Neil Sachdev loves bees. So much so, he has set up “hotels” for them on the roofs of numerous Sainsbury’s stores across the country. But, this is not for the honey. The property director, who was appointed to his role in July last year, is passionate about the environment, and the bee hotels (see panel, p61) are part of the company’s £80m pa sustainability drive, which has seen carbon emissions from its stores drop by 30% since 2006.
Sachdev’s sensitive side is clearly on show with the bees, but his reputation in the industry is quite different. He is known as an ambitious man who drove his team hard at his former company Tesco, where he worked for 28 years before leaving to join Sainsbury’s in 2006 as commercial director.
“People thought he was harder than a brick,” says one former colleague.
Sachdev is slightly taken aback by this suggestion. “I’m not sure I would have put it that way,” he says. “Yes, I am incredibly focused on where I am going. Like everyone else, I don’t like failing. We set a direction and we head for it.
Short period of time
“I have been here for nearly five years now. When you think of what has been achieved in a very short period of time, it’s taken my breath away. This is partly because the team here are incredibly well focused, and I hope that what I have been able to do is to instil my ambition in them.”
Certainly, the square footage Sachdev and his team of around 200, have opened in recent years is impressive – from building around 275,000 sq ft in 2006-07 to 1.6m sq ft last year and 1.4m sq ft this year. And this week Sainsbury’s is opening its 1,000th store in Irvine, Scotland.
Sachdev partly attributes this success to the amalgamation of Sainsbury’s store development team with the property team in July last year. “We have been able to align our goals better, and we are all focused on trying to do the same thing,” he says.
Despite recession fears, the retailer has pledged to continue to grow its 19.6m sq ft gross space by 7-8% in 2011-12. In future years, it plans to add 1.25m sq ft of space. In the two years to March 2011, Sainsbury’s gross space grew by 15.9%, beating the target it set in March 2009.
Sachdev adds: “Unlike many other food retailers, we still think that we have a big opportunity in the UK that we have yet to fully tap in to.” Wales and Scotland are of particular interest.
Such plans, however, always have to overcome the UK’s much maligned planning system. With the government’s proposed overhaul of the planning system through the National Planning Policy Framework, Sachdev is hopeful that development will be made easier. “We are delighted that government is trying to simplify the way planning works. We will always welcome that because we want to get things to market as quickly as possible.
“We are going to build on all the land we have in our pipeline. It is just a matter of how fast we can get planning permission on it,” he says.
Sachdev rejects any suggestions that supermarkets are building up their land banks in order to compete with each other rather than to buy stores. “I don’t buy the principal of land banking happening. All the retailers are buying land to put stores on them,” he says. “I don’t think there is even an acre that we have bought that we don’t have an intention of putting a store on.”
However, the government has yet to decide on whether to accept the Competition Competition’s recommendation to introduce an “impact test” to take into consideration consumer choice when allowing supermarkets to build stores. This means the chain may face more hurdles to expansion in the future.
Meanwhile, Sachdev is putting a strong focus on growing Sainsbury’s Locals on the high street. The company has 428 convenience stores, with plans to open one or two every week in the future.
One way to achieve instant growth is to take over existing shops. In April, reports said Sainsbury’s was “eyeing up” some, if not all, of Iceland’s 750 stores. Nothing happened, but Iceland is still on the map as far as Sainsbury’s is concerned. “If they do become available and there are stores for sale, then we would certainly be interested in them. Store numbers would be 30s or 40s, certainly, not in the hundreds,” says Sachdev.
Another possibility is to acquire sites from Sir Philip Green’s Arcadia Group. Following a 38% fall in profit, Green announced last week that 250 stores would be off-loaded in the next three years. Sachdev says the level of interest would be dependent on where the Arcadia stores are.
“We have a big need to open a lot of Local stores in the high street, and a lot of Arcadia’s are on the high street. If there happens to be access space, if Arcadia contacted us we would be delighted to look at them,” he says.
Even opening in more shopping centres has not been ruled out. “If an opportunity arises for us to have a supermarket in a shopping centre, then most certainly we are interested. But, would I buy a shopping centre in order to anchor it? It depends on what the returns are. Clearly, if there was an opportunity that would give our shareholders decent returns then it would be worth looking at”, says Sachdev, who is also on the board of Capital Shopping Centres.
International expansion to China and now India is also on the cards, since the latter’s government announced last week that it was relaxing its boundary limits to foreign retailers.
“We have had a team in China for a while. It is a very interesting market and if we find the right opportunity there, China might be the first one we will enter into [internationally]. It would have to be the right time, the right region, and be within our ability to operate it,” says Sachdev.
And the growth is not all about food. Bolstering the non-food side is key to the supermarket’s strategy. “It’s one of the big areas that we will continue growing,” says Sachdev. “About 40% of the space we have done each year is non-food, but we still have a very tiny percentage of the market share, and we know that there is an enormous opportunity for us to grow in that area.”
He points out the huge potential of pharmacies. “This has been the fact for the past five years, and we have the largest amount of pharmacies in stores ahead of any others. But, I wouldn’t have thought there would be a case to make them standalone. But, you never say never in this business.”
Compared to nearest rival Tesco, which has 5,380 stores around the world, Sainsbury’s with just 1,000 is lagging far behind. Size did not matter when, in the second quarter this year, Sainsbury’s overtook Tesco to have the UK’s top sales growth. However, the race to be number one in either store size or sales growth is not important, stresses Sachdev.
“It’s not about being number one or two any more. It’s about being focused on doing a great job, and the customers will always reward you if you think about them first,” he says.
“Sales will always come if you do that. The status symbol of being number one is not in our minds.”
“We are focused on where we are going. I am more interested in looking after my customers rather than worrying about what others are doing.”
And with that, the very busy Sachdev goes back to his other passion – the environment, and the humble bee.
Neil Sachdev: Checking out green initiatives
Born in Uganda in 1958, Sachdev qualified with an MBA at Stirling University. He worked for Tesco for 28 years before joining Sainsbury’s as commercial director in 2007.
Appointed property director in July 2010, Sachdev is also responsible for Sainsbury’s environmental strategy.
Sachdev is a non-executive director and member of the audit and remuneration committee of Capital Shopping Centres. He is chairman of the IGD board and director of the board of IGD Services.
Since 2008, he has been a member of the Business in the Community Mayday Leadership team, focusing on the climate change sector. He was appointed to the joint advisory board of the Grantham Institute for Climate Change in 2010.
To Bee or not to bee?
In 2006, Sainsbury’s partnered with Syngenta in Operation Bumblebee with the aim of establishing bumblebee habitats on the land of over 90% of its UK suppliers to up the dwindling population of pollenating bees. Followingthe success of this model, Sainsbury’s worked with a specialist, Robin Dean, to establish 38 “bee hotels” on its stores, increasing the availability of nesting sites.
