Sainsbury’s – What next…….

  • 21 November, 2014
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SainsburysSainsbury’s suffering the pain of a more competitive supermarket landscape last week it seems… With sales down 2.1%

The 10 years of glory days under the King’s leadership appear to have come to an end.  Mike Coupe has got his hands full as he faces the harsh reality of fierce competition – not least from Aldi and Lidl but also from Asda, Tesco’s and Morrison’s following suit with heavy discounting.

The problem is that with discounting price there are no winners. Except of course for customers who’s household bills are falling on food and fuel. When the customer offerings between these giants are a bit “me too” or undifferentiated it’s hard for them not to follow on the downward price spiral

So what should Sainsbury’s do?

Well it’s back to basics. It’s all about understanding what their customers want in terms of products and service and shopping experience and aiming to better meet their needs than the available competition.  It’s about a value proposition as an overall shopping experience and not just about price.

Consumer needs are not just practical/functional though, they are emotional in terms of how they feel about the Sainsbury’s brand, the quality of the product range, their shopping experience and the service they receive. Sainsbury’s want to hold firm on its product range and perhaps choice is a part of what customers want…if not this could be a costly mistake as other player carry a more narrow range to maintain efficiencies of scale.

Coupe is resigned to a tough ride and anticipates further pressure on price but less so than some of the other big boys. The jury is out as to whether his strategy on improving quality and convenience in stores to make the Sainsbury’s customer experience closer to what they want is enough to hold firm on prices …or at least firmer than the rest

 

David Allmond

 

David Allmond

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