Post on 31-Jul-2020
Capital Markets DayMike Coupe
2 Capital Markets Day - September 2019
Key industry challenges
bull Growth of discounters
bull Growth in digitisation of customer shopping
bull Low to no underlying market growth
We have created a multi brand multi channel business
Growth
3 Capital Markets Day - September 2019
Purpose To help our customers live well for less
Be competitive on price
Offer distinctive
products and new categories
Drive efficiency to invest in the
customer offer
Grow connected
servicesPriorities
Provide a seamless customer
experience
Metrics
Make shopping convenient
supported by great service
Colleague engagement Customer satisfaction Volume share Profitability Free cash flow ROCE
We will help our customers live well for less
4 Capital Markets Day - September 2019
Paul Mills-HicksFood Commercial DirectorDelivering our food proposition
bull Changes to our value proposition and customer response
bull Confident we can sustainably fund investment in the offer
Simon Roberts Retail and Operations DirectorDelivering service and conveniencebull Store operating model delivering improved service and
convenience while lowering our cost to serve
bull Targeted investments allowing investment in more of our store base more frequently
Confident in the Core
Patrick DunneDirector of Property Procurement and Cost TransformationDriving value from our estate
bull 5 year plan to realise value from and optimise our estate
Kevin OrsquoByrneChief Financial OfficerCost transformation
bull Unique opportunity to deliver structural cost reduction by bringing our businesses together
5 Capital Markets Day - September 2019
Jim BrownCEO Sainsburyrsquos BankFinancial Services strategy
bull Reshaping the business to improve profits returns and cash generation
bull Stop mortgage origination no further Group capital injections into the bank
Mark GivenChief Marketing OfficerNectar
bull The strength of the Nectar coalition model
bull Launch of digital Nectar
bull Potential to advance monetisation of Nectar data
Our integrated customer offer
Clo MoriartyChief Digital OfficerDigitising the customer journey
bull Building a seamlessly integrated digital proposition
bull A unique competitively advantaged multi brand multi channel platform
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
2 Capital Markets Day - September 2019
Key industry challenges
bull Growth of discounters
bull Growth in digitisation of customer shopping
bull Low to no underlying market growth
We have created a multi brand multi channel business
Growth
3 Capital Markets Day - September 2019
Purpose To help our customers live well for less
Be competitive on price
Offer distinctive
products and new categories
Drive efficiency to invest in the
customer offer
Grow connected
servicesPriorities
Provide a seamless customer
experience
Metrics
Make shopping convenient
supported by great service
Colleague engagement Customer satisfaction Volume share Profitability Free cash flow ROCE
We will help our customers live well for less
4 Capital Markets Day - September 2019
Paul Mills-HicksFood Commercial DirectorDelivering our food proposition
bull Changes to our value proposition and customer response
bull Confident we can sustainably fund investment in the offer
Simon Roberts Retail and Operations DirectorDelivering service and conveniencebull Store operating model delivering improved service and
convenience while lowering our cost to serve
bull Targeted investments allowing investment in more of our store base more frequently
Confident in the Core
Patrick DunneDirector of Property Procurement and Cost TransformationDriving value from our estate
bull 5 year plan to realise value from and optimise our estate
Kevin OrsquoByrneChief Financial OfficerCost transformation
bull Unique opportunity to deliver structural cost reduction by bringing our businesses together
5 Capital Markets Day - September 2019
Jim BrownCEO Sainsburyrsquos BankFinancial Services strategy
bull Reshaping the business to improve profits returns and cash generation
bull Stop mortgage origination no further Group capital injections into the bank
Mark GivenChief Marketing OfficerNectar
bull The strength of the Nectar coalition model
bull Launch of digital Nectar
bull Potential to advance monetisation of Nectar data
Our integrated customer offer
Clo MoriartyChief Digital OfficerDigitising the customer journey
bull Building a seamlessly integrated digital proposition
bull A unique competitively advantaged multi brand multi channel platform
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
3 Capital Markets Day - September 2019
Purpose To help our customers live well for less
Be competitive on price
Offer distinctive
products and new categories
Drive efficiency to invest in the
customer offer
Grow connected
servicesPriorities
Provide a seamless customer
experience
Metrics
Make shopping convenient
supported by great service
Colleague engagement Customer satisfaction Volume share Profitability Free cash flow ROCE
We will help our customers live well for less
4 Capital Markets Day - September 2019
Paul Mills-HicksFood Commercial DirectorDelivering our food proposition
bull Changes to our value proposition and customer response
bull Confident we can sustainably fund investment in the offer
Simon Roberts Retail and Operations DirectorDelivering service and conveniencebull Store operating model delivering improved service and
convenience while lowering our cost to serve
bull Targeted investments allowing investment in more of our store base more frequently
Confident in the Core
Patrick DunneDirector of Property Procurement and Cost TransformationDriving value from our estate
bull 5 year plan to realise value from and optimise our estate
Kevin OrsquoByrneChief Financial OfficerCost transformation
bull Unique opportunity to deliver structural cost reduction by bringing our businesses together
5 Capital Markets Day - September 2019
Jim BrownCEO Sainsburyrsquos BankFinancial Services strategy
bull Reshaping the business to improve profits returns and cash generation
bull Stop mortgage origination no further Group capital injections into the bank
Mark GivenChief Marketing OfficerNectar
bull The strength of the Nectar coalition model
bull Launch of digital Nectar
bull Potential to advance monetisation of Nectar data
Our integrated customer offer
Clo MoriartyChief Digital OfficerDigitising the customer journey
bull Building a seamlessly integrated digital proposition
bull A unique competitively advantaged multi brand multi channel platform
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
4 Capital Markets Day - September 2019
Paul Mills-HicksFood Commercial DirectorDelivering our food proposition
bull Changes to our value proposition and customer response
bull Confident we can sustainably fund investment in the offer
Simon Roberts Retail and Operations DirectorDelivering service and conveniencebull Store operating model delivering improved service and
convenience while lowering our cost to serve
bull Targeted investments allowing investment in more of our store base more frequently
Confident in the Core
Patrick DunneDirector of Property Procurement and Cost TransformationDriving value from our estate
bull 5 year plan to realise value from and optimise our estate
Kevin OrsquoByrneChief Financial OfficerCost transformation
bull Unique opportunity to deliver structural cost reduction by bringing our businesses together
5 Capital Markets Day - September 2019
Jim BrownCEO Sainsburyrsquos BankFinancial Services strategy
bull Reshaping the business to improve profits returns and cash generation
bull Stop mortgage origination no further Group capital injections into the bank
Mark GivenChief Marketing OfficerNectar
bull The strength of the Nectar coalition model
bull Launch of digital Nectar
bull Potential to advance monetisation of Nectar data
Our integrated customer offer
Clo MoriartyChief Digital OfficerDigitising the customer journey
bull Building a seamlessly integrated digital proposition
bull A unique competitively advantaged multi brand multi channel platform
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
5 Capital Markets Day - September 2019
Jim BrownCEO Sainsburyrsquos BankFinancial Services strategy
bull Reshaping the business to improve profits returns and cash generation
bull Stop mortgage origination no further Group capital injections into the bank
Mark GivenChief Marketing OfficerNectar
bull The strength of the Nectar coalition model
bull Launch of digital Nectar
bull Potential to advance monetisation of Nectar data
Our integrated customer offer
Clo MoriartyChief Digital OfficerDigitising the customer journey
bull Building a seamlessly integrated digital proposition
bull A unique competitively advantaged multi brand multi channel platform
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
6 Capital Markets Day - September 2019
One multi brand multi channel business
A unique range of assets and capabilities
A joined up multi brand multi channel proposition - allowing customers to shop with us however they want
We can only deliver this by fully integrating our businesses
This also provides an opportunity to structurally transform our cost base
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
7 Capital Markets Day - September 2019
Helping our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
Delivering our food propositionPaul Mills-Hicks
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
9 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better Entry Price Point (EPP) ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
10 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Product Quality Framework Our clear segmented strategy
Quality Option Commodity Everyday Speciality
Competitive to drive footfall ldquono reason to shop elsewhererdquo
Added value distinct and exclusive ldquoevery reason to shop with Sainsburyrsquosrdquo
77of volume
66of gross profit
23of volume
34of gross profit
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
11 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Reminder of our value opportunity
YoY value share change by tier FY 201819
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019
PremiumOwn Brand
Branded
-18
-03 StandardOwn Brand
EconomyOwn Brand
01
-01
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
12 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Developing our EPP owned brands offerProduce Meat Fish amp Poultry Dairy
Bakery
Sweet Treats
Savoury Treats Pet Store Cupboard
Prepared Foods Deli Products Household Beers Wines amp Spirits
Health amp Beauty
Fresh Frozen
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
13 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
0
50
100
150
200
250
300
Pre 1920 April May June July August September October November December January February March April May
2019 2020
Expanding the offer ndash 12 brands launched
Number of EPP lines landed
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr MayPreFY 201920
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
14 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gaining customer spend limited trade-down impact
bull Incremental choice for customers
bull Focused on price competitiveness
bull Value Index of range to Aldi 991
bull Converting customers in store
bull Profit percentage dilutive
bull Profit cash accretive
Sainsburyrsquos Meat Fish amp Poultry Value Own LabelGains and losses
Gains
Losses
Incremental Trade-down within Sainsburyrsquos
May 18 July 19
Source Kantar 12 we 16 July 2019 ndash rolling 12 weeks switching within total Market MFP 1 Incremental MFP growth represent gainslosses from category impact (existing shoppers repertoire category arrivaldepartures and competitors steal) 1 Correct at 12 Sep 2019
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
15 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Lowered prices in key high volume categories
Market Disruptive Price Investments Customer led price investments
Chicken Breast Fillets 640g-60p -15
5 fat Beef Mince
-30p -9
Salmon Fillets 240g-60p -17 Breaded Ham
7 slices 120g-45p -26
pound300was pound330pound340
was pound400
pound300was pound360
pound130was pound175
Executing through Price Lockdown
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
16 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We continue to be less dependent on promotions
45
40
34
33 YoY changeppts
(44)
00
(01)
(01)
Fuel activity (days)2Promotional volume1
Source 1 Kantar Grocery total volume sales 52 weeks to 8 Sept 2019 2 Trade press summary of days live 52 wks to 21 Sept 2019
58
60
32
nil
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
17 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
More competitive on price than we have ever been
Price vs Tesco Commodity Average Selling Price vs Aldi
Base Price Index
Apr Jul Dec2017 2018 2019
Dec2005 2007 2009 2011 2013 2015 2017 2019
-590bp -790bp
Source Sainsburyrsquos value index based on Brandview SKU matching data
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
18 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Market share progress
Source Nielsen Panel Total FMCG 4 12 and 52 weeks to 07 Sept 2019 ndash Market Universe Total Outlets
-4
-2
0
2
4
Tesco
Asda
Morrisons
Sainsburyrsquos
-4
-2
0
2
4
Tesco
AsdaMorrisons
Totaloutlets
Sainsburyrsquos
52 weeks12 weeks
4 weeks
Totaloutlets
52 weeks12 weeks
4 weeks
Value growth Volume growth
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
19 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Switching losses to discounters reversed
Source Nielsen Panel Total FMCG Market Universe Total Outlets 12wkly data to 07 Sept 2019 vs 08 Sept 2018 Spend switching as a of total sales
-30
-25
-20
-15
-10
-05
00
05
10
15Switching gainslosses as a percentage of total sales
2019 Feb Jun Jul Aug Sept Oct Nov DecMar Apr May Jan Feb Jun Jul AugMar Apr May
2018 SeptJan
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
20 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Gains from premium competitors
Taste the Difference relaunch Switching gains from premium competitors
00
01
02
03
Aug Dec2018
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug2019
SeptSept
Source Nielsen Panel Total FMCG 52wkly data to 07 Sept 2019 Spend switching as a of total sales
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
21 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
bull Innovative and distinctive brands
bull New incremental choice for customers
bull Unique to Sainsburyrsquos in the grocery channel
bull 158 exclusive and owned brands
bull pound200m sales to date
bull Average incrementality 56
bull Cash and margin rate accretive
Distinctive brands
pound55mbrand
+90customers YOY
60incremental
sales +60 YoY
150 growth forecast
Sales
Distinctive brands sales
Mar Jun Sep Dec Mar Jun2018 2019
Offer distinctive productsand new categoriesBe competitive on price
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
22 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Category tier performance better balanced
YoY value share change by tier
-04
-06
13
-06
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
-03
-01
03
-09
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 7 Sept 2019
Offer distinctive productsand new categories
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
23 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF framework helps us fund investment
PQF activity to date covers
49of food volume
Improved Value Indexmore competitive
More distinctive range more reason to shop at Sainsburyrsquos
Reduced SKU countoperational efficiencies
Cash gross profit +35
Increased salesvolume intensityoperational efficiencies
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
24 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
PQF cereals case study
Investment
New missions
Exclusive products
Range removal
Improved Value Index gt100bpsmore competitive
More distinctive range 6 brandsmore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit
Increased salesoperational efficiencies
Cereals reset
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
25 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
Own brand Value Chain Analysis (VCA)
own brand COGS reviewed
pound4bnpound265m
201617 to 201920
further opportunitypound2bn
7 savings
lsquoBuying better for lessrsquo
Reviewed Opportunity
pound2bn
pound4bn
Own brand food COGS
Offer distinctive productsand new categories
26 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
VCA case study Spanish fruit
Before20 cost saving
After
Grower Depot Store3rd Party Importer
1 2 3 4
1 32
Better for customers
Grower StoreDepot
At least 1 day faster from farm to shelf
Saving gtpound12m
Better customer availability
End to end simplicity
Offer distinctive productsand new categories
27 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better EPP ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
Delivering service and convenienceSimon Roberts
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
Reviewed | Opportunity | Column1 | ||||
Category 1 | 4 | 2 |
Category 1 | Category 1 |
26 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
VCA case study Spanish fruit
Before20 cost saving
After
Grower Depot Store3rd Party Importer
1 2 3 4
1 32
Better for customers
Grower StoreDepot
At least 1 day faster from farm to shelf
Saving gtpound12m
Better customer availability
End to end simplicity
Offer distinctive productsand new categories
27 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better EPP ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
Delivering service and convenienceSimon Roberts
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
Reviewed | Opportunity | Column1 | ||||
Category 1 | 4 | 2 |
26 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
VCA case study Spanish fruit
Before20 cost saving
After
Grower Depot Store3rd Party Importer
1 2 3 4
1 32
Better for customers
Grower StoreDepot
At least 1 day faster from farm to shelf
Saving gtpound12m
Better customer availability
End to end simplicity
Offer distinctive productsand new categories
27 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better EPP ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
Delivering service and convenienceSimon Roberts
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
27 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenient supported by great service
Provide a seamlesscustomer experience
We have made changes to our value proposition
bull Better EPP ranges
bull Lower prices on key volume lines
bull Competitive on ldquoabove the linerdquo deals
Delivering our food proposition
We are confident in our ability to sustainably fund investment in the customer offer
We can sustainably fund this
bull Industry-leading Value Chain Analysis
bull Optimising our advantaged sales mix
bull Prime destination for supplier investment
bull Operating cost savings
Offer distinctive productsand new categories
Delivering service and convenienceSimon Roberts
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
Delivering service and convenienceSimon Roberts
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
29 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
Delivering improved service and convenience while lowering our cost to serve
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
30 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in stores and taking a proactive approach to space
bull Rebalanced 20 of our supermarket space over the last 18 months
bull Total space repurposed since FY 201415 over 870000 sqft
bull Improving choice convenience and reasons to shop
Leveraging our advantaged supermarket portfolio
1617 1718 1819
Trading intensitySupermarkets inc GMampC and Argos in Sainsburyrsquos
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
31 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving strong online growth through a highly efficient operating platform
A profitable operation that benefits our supermarkets
bull Strong and consistent online growth
bull Consistently high customer feedback
bull 98 UK households c60 same day
YoY improvement in items picked per hour
201415 201920F
40
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
32 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Convenience Delivering sustained growth
75
80
85
90
201718 201819201617
JS Market share
10
15
20
25
30
201718 201819201415 201617201516
Knowledge of colleagues
Speed of checkout
Friendliness of colleagues
Ease of checkout
Availability of colleagues
Customer satisfaction (total)
Source Nielsen EPOS ConvenienceTotal Business Quarterly data to Q1 1920 Units
Q2 1819 Q4 1819 Q1 1920 Q2 1920Source Lettuce Know
QTDQ3 1819
Consistent LfL growth and market share gains Market-leading convenience trade intensity
Strong and improving customer satisfaction
Co-opWaitroseSainsburyrsquosOne StopTesco Express
Source IGD
(poundsqft)
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
33 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Future fit
Store operating model reset
bull Lower cost to lead
bull Customer-focused leadership teams
bull More flexible simple structures
bull Strong levels of colleague and leader engagement
bull Improved colleague performance and capability
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
34 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store operating model fit for the future
Simplified and consistent operations to drive service amp availability
Colleagues and operations focused on delighting customers
Investment in customer experience technology and stores look and feel
Unlock further efficiency to reinvest in the customer offer
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
35 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Smart Store Improved service more efficient
Storeoperating
modelConnected Colleagues
Safe Stores
Connected Buildings
Revolutionisedcheckout model
Supermarket items sold per worked hour
+12+23
+24+2
Friendliness ofcolleagues
Knowledge ofcolleagues
Availability ofcolleagues
Availability ofproducts
Q3LY
Q2TY
+14
Apr May Jun Jun Jul
2018 2019Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
36 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull SmartShop ndash in-store scan pack and go
bull Upgraded 2500+ self checkouts - 10 improvement in speed- Improved customer satisfaction
- ease of checkout +4 - speed of checkout +53
bull Higher self checkout penetration- Every 1 of items moving to self checkout delivers
pound46m efficiency saving
Investment in checkout experience
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
37 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Seamless digital platform for all colleagues- More time on sales floor with customers- Industry leading technology enabling highly
efficient store operations- Apps
- Replenishment - Activity - Stock- Risk - Reporting
bull Saving 1 million hours of management time and removing c1000 tasks
Connected colleagues
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
38 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving product availability
Produce - online Grocery - online Fresh - online
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jun Jul Aug2018 2019
94
95
96
97
98
99
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
39 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Energy meters
Automatic doors
Refrigeration
Bakery equipment
Lighting
Heating amp Ventilation
Lifts
Solar panels
Fuel
Connected buildings
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
40 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Investing in the core
Cafeacute BakeryProduce
Overall customer satisfaction
14
Before Before Before
AfterAfterAfter
Core investment this year
250 supermarkets
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
41 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving the appeal of our Supermarkets
Beauty transformation Distinctive features
Wellness
Tu
Food to Go
Highlighting new offersIntegrated GM amp Clothing
Serving more missions and driving returns
Food concessions
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
42 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving supermarket customer satisfaction
Source Lettuce Know in-store programme Supermarkets only
Speed ofcheckout
Ease ofcheckout
Knowledgeof
colleagues
Friendliness ofcolleagues
Availabilityof colleagues
Value formoney spent
Appealingpromotions
Quality of items
Varietyof items
Availabilityof products
Layoutof stores
Ease of moving
through store
Ease offindingitems
Cleanlinessof toilet
Cleanlinessof store
Q2 1920
Q3 1819
Store fabric and infrastructure Value proposition Service
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
43 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
3rd
2nd 2nd 2nd 2nd
3rd 3rd
4th
6th
5th
2nd
Improving customer satisfaction ranking
Layoutof stores
Ease of moving
through store
Ease offinding
items
Cleanlinessof toilets
Cleanlinessof store
In storelighting
Source Lettuce Know competitor benchmarking programme
Store fabric and infrastructure
Feb 2019 July 2019
4th
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
44 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Improving customer satisfaction ranking
Source Lettuce Know competitor benchmarking programme
4th
2nd =2nd 2nd
4th
5th
6th
Speed ofcheckout
Ease ofcheckout
Friendlinessof
colleagues
Availabilityof items
Knowledgeof
colleagues
Service
=2nd
4th
5th
Feb 2019 July 2019
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
45 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Driving further consistency is a significant opportunity
Source Lettuce Know in-store programme Supermarkets only
Availability Speed Cleanliness Friendliness
+12
+20
+18
+12
4 weeks to 22 Jun 19 4 weeks to 24 Aug 19
Opportunity stores FY 201920 YTD
Measure 6AM -8AM
8AM -10AM
10AM -12PM
12PM -2PM
2PM -4PM
4PM -6PM
6PM -8PM
8PM -10PM Total
Supe
rmar
ket
Overall Satisfaction
NPS
Value for Money Spent
Appealing Promotions
Quality of Items
Availability of Products
Friendliness of Colleagues
Knowledge of Colleagues
Availability of Colleagues
Variety of Items
Speed of Checkout
Ease of Checkout
Cleanliness of Store
Layout of Store
Ease of Finding Items
Ease of Moving Through Store
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
46 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering service and convenience
Fit for the future store model improving service and convenience
bull The right channels to market
bull A store operating model fit for the future- Flexible workforce- Right management structures- Improved performance management
bull Improving customer satisfaction
bull A better shopping experience
We can sustainably fund this
bull Continuous measurement
bull Digitising store operations
bull Continuous efficiency improvements to cover inflation
bull Targeted customer-centric higher returning investment in our stores
Delivering improved service and convenience while lowering our cost to serve
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
Driving value from our estatePatrick Dunne
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
48 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
49 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Advantaged locations
Sainsburyrsquos market share
Gross domestic household income
Supermarkets
Convenience
608
82021
72
UK popNumber
Source Kantar ONS
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
50 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Rent liability ndash stores only
0 2 4 6 8 10 12 14 16 18 20 22 24 26+
Argos Convenience Supermarket
Full years until expiry
Total rent liability in year
Weighted average unexpired lease term by rent
A flexible leasehold estate
14
8
4
Supermarket Convenience Argos
Years
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
51 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos footprint
includes ROI
Coverage 82 +4 86ArgosArgos in Sainsburyrsquos
Argos stores
Argos in Sainsburyrsquos
Total Argos stores
Collection points
Total Argos points of presence
At acquisition
-221823
13
836
3
839
+268
+361
+314
+47
602
281
883
317
1200
FY 201819
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
52 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Our property strategy
Growth
2
Sainsburyrsquosnew space
Space productivity
Value Creation
3
Mixed usedevelopment
Ownershipstructures
Freehold vsleasehold
Efficiency
4
Reducing occupancy costsestate management
Store closures
Asset disposals
CRampS Value for money
1
Energy and carbon
Capital spendreduction
Argos estate review
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
53 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
In-store investments
bull c10000 individual store initiatives in 2019
bull pound200m annual capital budget
bull New procurement model delivering c10 improvement on accessible spend of pound150m
In-store investments
Investing in over
450Supermarkets
Investing in over
200Locals
Investing in over
250Stores
CRampSValue for money
1
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
54 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
pound260 million invested in energy saving since 2011
bull 3000+ energy saving initiatives
bull 970000+ tonnes of CO2e saved
Active energy management
Solar PV LED lighting Environmentallyfriendly
CRampSValue for money
1
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
55 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
bull Supermarket pipeline reduced by 80
bull 72 schemes- 16 stores opened- 10 to be progressed
- 2 planned FY 201920
bull 46 commercially resolved
72
4131
1510
0
10
20
30
40
50
60
70
80
90
2013 2014 2015 2016 2017 2018 2019
10
No of schemes
Sold 18 sites pound82m cash 6 sites for sale cpound20m cash
Supermarket pipeline reduced
Growth
2
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
56 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Large Convenience Food on the Move
New convenience formats
Mansion House LondonAscot amp Woodhall Spa
Growth
2
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
57 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Concessions income
pound25m
pound45m
pound20m
pound25m
pound30m
pound35m
pound40m
pound45m
pound50m
201819 201920 202021 202122 202223 202324
bull Strategy high quality branded partners at scale - providing additional missions for customers
with a sales halo
bull Current income of pound25m per year - c650 fixed concessions- c4000 minor concessions
bull pound20m incremental opportunity over 5 years
Concessions
Growth
2
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
58 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
A growth strategy to deliver pound120m+ profit
Activity (2019-2024) Profit
New Convenience stores pound70m+
Build our existing retail pipeline pound30m+
Further concessions opportunities pound20m
Total pound120m+
Growth
2
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
59 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Nine Elms
bull Freehold site
bull We obtained planning consent for new store and 737 new homes
bull Sold site to developer who- Built a new store (no ongoing rent liability)- Built the homes- Paid us pound66m and built us a store for free
Mixed Use Development
Value Creation
3
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
60 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Mixed Use Development pipeline
Number of schemes Status Net receipts
3 Completed pre 2019
pound156m
6 Well advanced and in the planning process(2019-2024)
pound150m to pound200m
6 Identified and commercial approach being confirmed(2025-2030)
pound120m to pound150m
12 Forecast pound270m to pound350m
Greater London
02
0104
0305
Planning approved
In planning
Pre-planning
2025-2030 50 success rate at pound40m per site
Value Creation
3
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
61 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Store level metrics
bull Profitability
bull Rent cover
bull Cash generation
bull ROCE
Sainsburyrsquos estate review
Supermarkets Convenience
Store numbers 608 820
Proposed rationalisation 10-15 30-40
Efficiency
4
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
62 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Argos estate review
Argos
Total Argos points of presence 1200
Store numbers 602
Proposed rationalisation 60-70
New Argos in Sainsburyrsquos opportunities
80+
Standalone Argos stores as at FY1819
Efficiency
4
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
63 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
One-off cost of closure and impairment pound230m to pound270m
of which cash cost pound30m to pound40m
Ongoing EBIT benefit pound17m to pound23m
Closures to be phased over 2 years (starting FY 201920)
Estates review Financial outcome
Efficiency
4
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
64 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
An advantaged estate with profitable routes to growth
Portfolio context
bull Advantaged portfolio
bull Estate flexibility in a multi channel world
Efficiency
bull Estate rationalisation
bull Argos in Sainsburyrsquos
Growth
bull Retail store growth
bull Concessions
bull No legacy pipeline
Value creation
bull Mixed Use Developments
bull Estate management
bull Better returns from our capital investments
bull Lower operating costs
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
Cost transformationKevin OrsquoByrne
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
66 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
67 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Manages inflationary pressures BAU savings
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
68 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Delivering annual savings
Store management
pound31m
Procurement GNFR
pound50m
Groceries online productivity
pound17m
Energy savingsand running costs
pound5m
Manages inflationary pressures
BAU savings201819
Retail HR
pound19m
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
69 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Delivers structural change and supports investment in the customer proposition
cpound500m by 202324
Strategic cost transformation projects
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
70 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Property
Store operations
Strategic cost transformation 5 year plan
Addressable cost base
pound5bn10
pound13bn
Logistics amp Supply Chain
pound1bn
Centrals amp support functions
pound12bn
pound15bn
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
71 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound100-pound150m
pound150-pound200m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
72 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
260
265
270
275
280
285
Unique opportunity to deliver structural cost change
150 - 200 bps operating cost ratio improvement by Year 5
Retail sales (inc VAT exc IAS 18 adj exc Fuel) and operating costs ex OIampERetail cost savings exclude Bank
201920 202021 202122 202223 202324
Operating costsales
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity
73 Capital Markets Day - September 2019
Be competitive on price Offer distinctive productsand new categories Grow connected servicesDrive efficiency to invest
in the customer offerMake shopping convenientsupported by great service
Provide a seamlesscustomer experience
Cost Transformation
We have a proven track record of delivering cost savings to manage inflation
We have a unique opportunity to deliver structural cost reduction by bringing our businesses together lower cost better for customers
Bringing our businesses together creates further opportunity