Sainsbury’s boss Mike Coupe and finance director John Rogers discuss the issues facing the grocery sector today after revealing a 2.8% fall in Q2 like-for-likes.

Sainsbury’s boss Mike Coupe and FD John Rogers on…

Brand Match, and the repositioning to only compare with Asda, not Tesco:

Coupe: “We set out to make improvements to Brand Match and the overwhelming response that we got from customers is that they perceive Asda to be the cheapest grocer. It was never a cost saving measure [to take Tesco out of the comparison tool]. The new campaign clarifies the communication, and also our prices have never been stronger so are cheaper than Tesco on many products.”

Whether Brand Match will move online:

Coupe: “We won’t get involved in unsustainable marketing, but we might consider putting Brand Match online in the future.”

The slowdown in online sales:

Coupe: “We have an underlying sustainable level of growth we’re really pleased with. In the market there are lots of people fighting for customer spend in a way that is not sustainable. We may be slightly behind the market in terms of growth but we want to build a sustainable business that is right for our customers.”

The market conditions:

Coupe: “These are the most challenging conditions in 30 years. Customers have never been more savvy. The trends that we have seen have accelerated in the last quarter. We’ve seen smaller basket sizes, shoppers are putting one item less in their baskets, and shopping more frequently and are more promiscuous. Whereas they may have had one or two choices of supermarket, they’ve now got four or five on their doorstep. Our convenience business and the discounters are benefiting from that market dynamic at the moment.”

On Sainsbury’s accounting in light of Tesco’s £250m profit overstatement:

Coupe: “We are 100% confident in the integrity of our accounts. Sainsbury’s brand is built on trust.”

Rogers: “We are 100% confident that we are accounting for our supplier monies in the right way. There has been a lot of talk about this type of accounting being muddy and that’s not true. It’s very objective, and there are a clearly defined set of rules and regulations. We have all the checks and balances in place.”

On Netto, and its joint venture:

Coupe: “We have the first five stores opening in the first two weeks of November and our intention is to trial 15. It won’t make a material impact over the next period of time, but what it does is give us another option to flex in whatever shifts there are in consumer behaviour. We are well invested across all channels.”

Rogers: “We’re really pleased with the look and feel of the Netto stores and are looking forward to wowing the market in November.”