IT and Payroll Functions

Sainsbury(J) PLC
22 August 2000


Sainsbury's To Outsource IT and Payroll Functions

J Sainsbury plc announced to its staff today that it is planning to outsource
its supermarket IT functions to Andersen Consulting.  The two companies are
currently finalising details of the arrangement which are subject to final
negotiation and approval by the Boards of both companies at the end of
September 2000.  

The contract will encompass the designing, building, implementing and running
of all IT systems and networks for Sainsbury's Supermarkets. Circa 800
employees will transfer to Andersen Consulting which will also take over
responsibility for, or manage, all Sainsbury's Supermarket's current IT
contracts with third party suppliers.  Further details of the agreement will
be made available following final approval of the contract by the Sainsbury's
Board. 

Sir Peter Davis, Sainsbury's group chief executive commented 'I said at our
preliminary results announcement in May that we needed to improve our business
efficiency radically and with speed. The age and complexity of our current IT
systems are hampering our ability to perform and develop and our required rate
of change is made even more crucial with our ambitions for e-commerce.  

'We currently spend in excess of £200 million a year on our supermarket IT
systems and operations.  It is essential that we get better value for money
and through Andersen Consulting we have identified a customer-centric platform
which gets us where we need to be and fast.  It will drive a step-change in
our IT capabilities and help us deliver competitive advantage to our customers
and cost savings to our shareholders.'

John Adshead, Sainsbury's group board director for IT added 'Sainsbury's has
some excellent IT talent and expertise but our current systems have evolved
over many years and are costly and complex to run.  This move will create a
fundamentally more effective partnership between IT and our business and give
colleagues the opportunity to work with state-of-the-art technology in a
company which has IT as its core competence.'

Bob Willett, global managing partner retail, Andersen Consulting, said 'Our
goal is to enable Sainsbury's to achieve a quantum leap in IT capability to
support its business strategies.  As the Sainsbury's board concentrates on
rebuilding the strength of the brand, Andersen Consulting will ensure it has
the necessary systems and processes in place.'

In a similar move, Sainsbury's is also completing discussions with Rebus Human
Resource to outsource its current payroll operation for Sainsbury's
Supermarkets, Group departments and its pensioners. Circa 45 employees will
transfer to the specialist payroll provider later in the year. 


Enquiries 

Investor Relations:
Roger Matthews    020 7695 6025

Press Enquiries:

Pip Wood          020 7695 7295

David Martin - Andersen Consulting 020 7844 5197