Welcome to Redhill March 2018 1 Redhill Store Visit - March 2018 - PowerPoint PPT Presentation

Welcome to Redhill March 2018 1 Redhill Store Visit - March 2018

Running order Time Activity Location 13.15 - 13.30 Meet and greet Colleague canteen Presentations/Q&A Colleague canteen 13.30 - 13.40 Mike Coupe, Group CEO 13.40 - 13.55 Paul Mills-Hicks, Food Commercial Director 13.55 - 14.10 Simon Roberts, Retail and Operations Director 14.10 - 14.30 Q&A 14.30 - 16.15 Store tour Shop floor/online area 16.15 - 17.00 Tea Colleague canteen 17.00 Event ends Colleague canteen 2 Redhill Store Visit - March 2018

Sainsbury’s Redhill Pizza Counters Cooked to order Present in Redhill since 1899 Patisserie Valerie Sushi Daily products in bakery Concession Oct 2017 Re-opened after 3 year extension and refurbishment Argos 3,000 sq.ft. store in store >61,000 people New Tu store layout. 12,000 sq.ft within a 10 minute drive 61,677 sq.ft 42,000 sq.ft Coffee Pod sales floor food So Me Explore Learning concession Concession (mezzanine level) 3 Redhill Store Visit - March 2018

Mike Coupe Group Chief Executive 4 Redhill Store Visit - March 2018

Our strategy 1 2 Grow General Merchandise Further enhance our and Clothing and differentiated food proposition deliver synergies 3 4 Continue cost savings and Diversify maintain balance sheet and grow strength Sainsbury’s Bank 5 Redhill Store Visit - March 2018

Paul Mills-Hicks Food Commercial Director

Grocery competition continues to increase Average no. of fascia shopped per week UK net grocery space cumulative impact on sales 3.40 3.30 3.20 3.10 3.00 2.90 06/07 08/09 10/11 12/13 14/15 16/17 April Jan Jul Jan Jul Jan 2015 2016 2016 2017 2017 2018 Source: Nielsen Source: Company estimates 7 Redhill Store Visit - March 2018

Winning customer transactions Total Grocery YOY Transactions Growth % by Retailer 4.5% LY Growth 3.1% LY Growth 2.4% TY Growth 1.1% TY Growth Total Grocers Sainsbury's Source: Nielsen Panel, Rolling 52 we P13 201718 8 Redhill Store Visit - March 2018

We are maintaining our sales advantage 101 Total Grocery – 52w Rolling Sales Indexed 100 Total Sainsbury 99 98 Rest of Big 4 97 96 2015/16 2016/17 2017/18 Source: Nielsen Panel, Rolling 52 we P13 201718 9 Redhill Store Visit - March 2018

Enhancing our differentiated food proposition Be Deliver Serve new Consistent Colleagues competitive distinctive and food and experience make the on commodity exclusive grocery across channels difference with product products missions personal service 10 Redhill Store Visit - March 2018

Competitive on commodity product New Lower Speciality Price 65p vs Aldi 65p Quality Option Was £1.60 Everyday New Lower Price £1.10 vs Tesco £1.60 Importance of Commodity Base £1.80 Emotional Promo £1.00 Quality Great Regular Price £1.00 Importance of Functional Quality 11 Redhill Store Visit - March 2018

Distinctive products: Slow Cook Average sales per week (£m) Mar 2016 - Nov 2016 - Apr 2017 - Sep 2017 - Oct 2016 Mar 2017 Aug 2017 Mar 2018 2016 BBQ range Slow Cook Range expansion Range refresh (March) First Launch 2017 (May) 2017 (October) 2016 (November) Source: Nectar Loyalty data, we 10.03.2018 12 Redhill Store Visit - March 2018

Now market leader in Slow Cook 35% 30% Marks & Spencer 25% 20% 15% 10% Sainsbury’s 5% 0% 2018 2016 2017 Source: Kantar data, we 28.01.2018 13 Redhill Store Visit - March 2018

Distinctive products drive success 7% Total 5.7% 6% 1.0% 5% 1.8% 4% 3% 2.9% 4.7% 2% LfL price increases Mix: existing SKUs 1% Mix: new SKUs 0% Impulse ASP Christmas 2017 trading data 14 Redhill Store Visit - March 2018

Simon Roberts Retail & Operations Director 15 Redhill Store Visit - March 2018

Enhancing our differentiated food proposition Be Deliver Serve new Consistent Colleagues competitive distinctive and food and experience make the on commodity exclusive grocery across channels difference with product products missions personal service 16 Redhill Store Visit - March 2018

Our retail priorities Customers Colleagues Stores Quality & Availability Will have an Trusted and Operationally Obsessed with the effortless and empowered to sharper and more quality of our personalised deliver what matters efficient products and people experience most for customers 17 Redhill Store Visit - March 2018

Save to invest £1 billion over 6 years 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 £500 m + £540 m G uidance – Interim results, November 2017 18 Redhill Store Visit - March 2018

Cost base reduction 600 Total £540m 500 400 300 £m 200 Central 100 Logistics & Distribution Stores 0 15/16-17/18 G uidance – Interim results, November 2017 19 Redhill Store Visit - March 2018

Whilst our Net Promoter Score has been improving 65 Net Promoter Score 2016/17 to 2017/18 60 55 50 45 2016/17 2017/18 Forecast 20 Redhill Store Visit - March 2018

Store operating model Create winning The best Effortless and Enabling smart stores through agile leadership teams colleagues personalised support and service technology 21 Redhill Store Visit - March 2018

Simplifying our structures 22 Redhill Store Visit - March 2018

Colleagues – the ‘new deal’ covers…. Trusting and rewarding colleagues fairly 23 Redhill Store Visit - March 2018

Enhancing our differentiated food proposition Be Deliver Serve new Consistent Colleagues competitive distinctive and food and experience make the on commodity exclusive grocery across channels difference with product products missions personal service 24 Redhill Store Visit - March 2018

Q&A 25 Redhill Store Visit - March 2018

Introducing the team Bringing our strategy to life Food Strategy Food Strategy Paul Mills-Hicks, Food Commercial Director James Bailey, Director of Grocery Colleagues & Customer Service Our Space Simon Roberts, Retail & Operations Director Graham Biggart, Director of Commercial Operations Grocery Online Argos Clodagh Moriarty, Director of Online John Rogers, CEO - Sainsbury’s Argos 26 Redhill Store Visit - March 2018