When we were plunged into austerity, Sainsbury’s should have suffered most. Yet the grocer is evidence that value is more than just about price.
There is always a flurry of interest when the monthly grocery market share data is published by my good-looking colleagues at Worldpanel towers.
Published more frequently than the quarterly trading updates from the supermarkets – and infinitely more informative than the radio silence from our German friends – the data provides a useful snapshot of performance in the market.
This morning’s publication had ostensibly bad news for Tesco, Asda, Morrisons and Iceland, with more positive festive tidings for the Co-op, Waitrose, Sainsbury’s and the limited assortment supermarkets Aldi and Lidl (I really can’t call them discounters any longer).
“Sainsbury’s is one of food retail’s best pieces of evidence that value is about so much more than price”
Bryan Roberts, Kantar
For the underperformers, Tesco is up against strong comparatives from last year, Asda perhaps seems more concerned with profitability than buying market share, Morrisons has just lost 120 c-stores and Iceland might be somewhat vexed given its highly impressive pre-Christmas marketing and merchandising. But they are all continuing to lose trade to the discounters to a greater or lesser extent.
It’s great to see the Co-op back on its feet, with refurbished stores and a sharper proposition finally enabling it to capitalise on its advantageous locations. Waitrose continues to fire on all cylinders, while Aldi and Lidl’s disruptive overachievement has been very well documented elsewhere.
Consistency and clarity
Of the big four, it is Sainsbury’s that sits top of the pile again. On paper, when the world was engulfed by financial meltdown and we were plunged into the depths of austerity, it should have been Sainsbury’s that suffered the most.
Yet it hasn’t – it has continued to flourish, buoyed by tremendous consistency and clarity around quality, price, service and availability. Sainsbury’s is one of food retail’s best pieces of evidence that value is about so much more than price.
It is by no stretch of the imagination the cheapest retailer around, but it is consistently among the best. I can count on the fingers of one hand the times I’ve encountered a horror show in a Sainsbury’s store during the past five years (including the memorable visit to the Hayes store that featured a rather unfortunate plumbing malfunction on the mezzanine making itself evident a floor below) – a very favourable tally compared with certain other supermarkets.
“The market won’t be getting any easier, but Sainsbury’s has got itself in good shape to handle whatever the market, or us pesky shoppers, might throw at it”
Bryan Roberts, Kantar
The transition from the King era to the Coupe dynasty has been pleasingly smooth and recent innovations, such as the new store formats being trialled in Alperton and Holborn, show that the business is becoming more willing to push the envelope a little in order to lay the foundations for ongoing outperformance in the future.
At the same time, there is a healthy dose of realism around the business – including the admission that it is saddled with too much space – and clear mindfulness that the balance sheet needs to be looked after, too.
With decent growth in convenience and online combined with what appears to be a credible and scalable vision of the future for larger stores, Sainsbury’s looks set up to enjoy a bumper Yuletide and decent start to 2016.
The market won’t be getting any easier, but Sainsbury’s has got itself in good shape to handle whatever the market, or us pesky shoppers, might throw at it.
- Bryan Roberts is senior vice-president and knowledge officer EMEA, Kantar Retail