Online sales increase helps Sainsburys post strong performance figures

Friday, March 18, 2016 - 13:28 by Simon Crisp

In the first two months of 2016 supermarket giant, Sainsbury’s, reported a 20 per cent year on year increase in sales made online, according to the Financial Times.

This strong e-commerce performance meant that, as a whole, the company saw a sales increase for the first time since 2014. Although at just 0.1 per cent, this rise is relatively small and suggests that Sainsbury’s is continuing to face challenging market conditions.

The firm also revealed that some physical products were proving to be popular, with sales of items in the entertainment category rising by over a tenth. Sainsbury’s chief exec, Mike Coupe, said that this was a sign that not every aspect of the retail market was moving to the digital-only approach.

The company’s positive e-commerce sales figures were published in the same week as grocery delivery firm, Ocado, revealed that it was now fulfilling more than a quarter of a million orders each week.

Sales were up by 14 per cent annually and its revenue growth has hit double digits, meaning that Ocado is in an increasingly resilient position, managing to avoid some of the pressures that its bricks and mortar rivals are suffering.

Of course, the news of Morrisons deal with Amazon has thrown a spanner in the works for Ocado, which had originally struck its own distribution deal with the supermarket. So the shape of things to come in 2016 is less certain.

Industry analyst, Jerome Samuel, pointed out that Amazon will likely be looking to get into the grocery market even if it loses money by doing so, because it has the resources to look to the long term. This speculation may prove decisive, determining whether or not Ocado can continue to offer safe shopping online.