JSNSF - J Sainsbury plc (JSNSF) Q1 2024 Earnings Call Transcript

2024-04-26 01:24:09 ET

J Sainsbury plc. (JSNSF)

Q1 2024 Earnings Conference Call

April 25, 2024, 04:30 AM ET

Company Participants

Simon Roberts - Chief Executive Officer

Blathnaid Bergin - Chief Financial Officer

Conference Call Participants

Izabel Dobreva - Morgan Stanley

Freddie Wild - Jefferies

Clive Black - Shore Capital

Sreedhar Mahamkali - UBS

James Anstead - Barclays

Anna Schumacher - BNP Paribas

Presentation

Operator

Simon Roberts

Good morning everyone, and thank you for joining this call to talk through our results for the year to the second of March. I'm going to kick off with an explanation of some very good results. Tell you how we got here and lay out where we're going. Blathnaid will then take you to the financials and then I'll spend some more time on the highlights of the last year and look at the momentum we're taking with us into this new financial year.

Now today's results are all about Sainsbury's winning in Food, really good food at really good prices. Food is three quarters of our business and it's now firing on all cylinders. We've made record market share gains. Our volume growth has accelerated every quarter, and we've been winning customers from all our key competitors. When we launched our food first actually three years ago, our goal was to have the best combination of value and quality. We've really delivered on that and customers looking for the best value, that's our quality and prices are turning to Sainsbury's for their weekly shop and especially trusting us for all the big events for Christmas, for Easter for every special occasion.

And we've significantly improved our lead in customer service all of this reflects the hard work and commitment of all of my colleagues, and I'd like to thank every one of our team for everything they've done in achieving these results. We've delivered financially as well with higher profits, lower debt and strong cash generation in part driven by our very determined and consistent delivery of a much higher level of structural cost savings.

Now we've achieved the balance of financial delivery and strong trading through deliberate balance choices for our customers, colleagues, communities, supplies and shareholders. This has been the case over the last year with another £220 million investment into price delivering a further strengthening of our value position against competitors. We've also continued to lead the market on investing in our people, with another £200 million investment in colleague pay announced in January.

We've put £36 million back into communities and we've continued to tackle food poverty and reduce food waste through our partnership with Neighborly, and we continue to reshape the way we work with our suppliers providing more support to British farmers and building longer-term more strategic partnerships bringing benefit to us and them.

Now we are constantly asked whether we can win from the middle of the market and this slide shows that's exactly what we're now doing. We're the only full-choice retailer getting from both the premium grocery retailers and the limited-choice supermarkets. And while we've driven a real shift in customer perception of value at Sainsbury's, this hasn't impacted our reputation for quality. You'll remember when we set out our plan back in 2020 we were too expensive and we were losing market share. We knew that to make real progress, we needed to fundamentally reset our value position and then significantly shift customer value perceptions.

Having invested £780 million over the last three years, we are at our most competitive on price ever. And as you can see in the left-hand chart, we're now really seeing the impact of this investment with a step change in value perception. We always knew that it would take time for customer perceptions to catch up with the improved reality, but value perceptions are now at their strongest in six years....

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