The modest decline in like for like sales for Sainsburys for its second quarter trading is the seventh in a row where the grocer has felt the pressure from competition.
Pricing is the biggest issue that Sainsburys face, competing against Tesco and Morrison, and each in turn struggling against the discounters. Sainsburys response has been to keep pace on key lines but little more and that is starting to take its toll. Tactical pricing activity keeps existing customers coming back, particularly to its stronger convenience arm, but is not exciting or differentiating enough to attract new customers.
The Sainsburys customer is one of the most loyal and trusts Sainsburys for its quality, so steering a steady path may feel right given it has served well in the past and helped to hold market share but it could be so much better.
We are eager to hear about a new marketing campaign, or an innovative personalised digital campaign, but we are left feeling disappointed. When there is so much competition on price, the obvious thing for a retailer to do is draw attention away from the price of essentials and focus on a unique aspect of the proposition which in Sainsburys case could easily be the quality and provenance of its food.
The “Value for Values” campaign should have delivered this but to date it feels very half-hearted. The latest Little Twists campaign feels just as half-hearted in comparison to Lidl Surprises or the Asda pocket tapping advertising. It just isn’t memorable.
In the lead up to Christmas, we should expect to see a new headline grabbing advert, hopefully for the right reasons and a little less controversial than last year’s WW1 epic. The TU brand could be so much more and an advertising effort in that direction could also be well received especially with more effort put into in store execution.
Sainsbury’s Local convenience stores and a consistently well executed online offer are why it is holding ground against the Big 4. It cannot however be complacent in these channels with added competition is on its way from Aldi and Amazon as they both announce online plans this week.
Now is the time to stretch the creative juices in Sainsburys Head Office and challenge the ordinary. There is an opportunity to stand apart from the other major supermarkets and establish a niche if it can be bold enough.
Once famed for its “try something new” campaign, what is new now? Adding a teaspoon of instant coffee to a Bolognese sauce just isn’t enough.
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