Auctioning off a 25lb pork pie could only have happened at a Marks & Spencer AGM, and it could only have been fronted by the showman himself Sir Stuart Rose.
But games and shareholder revolts aside, one of the key messages that Rose sought to highlight at last week’s AGM was Marks & Spencer’s improvement in food sales.
The first-quarter trading results earlier this month showed the third consecutive quarterly improvement in food, and last week Rose drummed the message home.
Rival Waitrose also seems to be on top form, especially with the early success of its Essential value line – already accounting for 14 per cent of sales.
This strength in Marks & Spencer and Waitrose poses a threat to Sainsbury’s. Next week, TNS Worldpanel releases its grocery data and if the premium players continue to improve, Sainsbury’s could start to show weakness.
Sainsbury’s has undoubtedly profited the most from the previous weakness of Marks & Spencer and Waitrose. It scooped up those shoppers who needed to trade down and is working hard to keep them. Once consumer confidence improves – and Rose believes it is starting to stabilise – can Sainsbury’s hang on to these shoppers?
At the other end of the scale, last month’s TNS figures pointed to slowing growth at the hard discounters Aldi and Lidl. Shoppers are reverting to pre-recession behaviour and the big four grocers are outpacing the German stars. This slowdown in growth at the discounters will be welcome news to the big four. While Sainsbury’s, Asda and Morrisons played down any fallout from the discounters’ rise, Tesco waged all out war.
Come September, Tesco is likely to see an improvement in its performance when it reaches the anniversary of the launch of its discount brands range and, if TNS continues to point to a slowdown in Aldi and Lidl’s performance, Tesco could claim victory.
Many thought Sainsbury’s would suffer in the recession, but nobody thought Tesco would. Could the tables now be turning?
- Jennifer Creevy is news editor of Retail Week