Sainsbury’s chief executive Justin King has opened the Retail Week Conference by debunking what he says are three of the biggest myths of the current recession.
King said assertions that consumers are downtrading, that people revert to selfish behaviour and that the middle ground erodes in a recession is not what the supermarket is experiencing.
Sainsbury’s is seeing that its customers are largely sticking with the company, but changing what they buy, cooking more and transferring spend from eating out to buying things like family ready-meals, King said.
Despite the warnings of many, Sainsbury’s is not feeling the middle ground being squeezed, he added.
He said: “Being in the centre is a good place and you are uniquely positioned to work with customers as they make changes.”
He added that the£10 million Sainsbury’s has banked for Comic Relief so far this year proved that consumers were not becoming less altruistic.
King said that while his customers genuinely fear for their jobs, those that still have jobs also have household budgets that are under less pressure than they have been for a very long time.
Sainsbury’s has conducted research into how different sectors within retail have been affected by previous downturns, and food has traditionally been the most resilient.
He also demonstrated the consistent messaging - “having the “same DNA”, as he described it - in Sainsbury’s adverts over the years, and over previous downturns.
He said that Sainsbury’s focus on cooking and ingredients in its adverts is as relevant today as ever, with more people rediscovering cooking as a way to mitigate the food inflation that has been experienced.
King is keen to provide leadership to his staff and customers with a “glass half-full attitude”.
He said that even if 1 million consumers lose their jobs this year, as economists predict, that will still leave 97 per cent of the workforce in employment, and Sainsbury’s must continue to serve them.
At the same time, he believes that everything Sainsbury’s is doing, with its focus on value, switching to own-label and more home cooking, will be even more relevant to those who are unfortunate enough to lose their jobs this year.