Sainsbury’s bosses have swung the axe on its four-year sponsorship deal with British Athletics following a strategic review of its business.
- Sainsbury’s cuts short its sponsorship deal with British Athletics
- Decision made as “part of strategic review last year”
- Comes after rival Aldi secured deal to sponsor Team GB
The multi-million pound deal, which was signed by the grocer’s former chief executive Justin King in 2013, had been due to run until the end of 2017.
But Sainsbury’s has taken the option to exercise a clause that allowed it to carry out a mid-point review and cut short the partnership.
The supermarket giant said it informed British Athletics of the decision late last year, but the news has become public days before the start of the World Athletics Championships in Beijing.
Sainsbury’s boss Mike Coupe, who succeeded King in June 2014, has been seeking to cut costs amid what he called a “perfect storm” battering the big grocers due to competition from the discounters, changing shopping habits and falling margins.
In May, the retailer reported a full-year loss of £72m – its first statutory loss for a decade. The grocer blamed the pre-tax loss on a £753m charge it revealed in its half-year results back in November, which was mostly related to property writedowns on its stores. Its estate fell in value by £900m to £11.1bn during the year.
But trading was also hit as like-for-like sales dropped 1.9% in the 52 weeks to March 14, with retail sales excluding fuel down 0.2%.
Since then, the grocer has issued £250m of convertible bonds to help plug a hole in its pension fund and has sold off its pharmacy business to Celesio’s LloydsPharmacy in a £125m deal.
Sainsbury’s said in a statement: “Sainsbury’s has been a proud supporter of British Athletics since 2013 following our sponsorship of the London 2012 Paralympic Games.
“The decision was made as part of our strategic review last year. We wish British Athletics all the best with their future events programme.”
It means July’s Sainsbury’s Anniversary Games, held in the former Olympic Stadium at Queen Elizabeth Park, will be the last event to carry the grocer’s branding. But it will continue to support schools through its Active Kids vouchers programme and will sponsor the UK’s Paralympic athletes competing at the Rio Olympics in 2016.
Sainsbury’s grocery rival Aldi will support Team GB in the build-up and during the games in Brazil after revealing a deal in March.
In doing so, the discounter became the first ever supermarket to become an official partner of Britain’s Olympic athletes.