Sainsbury’s closes wholesale operations, ups profit outlook

Published on
July 20, 2021
A Sainsbury’s storefront.

Sainsbury’s is closing down its wholesale operations to focus on its core business, according to a news report.

The London, U.K.-based supermarket chain operates more than 1,400 outlets, giving it a 16 percent share of the sector in the country. While Sainsbury’s has attempted to become a force in wholesale for several years, that strategy has now changed, according to The Grocer.

“As part of our plan to put food back at the heart of Sainsbury’s, we are simplifying our business so we can focus on what matters most to our customers: lower prices, exciting new products and convenient ways to shop,” a Sainsbury’s spokesperson told The Grocer.

While Sainsbury and SimplyFresh kicked off a wholesale partnership in January 2020, the company was notified by Sainsbury’s that “they have taken the unilateral decision to close down [its] entire wholesale business in the U.K. across all channels,” according to a SimplyFresh press release.

SimplyFresh, which specializes in healthy and local foods, has five supplied-by-Sainsbury’s stores and announced plans to sign up 30 retailers to the model this year, according to The Grocer.

“As a result of this decision, SimplyFresh no longer has an ongoing agreement with Sainsbury’s to supply their products to SimplyFresh and SimplyLocal stores,” SimplyFresh said.

Sainsbury must “prioritize what we do,” the spokesperson said.

“We have just started talking to our retail partners and colleagues about what this means for the future of wholesale and it will be a gradual process. We know these conversations may cause uncertainty for our partners and colleagues and we are committing to supporting them,” the spokesperson said.

Meanwhile, Sainsbury raised its profit expectations for this fiscal year to GBP 660 million (USD 896 million, EUR 762 million), an increase of from its previous forecast of GBP 620 million (USD 842 million, EUR 716 million).

The new forecast exceeds pre-COVID levels, according to the retailer.

Photo courtesy of Sainsbury’s

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