhile, Sainsbury's reported that in the six months to 28 October sales jumped by 7 per cent to GBP 11.9 billion (EUR 13.97 billion) or by 2 per cent on a like-for-like basis. Pre-tax profit climbed by 8.1 per cent to GBP 332 million (EUR 389.8 million).

It saw a 36.3 per cent bump in half-year profits that beat expectations. 

Chief Executive Justin King said the growth is ahead of the market and that Sainsbury's market share is mounting.

"If anything, we have been stretching our legs a little away from the market in recent months," he said.

Sainsbury's first half of the year has been a "continuation of a strong performance over a long period of time," King continued.

And as far as the holidays, they expect "a fiesty Christmas. They always are. We have the VAT rise and so there might be a bit of forward purchasing," he anticipated.

The recently relaunched Taste the Difference upmarket food range, King said, had been successful with customers and popular among people staying at home at weekends to watch The X-Factor.

Sainsbury's sales of its own-label brands make up just over 51 per cent of the total sales, which can give the retailer higher margins and provide consumers with lower prices.

"If you have 5 per cent more own-label [sales] in the mix it is equal to giving customers a 1.5 per cent price cut," he noted.

Related article:

- Tesco moves forward with bid for Asian Carrefour stores 

By Natalia Real
[email protected]
www.seafood.media

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