Sainsbury's boss says sourcing British now key to retail success
BUYING British has become a major competitive issue for the big UK supermarkets, Sainsbury’s chief executive Justin King told a meeting at the Conservative Party Conference.
He pledged that Sainsbury’s will continue to increase the volume of British food it sources in order to maintain a competitive edge over its rivals.
Mr King’s comments at an NFU fringe meeting in Manchester echo the pledges made by his Tesco counterpart, Philip Clarke, at the NFU conference, in February, where Mr Clarke pledged, in the wake of horsemeat scandal, to source more food nearer to home.
Sainsbury’s has reported a 2 per cent year-on-year increase in sales in the second quarter of this year, gaining further ground on Tesco, which reported a 23.5 per cent drop in profits during the first half of its financial year.
Mr King attributes Sainsbury’s success in recent years in part to its commitment to British food. “We know British farming is a consumer issue and we believe it will help with our growth,” Mr King said.
Mr King said a Sainsbury’s survey showed ‘buying British and supporting British farmers’ was the ‘number two issue in corporate responsibility’ for its customers, ahead of ‘being fair to colleagues’, with issues like energy and the environment higher up the list.
“The Consumer believes that, if something can be supplied from the UK, it should be. They want it to be safe, healthy, fresh and tasty. That’s what we are looking for our food.”
Sainsbury’s is currently working towards fulfilling a pledge, made in its 20x20 Sustainability Plan in October 2011, to double the volume of British food it sells by 2020.
Earlier this summer it announced that all its fresh pork was 100 per cent British, as is its ham and fresh sausages. It fresh chicken has been 100 per cent British for more than 10 years and it claims to be the biggest retailer of British apples and pears.
Mr King said consumers have become ‘more concerned about where their food comes’ even as the pressure on household incomes has grown.
“We have made a long-term commitment to purchase more food from Britain. We think sourcing is a competitive issue and we intend differentiate ourselves from our competition. We will push further because we believe it is driven by customer choice. That is the game,” he said.
NFU president Peter Kendall said the commitment shown by Sainsbury’s, which he urged other retailers to follow, provided real incentives for farmers to invest in their businesses.
Citing commitments made on British sourcing by Tesco and the Co-op, he said: “We have now got the leading retailers bragging about sourcing British. What could be a better message for young people who come into this industry today?
“The challenge for us is to make sure we do the job well. It is about all of us raising our standards and bragging about our provenance so supermarkets brag about it to their customers. I think this is a great opportunity for us,” he said.
Sainsbury’s was heavily criticised last year when it announced it was dropping the Red Tractor logo. While also welcoming Mr King’s comments, NFU deputy Meurig Raymond stressed the importance of supporting the Red Tractor.
Afterwards, a Sainsbury’s spokesperson defended the decision to drop the Red Tractor. She said: “This is not a step back from supporting British farmers; we are actually stepping up our commitment.
“Customers have told us that too many logos are confusing, so we began phasing out the use of the Red Tractor logo on pack. We will still use the Red Tractor standards as part of our wider sourcing standards and clearly label our products with country of origin, including the Union flag for British made products.”