Sainsbury’s is launching an ad campaign today focusing on its loyalty scheme Nectar card for the first time as it seeks to capture more of shoppers’ Christmas spend.
King said there is no cut-off point on using Nectar points, unlike other loyalty schemes, which issue vouchers with a redemption date. The drive pits Sainsbury’s scheme against Tesco’s Clubcard offer in the run-up to Christmas. Grocery market monitor TNS reported this week that Tesco’s Clubcard 2 offensive was helping the food giant improve its performance.
Sainsbury’s also this week launched its new Christmas ad featuring Jamie Oliver. Other ads will promote Sainsbury’s non-food range, offering three-for-two deals on gifts.
King said: “This is the first Christmas we can say we are serious about non-food so if we have advertised an item that shoppers can’t buy in their local store, they can buy it online.”
King said customers are expecting the VAT rise in January and if they have got the money they will pull forward any non-food purchases.
Sainsbury’s posted an 18.5% increase in underlying pre-tax profits to £307m in the 28 weeks to October 3, when turnover rose 3.7% to £11.16bn. Like-for-likes, excluding fuel, advanced 5.7%.
King said weekly customer transactions now stand at 18.5 million, up 800,000 on last year, and the grocer is well placed following its £432m fundraising in June to speed up growth plans.
King said there is “every reason to believe this quarter will pull us out of recession”, but he added that with tax rises, people still losing their jobs and election uncertainty, “there’s every reason to be cautious about next year and it won’t be until around the second or third quarter until we will know whether we are in a steady recovery or if it will be a ‘W’ recession”.
As part of Sainsbury’s expansion, it is targeting areas where its market share is weak, such as the north of England.
Sainsbury’s chairman David Tyler said: “Shareholders are happy with the performance of Sainsbury’s and don’t see it as a one-minute wonder. They see it has legs to deliver long-term growth.”