1 Redhill Store Visit - March 2018

Welcome to RedhillMarch 2018

2 Redhill Store Visit - March 2018

Running order

Time Activity Location

13.15 - 13.30 Meet and greet Colleague canteen

13.30 - 13.40

13.40 - 13.55

13.55 - 14.10

14.10 - 14.30

Presentations/Q&A

Mike Coupe, Group CEO

Paul Mills-Hicks, Food Commercial Director

Simon Roberts, Retail and Operations Director

Q&A

Colleague canteen

14.30 - 16.15 Store tour Shop floor/online area

16.15 - 17.00 Tea Colleague canteen

17.00 Event ends Colleague canteen

3 Redhill Store Visit - March 2018

Sainsbury’s Redhill

Present in Redhill since 1899

Oct 2017Re-opened after 3 year extension and refurbishment

61,677sq.ft

sales floor

>61,000 peoplewithin a 10 minute drive

Argos3,000 sq.ft. store in store

New Tu store layout. 12,000 sq.ft

Explore Learning concession (mezzanine level)

Patisserie Valerieproducts in bakery

Sushi DailyConcession

So MeConcession

42,000sq.ft

food

Pizza CountersCooked to order

Coffee Pod

4 Redhill Store Visit - March 2018

Mike CoupeGroup Chief Executive

5 Redhill Store Visit - March 2018

Our strategy

Further enhance our differentiatedfood proposition

GrowGeneral Merchandiseand Clothing and deliver synergies

Diversify and growSainsbury’s Bank

Continue cost savings and maintain balance sheet strength

1 2

3 4

Paul Mills-HicksFood Commercial Director

7 Redhill Store Visit - March 2018

Grocery competition continues to increase

UK net grocery space cumulative impact on sales

2.90

3.00

3.10

3.20

3.30

3.40Average no. of fascia shopped per week

April 2015

Jan2018

Jan2016

Jan2017

Jul2016

Jul2017

Source: Company estimates Source: Nielsen

08/09 10/11 12/13 14/15 16/1706/07

8 Redhill Store Visit - March 2018

Winning customer transactions

3.1%

4.5%

1.1%

2.4%

Total Grocers Sainsbury's

Total GroceryYOY Transactions Growth % by Retailer

LY Growth

TY Growth

LY Growth

TY Growth

Source: Nielsen Panel, Rolling 52 we P13 201718

9 Redhill Store Visit - March 2018

96

97

98

99

100

101

We are maintaining our sales advantage

Total Grocery– 52w Rolling Sales Indexed

Source: Nielsen Panel, Rolling 52 we P13 201718

2015/16 2016/17 2017/18

Rest of Big 4

Total Sainsbury

10 Redhill Store Visit - March 2018

Enhancing our differentiated food proposition

Be competitive on commodity product

Deliver distinctive and exclusiveproducts

Colleagues make the difference with personal service

Consistent experience across channels

Serve new food and grocery missions

11 Redhill Store Visit - March 2018

Competitive on commodity product

Base £1.80Promo £1.00

Great Regular Price

£1.00

Was £1.60

New LowerPrice

£1.10vs Tesco £1.60

New LowerPrice65p

Importance of Functional Quality

Importance ofEmotional

Quality

Quality Option

Commodity

Everyday

Speciality

vs Aldi 65p

12 Redhill Store Visit - March 2018

Distinctive products: Slow Cook

Range expansion2017 (May)

Range refresh2017 (October)

Slow Cook First Launch

2016 (November)

2016 BBQ range(March)

Average sales per week (£m)

Source: Nectar Loyalty data, we 10.03.2018

Mar 2016 -Oct 2016

Nov 2016 -Mar 2017

Apr 2017 -Aug 2017

Sep 2017 -Mar 2018

13 Redhill Store Visit - March 2018

Now market leader in Slow Cook

0%

5%

10%

15%

20%

25%

30%

35%

Source: Kantar data, we 28.01.2018

2016 2017 2018

Marks & Spencer

Sainsbury’s

14 Redhill Store Visit - March 2018

Distinctive products drive success

2.9%

1.8%

1.0%

0%

1%

2%

3%

4%

5%

6%

7%

Impulse ASP

Total 5.7%

4.7%

LfL price increases

Mix: existing SKUs

Mix: new SKUs

Christmas 2017 trading data

15 Redhill Store Visit - March 2018

Simon RobertsRetail & Operations Director

16 Redhill Store Visit - March 2018

Be competitive on commodity product

Deliver distinctive and exclusiveproducts

Colleagues make the difference with personal service

Consistent experience across channels

Serve new food and grocery missions

Enhancing our differentiated food proposition

17 Redhill Store Visit - March 2018

Our retail priorities

Customers Will have an effortless and personalised experience

ColleaguesTrusted and empowered to deliver what matters most for customers

StoresOperationally sharper and more efficient

Quality & AvailabilityObsessed with the quality of our products and people

18 Redhill Store Visit - March 2018

Save to invest

£1 billionover 6 years

2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

£540m £500m+

Guidance – Interim results, November 2017

19 Redhill Store Visit - March 2018

Cost base reduction

0

100

200

300

400

500

600

15/16-17/18

£m

Central

Logistics & Distribution

Stores

Guidance – Interim results, November 2017

Total £540m

20 Redhill Store Visit - March 2018

Whilst our Net Promoter Score has been improving

45

50

55

60

65

Forecast

Net Promoter Score 2016/17 to 2017/18

2016/17 2017/18

21 Redhill Store Visit - March 2018

Store operating model

Create winning leadership teams

The bestcolleagues

Effortless and personalised service

Enabling smart stores through agile support and technology

22 Redhill Store Visit - March 2018

Simplifying our structures

23 Redhill Store Visit - March 2018

Colleagues – the ‘new deal’ covers….Trusting and rewarding colleagues fairly

24 Redhill Store Visit - March 2018

Be competitive on commodity product

Deliver distinctive and exclusiveproducts

Colleagues make the difference with personal service

Consistent experience across channels

Serve new food and grocery missions

Enhancing our differentiated food proposition

25 Redhill Store Visit - March 2018

Q&A

26 Redhill Store Visit - March 2018

Introducing the team

Food StrategyPaul Mills-Hicks, Food Commercial Director

Bringing our strategy to life

Colleagues & Customer ServiceSimon Roberts, Retail & Operations Director

Grocery OnlineClodagh Moriarty, Director of Online

Food StrategyJames Bailey, Director of Grocery

Our SpaceGraham Biggart, Director of Commercial Operations

ArgosJohn Rogers, CEO - Sainsbury’s Argos