Sainsbury’s boss Justin King said the retailer’s quality outstrips that of the discounters this week, but he is not taking them seriously enough.

Sainsbury’s boss Justin King said the retailer’s quality outstrips that of the discounters this week, but his comments do not take them seriously enough.

Sainsbury’s trading statement on Wednesday revealed the retailer had enjoyed its 36th consecutive quarter of sales growth – an impressive feat given the economic climate and the competitive marketplace.

One point was especially striking. When discussing the results, Justin King was frequently asked about the threat posed by discount retailers. His answers were telling, and illustrate that while the big four take discounters seriously, they do not acknowledge the full extent of the threat.

King pointed out that discounters have recently been focussing on quality, but argued “we know from our customer research that they believe our quality beats not just our grocery competitors, but our convenience competitors and discounter competitors.”

Sainsbury’s Taste the Difference range is undoubtedly excellent and popular, but King is being disingenuous. To take the festive period alone, Aldi’s Christmas pudding won first and second prize in a Good Housekeeping taste test, and its mince pies came first in a Which? trial. In both cases, Lidl was close behind – and Taste the Difference was trounced.

In a recent survey my firm commissioned with OnePoll, a staggering 58% of consumers said that “discounters’ own brands match other brands for quality”. 47% said they chose to buy discounters’ own label products over other available brands. It’s far from clear, in other words, that Taste the Difference enjoys the quality advantage that Mr King suggests.

What wasn’t mentioned was how discounters are opening up other fronts in the battle. One of the most striking is service – many companies are beginning to take the first steps towards creating an in-store experience that can compete with the large multiples.

B&M have begun to offer a bagging service; Family Bargains has invested in its parking facilities. Meanwhile discounters across the board have improved their merchandise availability.

Furthermore, as King acknowledged, consumers’ habits are changing, with many “shopping around” rather than buying all groceries in a single supermarket trip. This trend benefits Sainsbury’s and Tesco’s convenience arms – but it also plays into the hands of discounters, especially independent discount retailers and non-supermarket chains, which are growing on every high street.

Sainsbury’s results are impressive – but discount retailers have parked more tanks on Justin King’s lawn than he cares to admit.

James Russell is commercial director for discount wholesaler Rowan