J Sainsbury - Financial Performance of Last 5 Years Essay

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Pages: 12


J Sainsbury plc is a UK based company, into grocery, related retailing an financial services business. The study is primarily to do financial assessment of this company and its performance relative to its peers and industry. Seeing the last 5 years report, it is evident that company was in a bad share 3 years ago, and now its in the stage of recovery.
Starting 2004, there has been a major change in the board, as well as management. Since then company has taken several large and aggressive approach. This can be summarised as renovating/ ex-panding retail space, re-engineering of supply chain, and improvement in IT system. Also there has been focus on brand repositioning through quality improvement, cost reduction
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The cuts were made to bring prices more into line with the competitors. Since company was not able to promise and deliver the high volume, their suppliers were not supportive enough for price reduction. Resultant company was in red in 2005, see table 2 for profit before and after tax. The problem in 2004, which they were facing, was availabil-ity, price margin, supply chain & IT, customer service, etc. However with the change in leadership (new CEO Justin King) in 2004, the first major change he did was change in board members and in few changes in management team. They aid out plans for recovery – a three-year program to grow sales by 2.5b pound by end of 07/08. The campaign was “Make Sainsbury Great Again”(MSGA). This Business Transformation Process actually contained a number of plans, broken down into three core elements:
➢ Reinvigorate the store portfolio
➢ Re-engineer the supply chain:
➢ IT platform improvement.
The results are in front of all of us. In terms of sales revenue they are ahead of the target of 2.5b by end of 08. Last year they grew by 1 b taking cumulative growth in last 2 years to 1.8b pound. 2.4 Market Overview
The UK’s retail grocery market will be worth £118. 1bn by the end of this year and is predicted to grow to £133.5bn by 2009, according to the latest report from food industry think-tank, IGD . The key factors driving growth are changing demographics, increasing contribution of non-food, which