by Phil Dorrell, Partner, Retail Remedy
PR departments are peculiar. They are there as part of the marketing team and deal with the media face of the specific retailer. They promote good press relations and brand equity and occasionally have to deal with the odd bit of negative media attention.
They also arrange media facing walk-rounds, launches and retail results announcements. Populated by hard nosed people who exude both confidence and style. Sainsbury’s today was exactly this, a walk round for retail consultants and analysts, chaperoned by the PR, a brief 7 minute section review with some of the directorate before moving on to another section. Manifesto like in it’s delivery, it told us all the things we largely knew and wondered if they would really make the difference. I enjoyed it and the store looked superb in Wandsworth, run by an old GSM of mine, Ziggy, top chap.
These media days perhaps rely on an old marketing ploy called reciprocity, they look after us, we look after them in our reviews of their business and plans. The truth is somewhat more brutal however and any journo or retail commentator who is worth their salt has to report their view, although sometimes that view is not well studied, and for these reporters the exercise provides as story. It’s just not the whole story.
Sainsbury’s face a daunting 24 months, facing more Tesco stores than anybody else they have more to lose from a resurgent market leader, and they are / will be resurging. For all the lovely people (and JS people always do themselves proud in this ) there lacked the retail strategy and tactics required for such a fight. We heard of great services, really cool products, increasing online and click and collect, even the belief in pricing simplicity. I for one didn’t get the sense they had the pricing strategy clear across all areas, nor the marketing synergy in store that extolled the simple pricing philosophy. Being so far behind Tesco and Asda in clothing and non-food sales just means they have a greater reliance on food profit, almost treated as a traffic driver by the bigger two retailers. Asda specifically have such heritage in clothing and non-food that they are willing to sacrifice much of the profit from food and drive footfall and goodwill because of it.
Sainsbury’s have some great products, super people and well placed stores, but they need a lot more people going in them instead of competitors and they need to look to their pricing and promotions on foods to do this. The simple pricing would be a good start but too conceptual to comment yet. The next 24 months for Sainsbury’s will be very tough, nothing I heard today convinces me otherwise.