The squeeze on grocers was underlined by Sainsbury’s this morning. Retail Week takes a look at what the analysts are saying.
While we wouldn’t necessarily rush to join those identifying the dip in Sainsbury’s sales as a turning or inflection point, it would seem prudent to suggest that Sainsbury’s incredible run of form has well and truly come to an end.
Mike Coupe faces an uphill struggle in reversing the declining trend in like-for-likes. With Tesco desperately seeking recovery and the Co-op poised to raise its game, Sainsbury’s could face further pressure… If Sainsbury’s has any decent strategic aces up its sleeve, now might be the time to play them – Bryan Roberts, Kantar Retail
Through more rationalised pricing commitments on shopping basket staples and via its brand match, we firmly believe that Sainsbury’s will emerge stronger as market spend picks up.
Staying true to its values, evidenced by development of its upper-tier Taste the Difference and mid-level by Sainsbury’s own-labels, matched by some best-in-class service standards, Sainsbury’s will retain its distinctive identity as its rivals converge around a narrower concept of value, built around sales volumes rather than values – George Scott, Conlumino
Last Wednesday, for Tesco, was black. This one, for Sainsbury’s, more grey. Sainsbury’s has a strategy to cope with the structural changes within retail, the shift to selling clothes online being the latest example. It’s this clear strategy that Tesco seems to lack – John Ibbotson, Retail Vision
Sainsbury’s differentiated quality-food-for-the-masses offer resonates with consumers and provides margin protection. Tesco’s and Morrisons’ withdrawal towards value retailing further enhances its quality credentials –Bruno Monteyne, Bernstein Research
Mike Coupe has to contend with demonstrably weaker markets for major British supermarkets, reflecting changes to consumer behaviour, new competitor dynamics, increasing food eaten out of the home and channel shift.
New space is not going to be the source of oxygen for the top-line that it once was for Sainsbury’s, and with easier inflation and perhaps some gross margin pressure, then it maybe that operating channels receive greater attention as sector costs increasingly appear to have to be cut – Darren Shirley, Shore Capital