Operating Review
Competitive pricing
The £400 million investment in our customer offer outlined in our MSGA plan was completed by December 2006 and we have now invested additional funds in early 2007. In total we have now invested over £450 million in quality and price. We now guard our price position jealously and since January 2007 we have cut a further 5,000 prices, bringing the total since announcing our commitment to 20,000.
Ensuring we remain competitive on price was a key strand of our recovery plan and fundamental to making sure our brand appeals to the widest range of people. But what makes Sainsbury’s different for our customers is our quality.
bananas are sold every minute in our stores Bananas offer a good illustration of how we turn commitments into actions and provide customers with quality they value at competitive prices. They are also a great example of how our heritage and our customers’ wishes have become increasingly aligned over the year. We’ve worked with banana growers in the Windward Isles for the last 50 years and our customers were already buying a large number of Fairtrade bananas. In December 2006 we announced the decision to convert our entire banana range to 100 per cent Fairtrade by July 2007.
Our Fairtrade bananas cost the same as the conventional bananas available in other mass-market supermarkets and are around 25 pence a kilo cheaper than Fairtrade bananas generally available in some of our competitors’ stores. We invested approximately £4 million in the supply chain – in the social premium that is paid to farmers – to achieve this value for money for our customers.
Every minute 1,000 bananas are sold in our stores and our customers are helping to make an enormous difference to Fairtrade farmers and their communities. This is the biggest conversion of its kind worldwide and we now sell more Fairtrade bananas than all of the other major supermarkets in the UK combined.
