Sainsburys sales

Sainsbury’s – time to be bolder

Sainsburys has had a fair ride through the first half of its financial year but the biggest grocery quarter has only just started and the stakes are high. Reporting bland first half interims today we are looking forward to the next quarter to see what direction Sainsburys will take.

We are in part excited, and in part questioning of the logic behind the new format trial. Focusing on the customer shopping mission is a good position to take for larger format stores, but the resulting changes to adjacencies were, well, weird.

Sainsburys has been bold in some ways, the Netto tie up and the format trials compared to the rather staid approach to marketing. Here they need to be bolder and differentiate themselves whilst driving that all important footfall. The Sainsburys Christmas advert is launched later this week but will it be another epic, or will it be lighter and shorter, recognising the shortened attention span of the customer despite liking a good story?

We optimistically thought we might here an update on Netto performance, how Sainsburys can position itself against the discounters, but we will have longer to wait to see if Netto can compete against Lidl and Aldi. Christmas will be a telling period to assess performance and if it is good news, will be a great story for January.

One constant enigma for us is that Sainsburys do not make more of Tu Clothing. They have a real capacity for sales and profit growth, but this is just left on the table due to continuing poor instore execution.

Sainsburys hasn’t yet responded to the Tesco Brand Guarantee yet. We suspect that when a response comes it will be brand values led, sourcing and provenance at the core given the continued success of its own brands.

Is Sainsbury successful because they are doing the right thing or because Tesco aren’t? In our opinion it is more of their own good judgement and on firm foundations sales and margin can continue to build through its third quarter. However when so much of Christmas performance dependent on advertising, store operations and availability, the results are still subject to change.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.