Sainsbury's

History

The company was founded by the husband-and-wife partnership of John James and Mary Ann Sainsbury in 1869. While growth was initially confined to London and the surrounding area, by 1922, Sainsbury's was the largest UK grocery retailer. At this point, incorporation as a private company (J. Sainsbury Limited) occurred, and by the time the founder died in 1928, there were 128 shops. When the company went public in 1973, at which time all shares were held by various members of the Sainsbury family, it was the largest ever London Stock Exchange flotation. By the mid-1990s, a string of largely ineffective CEOs, beginning with the last Sainsbury family member to hold the reins, had driven the chain into decline. From its position as the United Kingdom's largest grocer, it was overtaken by Tesco in 1995 and, subsequently (upon its acquisition by Wal-Mart at the very end of the previous millennium), by Asda in 2003.

Under the guidance of Justin King, appointed CEO in 2004, a recovery program appears to be paying dividends. Meanwhile, however, takeover speculation is rife, with a number of initiatives having been tabled over the last two years. However, in a situation where 15 percent of the company's shares are still held by family members, they would need to be convinced of the rationale regarding any bid for it to be successful.

Sustainability

Despite its trials and tribulations, Sainsbury's has developed a dedicated attitude toward environmental and social issues, with the company's stated intention that it be environmentally responsible in the way it conducts its business and enable its customers to become environmentally responsible.

[Page 438]A focus on customer health and well-being is central to Sainsbury's efforts to becoming sustainable. This is evident in its commitment to “make the most popular items in our customers’ baskets healthier, focusing on products that contribute the most saturated fat, salt or sugar to the UK diet, to deliver a real impact on the nation's health.” The goal of providing customers with healthier, more environmentally sustainable products drives several initiatives:

• Stakeholder engagement—active dialogue with customers and nongovernmental organizations (NGOs) leads to the identification and prioritization of key areas of interest and constant improvement.
• Food labeling and reformulation—efforts to enhance food healthfulness include reducing sugar, salt, saturated fats, and chemical additives in processed foods; and communicating improvements to customers through a simple “Multiple Traffic Light” labeling system.
• Customer access and education—the company focuses on providing affordable versions of more sustainable foods and disseminating usage information through health-oriented “Tip Cards.”
• Child nutrition and education—a “Kids” line of prepared foods focuses on complete nutrition and introduces children to “Multiple Traffic Light” nutritional labeling.
• Sourcing locally and responsibly—food products are sourced within the United Kingdom in season, and through socially and environmentally responsible sources outside the United Kingdom. Fair Trade, Marine Stewardship Council, Forest Stewardship Council, and other third-party certifications help to guide purchasing decisions.
• Supplier relations—collaboration with the supply chain includes adherence to strict codes of conduct, extensive supplier training, and regular performance monitoring.
• Sainsbury's presently remains committed to the principle of reducing the company's operational footprint and continuing to develop a better understanding of the environmental impact of its products and its buildings. The company's environmental goals for more sustainable business operations include reductions in energy use and carbon emissions, packaging, food waste, and nonfood waste.

The company's energy goal is to reduce carbon dioxide emissions 25 percent by 2012, against a 2005–06 baseline. Efforts include increasing the energy efficiency of stores and other facilities, and increasing the use of renewable power, in particular by purchasing directly from renewable energy generators. It is reducing the carbon footprint of transportation by increasing operational efficiencies and converting to alternative fuel vehicles, such as electric vans and trucks that burn biomethane from landfill capture.

...