If Sainsbury’s were a celebrity chef, it would probably be Delia -
reliable, respected, and fairly unexciting. But with marketing director
Sara Weller’s latest signing - the ubiquitous prince of ’pukka’ Jamie
Oliver - the supermarket is gamely trying to turn its offering into
something far more mouth-watering.
Oliver was rolled out again this week (wouldn’t we love to know how much
he’s getting) to open the store’s new ’luxury’ Cromwell Road site.
It may only be one store, but there is a lot riding on it. A tie-up with
Starbucks, a ’caviar cabinet’ full of high-end luxury food, and a wine
merchant - Sir Peter Davis’ new team has clearly been hard at work, and
on paper it looks like a good blueprint for the future.
In recent months, the chain has unveiled two new initiatives aimed at
proving it is keeping ahead of customer demand. Its new car-buying
service will capitalise on the publicity over UK car prices. And a deal
with fashion designer Jeff Banks will see it try to emulate rival Asda’s
George range of clothing.
But it’s in the food aisles where the crucial work needs to be done.
Having spent at least three years in the doldrums, Sainsbury’s needs the
boost that a well-received new store can bring.
The City also needs convincing that the company is finally moving in the
right direction, after at least one false dawn under the previous
Picking Cromwell Road for the first major re-fit under the new regime is
no accident - on one of the major routes into London, the store could
act as its own giant ad. It is also just a short hop from Tesco’s
gleaming flagship by the Hammersmith flyover.
So is cheeky chappie Jamie a better choice than John Cleese, Sainsbury’s
previous brand spokesman?
And what does the chain need to pack its stores with to overtake Tesco
as the UK’s number one supermarket?
We asked Mike Godliman, marketing director of Verdict Research, and
Gillian Wilson, account director on Iceland at HHCL & Partners, to tell
us whether Sainsbury’s is on course for big things or if its path will
be as wobbly as a supermarket trolley.
Market share December December December
1997 1998 1999
Tesco 14.8 15.2 15.6
Sainsbury’s 12.4 12.2 11.8
Asda 8.3 8.5 8.9
Safeway 7.6 7.6 7.4
Source: Institute of Grocery Distribution
So, Sainsbury’s is doing a makeover of its store in Cromwell Road. That
says it all. Sainsbury’s, once an important pillar of middle England is
now just another superstore, setting out its stall, playing catch-up to
its slicker, fitter rival just down the road. But Sainsbury’s needs more
than just a little window dressing to pull it back to its once mighty
heights. Success has bred a Great British trait in this once great
British institution - rank arrogance - and a feeling that maybe it’s not
trying so hard anymore.
In the 90s it neglected its customers, with confusing price polices and
not-so-fresh produce. The aftermath is a customer base that feels let
down, almost betrayed. Sainsbury’s needs material action to win back its
customers, not platitudes; taking positions rather than just
As a punter, I’d rather be given confidence in the actual safety of
what’s on my plate than a snappy slogan. If it did this, at least I’d
feel it cared.
It’s a long word and a difficult one to say, but it’s about time you
said it to us, Sainsbury’s - it’s about time you said sorry.
It seems that Sainsbury’s has finally moved back onto the front foot and
started believing in itself again.
Sainsbury’s lost its position as market leader to Tesco in the early-90s
and struggled to come to terms with being number two. But the latest
initiatives launched by Sir Peter Davis suggest he is re-energising the
The new marketing campaign is working and the focus on quality is right
for Sainsbury’s. Our research shows that 33% of its customers cite
quality as the main reason they shop there, compared with 15% for Tesco
customers and 17% for Asda customers. In any retail market today, you
either have to offer quality or value (or both). You cannot survive
being a middle-market retailer trying to be all things to all
In the short-term, Sainsbury’s can recover some of its lost ground and
regain its reputation as a quality retailer. In the longer-term, the
picture is not so rosy. The food market is saturated and prices are
falling. While Asda and Tesco can recover the falling margins on food
with higher margins on non-food, Sainsbury’s has not had a commitment to
nor expertise in non-food. Until it can rectify this, it will be
Watson’s wish list
- Don’t let Oliver become yet another middle class ingredients
- Don’t depend on Oliver - develop other, surprising characters that
break the Sainsbury’s mould.
- Develop an initiative the other superstores haven’t thought of
- Go on, spend some money campaigning for food safety.
- Develop a non-food offering so that it can compete on a more even
founding with rivals such as Tesco and Asda.
- Get the balance right between quality and value. Even consumers
seeking quality food want to feel they are getting good value.
- Maintain the new-found self-belief.