Web sales boost Sainsbury's results

Web sales have driven up profits at Sainsbury's

Supermarket giant Sainsbury's reported buoyant interim results for 2008, and said that it will continue investing in web operations as part of a corporate recovery strategy.

Total sales at the retailer rose by 7.6 per cent to £10.7bn compared to £9.9bn a year earlier. Profit before tax grew from £232m in 2007-8 to £258m.

Further web investment will remain one of the core priorities for the chain's 'Recovery to Growth' plan announced in May 2007. The online home delivery operation represents one of the key channels through which the company intends to extend its brand reach.

Web sales at Sainsbury's increased by over 30 per cent in the first half, with over 100,000 customer orders a week, and the retailer forecasts that it will generate £500m in sales annually.

Online grocery shopping is now available to 87 per cent of UK households, and 165 Sainsbury's stores are offering the service. The chain believes there is " significant growth potential in its online operation, and plans to increase capacity in areas of high demand".

The retailer also said that its revitalisation programme, dubbed 'Making Sainsbury's great again', has so far made "significant progress" in improving its operational efficiency, with a number of technology projects supporting the strategy.

Ongoing enhancements are currently being made in areas including the distribution network, where improvements in depot productivity and store deliveries have been made.

A transport management system has also been implemented, which has helped improve the overall efficiency of the supply chain network.

Customer-facing IT, such as bi-optic scanners and self-checkouts, have also been introduced over the past two years to drive efficiency.

In the back office, a shared HR services support centre was recently created in Manchester, and better energy management has also been achieved via the roll-out of new technology.