Sainsbury's enjoys online sales boom

Supermarket chain Sainsbury's has seen sales from its Web site increase by 35 percent over the past year and 500 percent over the past three years, which means the company is on track to break even in 2004.

After a disastrous introduction to online shopping, Sainsbury's online sales operation, called Sainsbury's To You, has been slowly catching up with rival Tesco. According to the Financial Times, the company is hoping to continue its relative success with a series of television commercials starring celebrity chef Jamie Oliver's mother.

Compared with its previous financial statement in March, Sainsbury's has reduced losses from its online operation from £50m to just £10m and marginally increased its coverage from 71 percent of the UK population to 74 percent.

In April this year, Sainsbury's announced it was attempting to reduce the cost of its IT expenditure by 50 percent through a massive outsourcing agreement led by management consulting group Accenture. As part of the deal, BT was selected to roll out the largest MPLS-based network in the UK over 400 of Sainsbury's sites.

However, non-Web-based sales have been disappointing for Sainsbury's, with sales increasing by less than 2 percent over the year, resulting in the company losing its position as the UK's second largest supermarket to Wal-Mart-owned Asda.