Sainsbury’s eyes up £1bn cost savings in new strategy update

Sainsbury’s eyes up £1bn cost savings in new strategy update

Sainsbury’s has set its sights on £1 billion of cost savings over the next three years, as it plans to invest in transforming its capabilities, taking another leap forward in efficiency, productivity and customer focus.

As part of its ‘Next Level Sainsbury’s strategy, the supermarket retailer is making eight commitments that it will deliver by March 2027:

  • Food volume growth ahead of the market
  • Customer satisfaction higher FY27 vs FY24
  • Colleague engagement higher FY27 vs FY24
  • Deliver their ‘Plan for Better’ commitments
  • Deliver profit leverage from sales growth
  • £1bn of cost savings over three years to FY27
  • £1.6bn+ retail free cash flow over three years to FY27
  • Higher return on capital employed

The ‘Next Level Sainsbury’s’ strategy builds on the success of their Food First strategy, launched in November 2020. Within the new strategy, the retailer aims to deliver further grocery market volume share gains by bringing more of Sainsbury’s food range to more customers, becoming the first choice for food for more people, continuing to attract more bigger basket primary shoppers.

It will also continue to build a world-leading Nectar loyalty platform offering personalised, rewarding and integrated loyalty and market-leading retail media capabilities; build on Argos’s strengths in convenience and value, growing frequency and spend through improved range and relevance while also delivering further operating model efficiencies; and finally invest in their capabilities across technology and infrastructure and deliver another £1 billion of structural cost reduction, underpinning these objectives and driving growth and efficiencies.


Chief Executive, Simon Roberts said customers have recognised the progress they have made.

“Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for – outstanding value, unbeatable quality food and great service,” said Mr Roberts.

“Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsburys, Argos and Nectar.

“We’re going to build on what’s driven our success since 2020. We’re determined to be First Choice for Food, ensuring more customers in more of our stores can enjoy more brilliant Sainsbury’s food. That means more space for our food offer, while still delivering the general merchandise products customers want from us.

“That way, not only will we find more ways to delight new and existing customers, we will also continue growing volume market share.

“While I’m proud of the progress we’ve made to date, we’re only just at the beginning of rediscovering quite what this business is capable of. By taking Sainsbury’s to the next level, delivering for customers and colleagues, we will also deliver enhanced returns for shareholders through a share buyback and committing to a progressive dividend.”