J Sainsbury Plc Ord

Chief Financial Officer. I will now hand you over to Chief Executive Simon Roberts for the presentation.

Thank you.

Well, good morning, everybody, and thank you for joining Blanard and I to talk about our quarter one trading covering the period, the 16 week period to June the 24th. I'm going to talk about our trading performance in the quarter. And then, of course, we'll be happy to take everyone's questions. The webcast I'm going to show the slides on now over the coming minutes is also available on our website. OK, so first, a reminder, and you know these well, of our key priorities that we set out back in November 2020. Today, we're a fundamentally stronger business than we were two and a half years ago. our priorities have driven that reset with our relentless focus on food first improving our food business supported by our brands that deliver delivering a stronger general merchandise business and as a result of our focus on safe to invest we're delivering the structural cost reduction that we committed to meanwhile in connected to customers nectar is becoming an ever more powerful driver of the way we talk to and connect with our customers and a future profit driver too. In this quarter, we have successfully launched Nectar Prices. We're also really encouraged as a team by the progress we're making on Plan for Better. And we've now fully integrated sustainability into the core of the business and into our decision making. Now, in April, we talked about the progress we've made and our determination to build on that stronger position. We're continuing to make bold choices to save costs and to invest where it matters most to our customers and to our colleagues too. And it's as important as ever that we maintain our improved value position. And we're determined to keep prices low on the products that customers buy most often. We're also committed to pass on input price savings to customers as soon as we can. And the Nielsen data suggests that we're leading the industry in doing this. We're also continuing to support our colleagues through the cost of living crisis. We've extended free food available in our stores, distribution centres and contact centres indefinitely. And we're also offering additional colleague discounts over this summer. Now, we know that when we prioritise investing in our colleagues and our team and our people, we see the benefit in colleague engagement and that comes through into our customer service. Now, the innovation muscle that we've developed has been a real strength for us this quarter, and customers are recognising us more and more for our choice and for our quality too. And in the quarter where customers have had an unusually high number of big national occasions to celebrate, they look to us as the clear choice to help them do that. Now, I said in April that one of the factors behind the profit guidance range that we provided for the year ahead was that we wanted to retain the flexibility to make the right choices for the business over the course of the year for all of our stakeholders. Now, there's still a lot of uncertainty out there for customers and a lot of the year still to trade. So whilst we're pleased with the momentum we've generated in quarter one, particularly in grocery, and we're excited about the plan for the rest of this year, we're retaining that guidance range at this stage. So let's turn now to the quarter one numbers. Grocery sales, as you can see, increased by 11% over the quarter, an acceleration of about four percentage points on our quarter four. Now, inflation was less than 1% higher quarter on quarter, so the majority of the improvement was driven by a return to volume growth. Some of this is carrying over momentum from last year, but we were also helped by the particularly strong performance through the bank holidays and events, and of course, the good weather that came towards the end of the quarter. Now, Argus continued to gain market share, growing ahead of the market with strong consumer electronic sales, offsetting weaker seasonal sales earlier in the period when the early spring summer weather was clearly cooler. And it's worth noting that the 5.1% growth quoted here would have been more than 6%, excluding the impact of the closure of Argus in the Republic of Ireland. We have now fully closed the business. So the impact of this over the next three quarters will be closer to two percentage points. Clothing sales were also impacted by the cooler spring weather. Two customers are a bit more seasonally driven and bite aware. And so we saw a big contrast between weaker sales earlier in the quarter and then stronger sales growth as the weather improved. In what was a highly promotional market, full price sales participation increased over the quarter year on year. Fuel sales were down 21 percent, reflecting both lower input prices and volume declines. Now, in grocery, we've outperformed the market this quarter with strong volume momentum, reflecting the continued benefits from our value proposition, the launch of nectar prices in April and a strong performance relative to the market across all the key events in the quarter. And we're really encouraged that we've made gains from both primary and secondary customers through this period. For over two years now, we've consistently inflated month in, month out behind key competitors. And customers are increasingly relying on us for consistent value, particularly across the products that they buy most often. Now, we've committed to customers that we will pass on input price savings and the basket of our top 100 selling products is cheaper now than it was in March. And that's against the market where prices have gone up. The box on the right hand side of this chart shows the year on year improvement in our price position versus key competitors across all the products that we can match. Now, of course, value is not just about lower prices, and we're delivering for customers across the full breadth of prices and promotions, increasingly through Nectar prices and personalized offers through your Nectar prices. And as you know, we launched Nectar prices in April, and we've seen a fantastic customer response, with more than a million new customers signing up to Digital Nectar in the quarter. We're rolling out Nectar Prices to more and more products, and it's now available on more than 3,000 products, including own brands, fresh products, and fruit and vegetables too. And customers have already saved over £90 million through shopping Nectar Prices since we launched in April. Customers are also continuing to manage their household budgets by switching into our own brand products. And our new Stamford Street range brings a number of entry price point products together under one brand and expands the range to making it easier for customers to find great value when they shop with us with around 200 everyday staples at low prices. Now, more than 40 percent of these products feature in the price match, which is now at its highest level to covering around 370 products in total. Now, the first quarter has given customers lots of opportunities to get together with friends and family across many big events. And we've continued to show the best of Sainsbury's here, outperforming the market by at least 3% across all the key seasonal events in quarter one, from Mother's Day through Easter to the late May bank holiday. And of course, the coronation building on our performance last year. We launched over 300 new products in the quarter with a big focus on fresh, taste the difference lines. And that drove fresh, taste the difference sales growth of 12% in the quarter. And as customers look to enjoy picnics and barbecues over the summer with hopefully more good weather, we've almost tripled our summer innovation in taste the difference compared to 2021. We've consistently invested in our colleagues and as a result, we're seeing strong colleague engagement scores. Importantly, this is also feeding through into further improvements, as you can see, in our customer service. Now, the team and I are really proud that our team continues to deliver leading customer satisfaction scores in supermarkets ahead of our full choice competitors. And we're seeing some recovery in customer satisfaction, too, as the impact of higher prices start to unwind. Since launching Nectar Prices, we've seen a step up in customers rating of our great promotional offers. And we continue to lead on key areas that really matter to customers, such as speed of checkout and availability of our colleagues. So let's now turn to general merchandise and the performance in the quarter. The chart on the left here shows the detail behind the Argus sales growth. We've seen really strong growth across the lower margin key electronics categories, still benefiting from stronger availability year on year in mobiles, tablets and gaming consoles and ongoing demand for energy saving products. The chart on the right shows that this is where we've made the biggest share gains. This has been offset by weaker sales across the higher margin seasonal categories, with a later start to summer having had an impact, particularly against very good early summer weather through the same period last year. And home and furniture sales are down year on year, but marginally ahead of a weak market. overall we're pleased with the performance given the market share gains across all categories but we will face tougher comps through the remainder of the year as we annualize the start of the improvement in availability last year and of course continue to trade against last year's very hot summer weather so in wrapping up i would like to go back to the key priorities which are continuing to drive our clear focus and the momentum we're seeing across the business Looking ahead to the rest of the year and how that might play out, there's still a lot of uncertainty, but we are encouraged by our performance in the first quarter and we remain very much on track with the guidance we set out in April. So thank you for listening to that. Brandon and I are now very happy to take your questions.

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Our first question comes from Andrew Gwynne from Exane BNP Paribas. Please unmute yourself and begin with your question.

Hi, everyone. Hopefully you can hear me. We can hear you, Andrew. Yeah. Apologies. Yeah, but no video today, unfortunately. So or maybe fortunately. But your three questions. So firstly, non-food, you know, slightly better, as you mentioned. What do you think it says about the consumer? Second and third, really related to the fuel investigation. So firstly, what do you think the industry got right and wrong? And then thirdly, going back on the fuel, what does it say really about the potential to profit in the future? Thank you.

Okay, thanks, Andrew. Let's start with GM. So, I mean, just in terms of, you know, in the quarter... Clearly, the weather came late in the quarter. Remember, we were having our prelims call at the end of April and we were all wishing and hoping the weather to come soon. It took a lot longer, didn't it? And so, you know, clearly we are encouraged by our market share gains in the quarter. And that's come through, I think, really strongly. And look, when the weather came, we were really ready for it. It just came later than last year and therefore delayed. the benefit in the quarter. You know, that said, we've seen, you know, stronger sales as a result of good weather and we're well set for, you know, the summer that's still to come. So I think all in all, in terms of the performance, the slower start, well set now, momentum building, and we think we're in a good place ready to take, you know, advantage of the volumes as they pick up. In terms of your second and third questions, so... on fuel, right and wrong. I mean, I think maybe a couple of comments here. I mean, I think the first thing to say is it isn't that long ago, is it, that we were using fuel as an industry to drive customers to our supermarkets? You know, fuel stunts was a very common approach in the industry. And I think, you know, one of the things that I think we would reflect on is that We're now putting all of our energy and focus into having the best value in food. And that's what's really driving our volume performance. And so I guess the first thing to say would be that's our priority. And that's been a big shift for us and for others, too. So prioritizing value in food rather than offering promotions in fuel. And I actually think that, you know, when you think about what's happened for our business, we've really focused, haven't we, in a very intentional way in getting our value position in a much stronger place. Three years ago, we weren't good enough value. We weren't competitive enough. We've really addressed that. Our cost saving program has been fundamental in helping us to deliver improvements in value that you can see in these results. And that momentum is really building. So. I guess in terms of what we got right, I think we really saw the need to get our value in better shape two and a half, three years ago. That started to feed through in better customer perceptions and improved volumes. And then the last thing I would say on the question is that I think, you know, food first has been fundamental for us. It's really changed the focus in the business. It's focused the way that we think. And it's put us in a much stronger position so that we can be both very competitive on food and also continue to be very competitive on fuel, too. And then in terms of what does the investigation perhaps tell us about the future to grow profit, perhaps between Planet and iPlanet?

So I think the one thing I would say is this industry is always under scrutiny and will always continue to be under scrutiny. But if I look back over the last few years, I think we've got the balance really right. And that protecting our sort of flexibility and then what we did towards back end of last year has really helped us. And we've got the balance right for customers. We've invested in our proposition and we've really invested in value and we've done a bit of a price reset since we started this strategy four years ago. But sorry, three years ago, we've really invested in our colleagues. You can see that what we've done on paid leading rate of pay in the industry. We've invested in food and also increased colleague discount days as well. So the reset is really good for us. And we see that as positive. And that in turn has led us to have positive results. um volume and we're really seeing that momentum coming in the investments that we made in q4 because we protected that flexibility is driving that volume today and we continue to sort of protect that flexibility so we can continue the momentum that we currently have in the business today one of the things that's important for us and why volume is so important is getting more volume over your fixed cost space is what drives that likely for profitability and hence as part of our food first program that was one of the key principles that underpinned it simon anything else to build

No, I mean, I hope that gives you a good sense. I think clearly, you know, we've still more to do. You know, we're two and a half years into our plan. As Blannard says, we're really starting to see the benefit of volume. And as a team, we're very focused on how we keep driving that, but also how we keep driving the cost savings to underpin it too. Thanks, Andrew.

OK, thank you very much.

Our next question is from William Woods from Bernstein. Please unmute yourself and begin with your question.

Good morning, both. Thanks for taking the question. I've got three, if I may. The first one is on. You've talked about the end of inflation and talked about cutting prices. I suppose. Are you seeing sequential or year on year deflation here? And are you seeing this across your entire basket? the second one is how is your stanford street range performing and why did you consolidate into one brand it feels like it slightly goes against the trend of making value ranges not look like value ranges and then the final one is just on pricing in general merchandise um are you also seeing the end of inflation here thanks well thanks let me let me try and take each of those in turn um so look i'm gonna first on inflation you know clearly

what we're seeing here is the beginning of food inflation starting to come down. And the reason we say that is because when we look at the price of the 100 highest volume products that we sell, what we've seen is the price of those products at the end of the quarter compared to the start of the quarter, those prices have come down. And they've come down at Sainsbury's when actually in the wider market, they've continued to go up. And we think that's just a really important proof point that prices at Sainsbury's, we're leading the market and bringing prices down on those products that matter most to customers. In terms of your question on kind of where we are on inflation overall, clearly, as lower input prices come through, we're really committed to pass the benefits on to customers as soon as we can. We're seeing that happen first in fresh foods. We've seen that clearly in products like bread and butter and dairy products and milk. You know, and I think we always said, didn't we, that we'd expect those products that saw the impact of inflation first will be those that would see this rollover happen first, too. And so it will take some time in other categories, particularly packaged canned goods. It will take longer for the impacts to pass through. And then, of course, whilst commodities are starting to come down in some areas, you know, we're not going to see lower labour costs, for example. Those costs are now fixed in. Energy is taking time. So I think clearly everyone wants inflation to come down faster, but it is going to take time and it's not going to happen as quickly as I suspect everyone would wish it to. In terms of over the balance of the year, we expect inflation to come down, but we expect to still retain a situation of inflation. And I think prices are just going to be going up less quickly than they have been. On Stamford Street, we're really pleased with Stamford Street. We think it's been a really positive move for us. The reason I say that is exactly to your question is it's made the visibility of our entry price points even more compelling in store and online. So if we were to walk our store together now or look at our online pages, just the vibrancy and the identity of the packaging really stands out for customers. Customers really like it. We wanted to bring Sainsbury's quality best prices in our entry price point tier. And so by bringing everything together under Sainsbury's Stanford Street, that's what we've done. And entry price point is our fastest growing product here. So only a few weeks in, but really encouraged so far on the team. We've done a fantastic job moving quickly to get all of that rebranding on product into store and online as quickly as possible. And then pricing on GM, look, I think, you know, same rules apply here, right? For all the obvious reasons, customers are watching every penny that they spend. A lot of focus on, you know, what are customers buying in GM and how do they get the best value? So, you know, we've got really competitive prices in Argos and on our general merchandise business. You know, we pass on benefits as soon as we can. And it's clear in the market share performance of Argos, I think, that customers are really trusting the value in the Argos offer.

Excellent. Thank you. Thanks.

Just a reminder to ask a question, please select the raise hand feature, which can be found at the bottom of your Zoom interface. If you're dialing in, please press star nine. Our next question is from Nick Kutler from City. Please unmute yourself and begin with your question.

Hello, Nick. Hi, good morning to you. If I may, I'll go one by one if that's easier. Firstly, given the relative strength of a grocery volumes and the kind of the absence or lower level of elasticity, Do you have a sense of where customers might be cutting back to compensate or maybe they aren't cutting back? So I guess in that sense, it's more of a question on your view of the health of the UK consumer. I guess in this quarter as we move forward, please. Thank you.

Thanks, Neil. Let me take that one. So, look, I mean, I think important to say just in answering your question that there are some effects in this quarter that we think gave us some tailwinds. So clearly we've been better value. But I would just highlight the fact to two elements. One would be that we launched nectar prices in the quarter. Clearly, that's got off to a very good start. And, you know, we don't plan to launch next to prices every quarter. So that's given us some benefit in this quarter, given it was such a significant launch for customers and given customers have been really buying into that quickly. First point. Second point is the number of events in the quarter. And if we think about the bank holidays, the coronation, Easter, Mother's Day, it's been a quarter where. our strength in delivering great choice and products for customers has really come through. As I said, we beat the market by at least 3% on each of those event weeks. And so clearly as the year progresses, We don't have as many of those to come. And thirdly, the third point I would just make is that, you know, we start to get towards a much tougher comparative. Now, you remember last year, we really picked up our performance in quarter two and onwards. So just in terms of when you look at our performance relative to others, important to bear those things in mind. In terms of where the consumer's at, look, I think we're not seeing any fundamental changes. Customers are being very savvy. on food. They are making choices to make the budget go further. The reason we've grown our volume, we think, is because customers are really trusting our prices in a way more than they have before. As we said, inflation was up about 1% in the quarter. The rest of the 4% came from improved volume. So we're seeing more customers shop at Sainsbury's. We're seeing customers really buying into our value. And if we think about the fact we've you know, invested 560 million over two years, another 60 million in the quarter. We're being very selective, Nick, about how we're investing this. We're investing it in areas which really drive the flywheel. And that's important. More volume of a fixed cost. And we're being very focused on that investment, giving customers value, but doing it in a very selective way. And on GM, look, I think what we're seeing here is there's a lot of uncertainty, clearly, in customers' budgets, you know, the impact of interest rates. We haven't really seen that come through yet. And so, That's the reason why we think it's very important to retain flexibility this year. Again, we'll have to make sure we are competitive where we need to be. And as customers are really tightening their spending on the basis of interest rates and other factors, we're going to have to make sure that we really adjust our offers that we deliver for them in what's going to be quite an uncertain period.

Are you seeing any kind of canaries in the coal mine, the kind of the weak performance in furniture as a market and maybe, I don't know, larger ticket electrical to white goods? What are you seeing in those categories and how is that changing over the quarter?

There was a couple of key effects mentioned in my opening comments. Obviously, the impact of the weather was significant in the quarter. It came much later than last year. And so that's the reason why in clothing and the seasonal categories, we saw a much slower start. That recovered in June. But I would also say that customers are managing within a budget. So when warmer weather comes, customers are moving spend from somewhere else in order to buy the barbecue or the paddling pool. It's not net extra spend. And so I think, you know, that's quite a different customer behavior from, you know, what we might have seen before where customers just net-net spent more money. And so I think the differences in the quarter were the later weather, you know, clearly much tighter focus on what everyone's spending and an absolute pursuit looking for the best value. And that's one of the reasons why we think we're winning. We're giving customers the best value we can. We're passing on savings as quickly as we can. And customers are already noticing that. So our volume's improved.

A final one, probably in your power, Ali, but on health and beauty, how much of an opportunity do you think you have as perhaps of a step back in the market?

Look, I think we're really encouraged with the steps we've taken as a team over the last two or three years in all reality to improve our health, our beauty and our well-being offer if you know if you if you spend time across our supermarkets and three to four hundred stores now we've got a very extensive range we're taking share as a result of that but we're also you know wherever we can taking opportunities to make sure we improve the use of our space as well so for example as we've taken the pharmacies out of our stores we'll be redeploying that space into areas that customers want to shop more range from So net net, you know, growing, growing our share in health and beauty through the actions we've taken and also making sure that we make every square meter of our space work really effectively in our stores. What customers want to buy.

Super. Thanks so much. Thanks, Nick.

Our next question is from Isabel de Breva from Morgan Stanley. Please unmute yourself and begin with your question. Hello. Good morning.

Hello, Isabel.

I have two questions. Hello. The first one was around the price cuts we have seen so far this year, a lot of which have been in private label. Are these price cuts the result of the commodities rolling over or are you seeing any increase in the actual levels of competition in the market? And then more broadly, how would you expect these price cuts to evolve by category? So fresh versus packaged foods versus the perimeter of the store and so on. And then my second question is, is around the recent political events, shall we say, surrounding the grocery industry and whether you could comment on how you see this evolving. Do you think we could head for a French style of government intervention? And then more broadly, what do you think will be the end outcome of the hearings and the probes?

OK, well, shall I maybe take your second question on kind of recent events and the focus on the industry? And maybe Banner can give us a sense just in terms of the focus we're putting on price and passing on to customers. So let me take the second question first. Look, I think let's face into some of yesterday's news and the recent events. Look, I think it's very clear, isn't it? You know, grocery retailing is the most competitive industry out there. We make less than 3%. margin less than 3p in the pound of everything that we do. And last year we saw, as you know, our profits come down a bit by 40 million year on year as we reinvested for customers and made sure that we reinvested for our colleagues too and really balanced those choices across all of our stakeholders. And I think, you know, our view on this is that, you know, as an industry, not just the Sainsbury's industry, the whole industry has really stepped up to, you know, make sure that food's available for customers at the best value possible and and become more efficient. And I think the important point I'd make here is that at Sainsbury's, we have saved over £900 million of operating costs in two years, £1.3 billion over three years, and that's absolutely critical in enabling us to reinvest in that value. And so my view on this is I don't think there's much to be gained from people blaming each other. There's a lot to begin focusing on efficiencies and making sure that everyone understands we're doing the best job we can to give customers that value that they demand and expect at the moment. In relation to yesterday's review on fuel, we welcome transparency in fuel pricing. We think it's a good thing. We think it's a good thing because customers will see where the value is. And we have always been either the first or second most best value in any locality for fuel. We're very competitive for fuel. And by having more transparency of that, customers will see that. You only have to look at the price at a Sainsbury's supermarket of unleaded or diesel this morning compared to some of the other competitors in the market. And you'll see how good our value is and has always been. And, you know, I think we should just, you know, absolutely reflect to that. One of the things we've been doing in our food first strategy is ensuring that any benefits we see from Argos or Habitat or two or fuel get recycled into food prices. So at the heart of your question, we're very focused on our plan. We're operating in a very low margin industry and we're putting everything we can into the best value for customers and making sure that all of our stakeholders, we balance those choices against. And over time, I would expect more and more understanding of those choices that we've made. Coming back to Neuroterm in terms of what we're doing on price and passing on.

So look, we are absolutely laser focused on continuing to deliver value for our customers. And you'll have seen over Q1 that we launched Nectar Prices recently. That's across about 10% of our products at the moment. We've had support from our suppliers to do that, but that saved our customers over 90 million since we launched Nectar Prices. We further invested in the areas that matter most to our customers. We've done about 60 million of further investment in that. And you can see that in what we've done on milk. You've seen the price of milk come down. You've seen bread, butter, pasta and toilet roll come down. These are the products that matter most to our customers, the products that they buy most often. When we look at our top 100 selling products, we are cheaper today than we were last month. So this come down period on period for our customers. So great value has been offered across the estate. The other thing that we're absolutely committed to is that as inflation, as we see the benefit coming through to us, we're committed to passing that through to customers as well. So we'll continue to pass that through. However, when we stand back and look at inflation, there's still inflation in the system. We think it will be low single, mid single digits at the year end. But the headline rates that you're reading on the ONS, our customers are experiencing about half of that. So it's not quite in line with what you're seeing in the newspapers on that.

But we are absolutely focused on value and passing through those price cuts to our customers as they come through.

Thank you.

So you haven't seen any change in the underlying levels of competition?

No, thanks for the question. So, look, I mean, I think the market continues to behave differently. very rationally and I think that's very clear to see and we've seen in the quarter no significant or sustained change in how any of the competitors are behaving. I think what's broadly clear to see is those that were the first to pass on the impact of higher prices have been the slowest to pass on lower. And similarly, like us, where we were trying to absorb inflation for customers and pass on as quickly as possible. That's one of the reasons why our value position has continued to improve. And it's absolutely key, we think, in our improved volume performance in the quarter.

Thank you.

Thank you.

Our next question is from Sridhar Mahankali from UBS. Please unmute yourself and begin with your question.

Hello, Sridhar. Good morning. Sridhar? Morning, Simon. Hi. Morning, Simon. Morning, Simon.

Can you hear me? We can. Yes, thank you so much. I'm having tech issues this morning. Three questions as well, please. Just picking up on that point you just made, Simon, on volume. How should we think about it for the rest of the year? I know you've called out events and execution around those events like Nectar launch, Nectar crisis launch. But should we be expecting sustained positive volume through the year with sequentially lower inflation? And also on that volume point, how is that helping your supply negotiations? Are you seeing a greater move there competitively versus your other retailers? That's the first one on volume. Secondly, on general merchandise and clothing, can you give us a sense if, at least from a bought-in gross margin point of view, is that trajectory improving into second half with lower factory gate pricing from Asia and lower freight costs and stronger sterling and those kinds of things? And the last one on fuel, Does the sales performance in Q1 have anything in terms of working capital contribution, any impacts there, or is it entirely in line with your expectations?

Sridhar, thank you. Well, why don't I maybe take volume and then maybe Banerjee take the imploding and fuel.

Yep.

Okay, so look on volume, just to emphasize the points related to your question. First of all, we're clearly really encouraged with the volume performance. It's congruent with the strategy that we've been driving. And as I said, there were some one-off effects in the quarter, particularly the number of events, particularly the launch of next prices. and particularly the fact that we head into some tougher comps looking forward that we just want to make sure that we've been clear about. That being said, it's really clear that the actions we're taking strategically are driving improved volumes. That's because customers are seeing better value in the offer, particularly in food. And as we've seen prices start to come down on the top 100 products, where in the rest of the market they've gone up, customers are clearly making choices to shop more with us as a result of that. So I think when we look out over the rest of the year, we've got a lot in our plan in the food business. We'll continue to make the right choices selectively about how we improve value, what we need to further, but also making sure that we just continue to do a great job day in, day out, service availability, convenience. These are the things that really matter to customers. And again, one of the reasons why we're performing more strongly at the moment. On your question about suppliers, I would say just look, Nectar Prices has been a fantastic program for us. We're in the early days. Really would want to recognize the fantastic job our teams have done right across things with so many parts of the business have been involved in launching Nectar Prices, commercial teams, marketing teams, technology teams, retail teams. Everybody has been involved in this and their suppliers really want to be part of it. And so when you look across 3,000 suppliers Plus products today, 10% of our volume coming in next price is clearly suppliers want to be part of programs and businesses where volumes are really moving forward. And so, you know, next to prices is is key for customers. And it's also key in working with suppliers to invest in our offer with us. And that's one of the things that we're seeing happening. In terms of over the balance of the year, therefore, we're very focused on making sure we deliver for all of our stakeholders. We'll be selective about where we need to further improve value. We'll always pass on benefits to customers. And on GM, look, I think the environment is more challenging. Interest rates are yet to feed through fully. And so we'll just be very focused on making sure we're giving customers value where they need it most and making sure we do the best job in terms of the GM offer.

you've asked a great question on GM margin and there's an awful lot going on on GM this year so I'd start by we're really pleased with how volume is performing And we're delivering against really tough comparatives. But there's a few dynamics in there. So we are continuing to gain market share. So pleased with that. But the summer weather has been cooler, a little bit slower to arrive. And what we've seen is customers mix into tech and into electronics, which is a lower margin category than what we'd see in seasonals. But where we sit today, we're relatively comfortable. We're hoping the weather will arrive and it will correct itself as we travel through Q2. The second thing that we need to look at is we had a really strong Christmas. So if you think about the second half of last year, we had the postal strike. We really benefited from that because of our fantastic delivery proposition. Again, we wouldn't expect that to repeat. And that's sort of in our forecast and within our range. And then sort of the final thing that you need to factor in is availability. So we really corrected our position on availability. we're starting to see that annualize as well. So some really tough comparatives in there. What I would say is we're happy with the momentum in the business. We have a range in our guidance. The reason we have that range is we are cautious on the consumer. We haven't seen those mortgage rates flow through yet. So it's a watch and wait for us at the moment to see how the consumers behave as we travel through the rest of the year on that one. On fuel, Look, we are happy with our field position, working capitalism, aligned with our expectations. We'll see how we travel through the year, what happens with volumes, particularly if the consumer starts feeling a bit of a pinch towards the end of the year. But if you recall, when we talked about our cash and the cash bridge that we had last year, we had some working capital tasks in there. So we're comfortable that we're continuing to manage that as we travel through the year as well.

Thank you. Thanks, Rita.

Our next question is from Frederick Wild at Jefferies International Limited. Please unmute yourself and begin with your question.

Morning, Frederick. Good morning. Thanks for taking my question. So I just wanted to follow up on that volume point. If you think about it as maybe 300 bits sequential benefit in the quarter versus Q4. Do you have a sense for how much were the events and bank holidays? How much is the next price of help? Or to put it another way, How would you characterize volume performance in different periods within the quarter? Thank you.

Thanks, Freddie. Well, look, I don't want to repeat myself, but I will just emphasize a couple of key points in relation to your question. I think there are a couple of key elements in the quarter which sit behind the volume story. First, as we've said, has been the strength of the events. And, you know, when you look at our presentation slides this morning, you can see just event over event over event how strong those events have been. And given the number of them and given the fact they don't repeat every quarter going ahead, that was an important element of the volume story in the quarter. As I say, we beat the market by at least 3% for all of those event weeks. And then secondly, clearly, given the timing of our quarter end, the 24th of June, we had a lot of the benefit of the weather in the month of June as it turned clearly better for us. And that definitely helped the food business. But it also helped the GM business, too, as Blunard said, as particularly clothing and seasonal sales picked up as the weather came. So we don't split out the effect of each of those. But just when we look at the quarter, I think the combination of those events, plus, as we've described, our significant further improvement in our value position. And as the top 100 products started to come down in price and therefore a lower price at the end of the quarter compared to at the start. Customers are more and more now really trusting our value. And so the underlying story here in our volume is one of a continued focus on the strength of our value position. Customers are seeing that alongside improving availability, really strong service. And so we're seeing more primary and secondary customers coming back, which is helping drive that volume performance.

Perfect. Thank you very much. Thank you.

Our next question is from David Brew at Bank of America, Merrill Lynch. Please unmute yourself and begin with your question.

Morning. I seem to have snuck in ahead of James. Sorry, James. I've just got two questions from my side. Just going back to the return to positive volume growth in grocery, can you remind us when the last time you saw positive volume? And then secondly... just in terms of your top 100 selling products, can you remind us what the sort of broader splits is there by category across fresh package, household products, et cetera? Thank you.

Well, thanks for the question. We're going to check back for you on the volume growth. It's a little while ago, for sure. So we'll come back to you on that one. I certainly think in the You know, in the life of our food first plan, this is the strongest volume performance we've seen over the two and a half years. And that's that's really key for us, because, you know, as we turn well into our third year now, a key proof point for us, as you know, is food volume share is our first measure of the eight measures we report against. And so to see a return to that in this quarter is something that we're encouraged by. And clearly, you know, all of our plan is geared towards doing that. We don't actually split out the products in the way you describe. What I would say is the top 100 products reflect all of the items that we all buy very frequently. So, you know, milk and chicken and bread and butter, fruit and vegetable items, dairy items, you know, the covered essentials, pasta and rice. So it's the products across the broader shops, your question, and it's the products that customers buy most often. And it's the it's the basket that we constantly track because clearly it's so important in forming price perceptions of how strong our value is. And that's why in that chart I shared this morning, you can see month in, month out with inflated behind the market. And why in this quarter, we wanted to really highlight the fact that the price of those products has come down since the start of the financial year.

Thanks, Simon. Thank you.

Just a reminder to ask a question, please select the raise hand feature, which can be found at the bottom of your Zoom interface. If you're dialing in, please press star nine. Our next question is from James Anstead from Barclays. Please unmute yourself and begin with your question.

Yes. Morning, Simon. Two questions left, if that's OK. Firstly, you showed us in your slides quite a few measures where Sainsbury's benchmarking very well versus peers, great offers, quality and others. But presumably the same survey has lots of other criteria as well, where Sainsbury's not necessarily number one. I just wonder if there's any that you would recommend. to highlight where you think you're lagging and there's room for improvement. And the second one was, I just wonder how firmly you push back on some of these claims that these discounted price matching schemes could be seen as anti-competitive.

James, thank you. We lost the sound a little bit on the first question. I think the heart of the question was, if we're doing well, which areas could we be doing better? I think that was the heart of your question. Great. Yes. Let me take that. So, look, I mean, I think one of the things that's really important to us as a team, we're clearly very focused on our plan, very focused on food first, brands that deliver and say to invest. And, you know, we're only partway through all the things that we know we need to do. So we're encouraging the momentum we're seeing on volume. We can always do a better job being even more consistent for customers on our customer satisfaction. We've seen good improvements, but we're pushing to be even stronger and even more consistent there. We're encouraged with our cost saving program. We're pushing really hard to make sure that over the balance this year, we get to the 1.3 billion that we've committed to. And we're very focused on the financial measures. So, you know, continuing to work on improving our returns, continuing to make sure that we deliver against the commitments we've made. So I would like to say and answer your question, always more to do, James. You know, we've got good momentum. We're very focused on delivering our plan. But as we come through this third year, we're pushing very hard across all of our measures to make sure that we deliver the commitments we've made. And there's still plenty for us to be focused on there. Just your second question.

James, can you? Yes. Sorry.

So there have been some kind of press speculation that these discounts are price matching. Zaldi price match that you and your some of your competitors run could be seen as as anti-competitive, which obviously is not the way you're advertising. I just wonder how firmly you push back against that suggestion.

Well, we're driven by customers and customers really like what we're doing here. More customers are shopping with us than we've seen in a long while. And they're doing that because they're really confident in our value. We're price matching now on around 370 products. There are more products in the price match than we've had over quite a period now with a higher propensity of fresh foods. And so we think it's really working for us. You know, it's working for us in giving customers that certainty that then when they shop with us, they can get things with quality at matched prices and they can also access, you know, the full range of assortment in our offer. And so, you know, it's been one of the key elements of reestablishing the really strong credentials on value. As I say, it's, you know, it's delivering well for us.

That's helpful. Thank you. Thanks, James.

That was our final question. I'll now hand back to Simon Roberts for closing remarks.

OK, well, thank you very much for joining us this morning. It's been really good to be able to talk through the questions and I hope the presentation has been helpful. Look, I think as a team, we're very focused clearly on the rest of this year. There's a lot still to do. As you can see, you know, we've retained the flexibility in our guidance to make sure we can make the right choices as we look out over the rest of the year. Thank you for listening this morning. It's good to share our momentum with you and we look forward to catching up soon.