High-street retailer
J Sainsburyis on target to save £440m in
costs a year after bringing its IT back in-house, company chief
executive Justin King said today.
King said he was "delighted with the effect" of
taking back control of its IT systems.
Sainsbury outsourced most of its IT systems to Accenture in
November 2000 before terminating the contract five years early in
October 2005 at a cost of about £65m. It said at the time that it
expected to recover the exit costs in less than two years.
Sainsbury was now using IT to help underpin above-inflation
sales growth, said King.
This is a sharp turnaround from the retailer's performance three
years ago, when it was losing market share because of difficulties
with its
logistics management system which meant it could not get
products onto shelves on time.
An Accenture spokesman said the firm had not been responsible
for Sainsbury's automated depots.
King said bringing control of IT back in-house had also improved
product availability on the shelf and was underpinning sales
growth.
King said having direct control over its logistics had helped
Sainsbury achieve its 13th consecutive quarter of like-for-like
sales growth. Like-for-like sales for the 12 weeks to 22 March were
up 4.1%.
The move also helped the retailer deliver total extra sales
growth of £2.7bn against a three-year target of £2.5bn, said King,
enabling it to claw back lost market share.
King said the short first quarter and the early Easter had meant
compressing a lot of business activity into 12 weeks. "I am
delighted to say operations and [product] availability held up
really well, and that underpinned sales growth," he added.
King also announced Sainsbury had paid £273m for a half-share in
a joint venture with British Land, a property firm that leases 38
stores to the retailer. King said the investment would make it
easier for Sainsbury to redevelop 25 stores over the next 10
years.