Sainsbury’s is well and truly on the up. Its fourth-quarter like-for-like sales, excluding petrol, were up 6.2 per cent and it is continuing to win new customers.
Chief executive Justin King – fresh from winning the coveted Retail Leader of the Year at the Oracle Retail Week Awards last week – was on fine form on Wednesday, proud that all his initiatives are paying off.
King argued that Sainsbury’s is catering better for customers than some of its rivals. Growth of its Basics line is rocketing but its ethical ranges, like Freedom Foods, are also growing strongly – showing that customers still care about where their food comes from.
Sainsbury’s is winning customers from the top end grocers and it hasn’t suffered too much from shoppers defecting to discounters such as Aldi and Lidl.
Sainsbury’s is on good form, but so are rivals Morrisons and Asda. The three grocers have all suffered a rocky few years in their recent history but in the past couple of years their new managements have tightened the ship. King – who celebrates five years at Sainsbury’s next week – has impressed the City with his turnaround; Marc Bolland at Morrisons has been key to the Northern grocer’s sales performance after the catastrophic takeover of Safeway; and Andy Bond has steered Asda forward to become one of parent company Wal-Mart’s favourite leaders.
The same can’t be said for Tesco. The grocer’s excellent record has been broken and while Sir Terry Leahy is an admirable leader, some have questioned why its form has dropped. Some believe that Tim Mason’s exit to the US may have something to do with it.
Mason has a big job on his hands at Fresh & Easy with the downturn in the US and if he makes a success of the venture, he will definitely be the golden boy. But maybe Tesco was rash in sending him off to the US.
His reputation as a retailer in touch with the consumer was paramount in the UK and that’s what Tesco needs now. Its competitors have all upped their game, are all performing on top form, and it isn’t just about taking new space anymore.
Tesco needs to be clear in its message, and make sure it stands out among the fierce competition. Perhaps Mason needs to bring the magic back.