31 May 2000
Sainsburys pins hope on e-commerce

By FWi staff

SUPERMARKET chain Sainsburys hopes to halt a decline in profits by expanding its e-commerce sector.

Latest figures show profits have slumped by nearly a quarter as the store struggles to keep up with rivals Asda and Tesco.

Chief executive Sir Peter Davis hopes building up Sainsburys home-shopping sector will win back its former top position.

Expansion of e-commerce activities and the construction of 13 new stores will create 5000 jobs this year.

Currently available from nine stores only, this will cover 60% of customers by the end of this year.

The retailer also wants to set up a new food and drink web portal.

Profits at Sainsburys dropped 23.2% from last years 756m to 580m, reports BBC Online.

Sales are up, by 6.3% to 17.4bn.

Sainsburys has attempted to reflect consumer demand for organics and resistance to genetically modified products.

Last year, it claimed to be the first UK supermarket to drop GM ingredients from its own-brand products.

But later the Advertising Standards Authority ruled that the store had misled customers with these claims.

In 1997, the group launched a programme to encourage British farmers to “go organic” to increase its number of organic lines.

Two years later it gave a five-year commitment to pay an organic milk co-op a guaranteed premium price for its product.

The store opted for a radical solution to meet demand for organic tropical fruit when it secured the entire production of two Caribbean islands.