22 May 2007 | Paul Snell
Supermarket Sainsbury's is on track to reach its cost savings target thanks to improvements in its supply chain.
The retailer said it expected to save £155 million in the financial year 2007-2008. It has a savings target of £440 million over three years.
Announcing its preliminary results last week, the firm said it had made more savings in the supply chain and on IT than expected, but savings made in marketing were being reinvested in advertising.
In October 2004 the supermarket announced the "making Sainsbury's great again" programme. The plan intended to make £50 million of savings in its supply chain. It also outlined £40 million savings in IT, and £40 million savings in marketing.
Savings have also been made by bringing the firm's IT function in-house in October 2005, having previously outsourced it to Accenture in 2000.
The company said it also plans to significantly expand its non-food business, but it didn't have the supply chain infrastructure in place to support this.