Renowned UK supermarket chain Sainsbury's has announced its 'Next Level Sainsbury's' strategy, building upon the success of its previous 'Food First' initiative launched in November 2020.

The new strategy aims to further solidify Sainsbury's position in the market, enhance shareholder returns, and bolster its commitment to customer satisfaction.

Key highlights

Under its Next Level strategy, the company plans to:

• Increase market share in the grocery sector by expanding its food range and attracting more customers.
• Enhance its Nectar loyalty platform to offer personalised rewards and strengthen its retail media capabilities.
• Capitalise on Argos's strengths in convenience and value while also focusing on operational efficiencies.
• Invest in technology and infrastructure to drive growth and achieve £1bn ($1.26m) in structural cost reduction.

Commitments and financial outlook

Sainsbury's has outlined eight commitments to be achieved by March 2027, including surpassing market growth in food volume and delivering higher profits.

The company expects to increase its retail operating profit from the outset of the plan and plans to invest between £800m and £850m annually in capital expenditure over the next three years.

Furthermore, Sainsbury's anticipates generating at least £1.6bn in retail free cash flow over the same period, with a focus on efficiency and growth investments.

Enhanced returns for shareholders

In a move to reward shareholders, Sainsbury's will adopt a progressive dividend policy starting from the next financial year.

Additionally, the company plans to initiate a share buyback programme, aiming to repurchase £200m worth of shares within the next financial year.

Simon Roberts, CEO of J Sainsbury, emphasised the company's commitment to delivering exceptional value, quality food, and superior service to its customers.

“Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for - outstanding value, unbeatable quality food and great service. Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsbury's, Argos and Nectar.”

Four key outcomes of the strategy

The Next Level strategy revolves around four key outcomes:

• First choice for food: Sainsbury's aims to attract more customers by offering a wider food range, consistent value, and superior freshness and innovation.
• Loyalty everyone loves: The company plans to enhance its Nectar loyalty platform, providing personalised rewards while maintaining transparency in data usage.
• More Argos, more often: Sainsbury's seeks to transform Argos by focusing on convenience, value, and digital capabilities, thereby increasing customer engagement and spending.
• Save and invest to win: By saving £1bn in operating costs and investing in technology, Sainsbury's aims to drive efficiency, productivity, and growth.

With a renewed purpose and strategic focus, Sainsbury's is poised to elevate its offerings, enhance customer experiences, and deliver sustainable growth in the years ahead.