Sainsbury's increases investment in online operations

Retailer pours cash into non-food web set-up and online grocery sales continue to grow

Sainsbury's is expanding its web set-up

Sainsbury’s online operation has seen benefits from IT enhancements in areas such as supply chain replenishment, the retailer said in its results today.

Simplification of in store and web processes has also played an important role in driving web business improvements according to the company. The retailer has seen growth of over 20 per cent in sales of groceries online.

It aims to grow market share through moves such as the expansion in the online space.

According to Sainsbury’s, capital expenditure of around £2 billion is planned between now and March 2011 and some of that will be put into its non-food online offering launched this summer.

“Our strategy is now well established and has enabled us to compete successfully through challenging economic conditions. We have continued to grow market share, and extended our reach through online operations. We have also stepped up the expansion of our convenience store network,” said Sainsbury’s chief executive Justin King.

Sainsbury’s posted an 18.5 per cent increase in underlying pre-tax profits to £307m during the period of 28 weeks to 3 October. Turnover was also up by 3.7 per cent to £11.16bn and like-for-likes, excluding fuel, grew 5.7 per cent.