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Wednesday, 18 October, 2000, 14:10 GMT 15:10 UK
Sainsbury's to offer mobile phone service
A Sainsbury's supermarket in London
Pre-pay mobile customers could get reward card credits
The UK's second biggest supermarket operator J Sainsbury on Wednesday said it would launch a mobile phone service offering customers the lowest rates in the country.

The service - called Sainsbury'sOne - will use a specially developed billing system which checks customers' calls against standard tariffs offered by the UK's four mobile networks and charges them the lowest price available.

It will be operated in partnership with BT Cellnet and marketing firm Mosaic Group and be available to Sainsbury's Reward Card holders from January 2001.

"This is the biggest shake-up the UK's mobile phone market has ever seen," marketing director Sara Weller said.

Reward card refunds

"Sainsbury'sOne will put an end to customers having to plough through huge amounts of information on the many different tariffs available and will guarantee the best deals in the UK."

Pre-pay customers will be able to buy Sainsbury'sOne vouchers from Sainsbury's stores and will receive quarterly statements showing how much they would have paid for their calls if they had used pre-paid services offered by each of the four UK networks.

"If any of the competitor services would have charged a lower rate, customers will be refunded the difference to their Reward Card account," Sainsbury's said.

The announcement came as Sainsbury's issued a progress report in which it said current sales and profits were in line with expectations.

Cost efficiencies

"We are quite clear about the scale of change needed in our core supermarkets business," said group chief executive Sir Peter Davis.

He said a three-year reform programme aimed to deliver "cost efficiencies" of 600m a year and help Sainsbury's "achieve margins that will compare with the best in the industry".

Capital spending will be lifted by 150m-200m a year for each of the next three years, group finance director Roger Matthews said.

He said the company's review of its Homebase do-it-yourself business was "likely to take a few more weeks to complete".

In August, Sainsbury's had said it was considering several options for the chain including a sale and an alliance.

Analysts valued Homebase at about 1bn.

The group is due to publish first-half results on 22 November.

Sainsbury's shares responded positively to the progress report, climbing 6.72% to a year's high of 377 pence by 1353 GMT.

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