What we can learn from Sainsbury's
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Sainsbury’s holds second place in Kantar’s measure of UK value share, something they didn’t always achieve in Asda’s glory days.  After the failed attempt to merge with Asda, there were questions asked about Sainsbury’s long-term prospects but this talk has quietened.  Strong sales through lockdown have helped, even if market share has drifted marginally at times.

So how are Sainsbury’s continuing to compete effectively, and what can we learn?

Sainsbury’s are talking publicly about “Food First”.  This is reflected in some parts of their stores. They have clearly bet on healthy eating as a major focus.  Areas such as gut health, dairy and gluten free, meat alternatives and nutritional supplements are well invested, with authoritative ranges and effective in-store marketing.  And there are other islands of excellence – fresh pasta, the self-serve patisserie counter, a renewed Slow Cook range, and an effort to liven up Steak.  But overall, in the categories that still say the most about quality to shoppers (Produce, Meat, Fish & Poultry and Bakery), Sainsbury’s can’t currently claim to be outstanding.  These are decent departments, but not show-stoppers. 

Sainsbury’s has made great strides on value over the last fifteen years but the current communication in store underplays this.  The seasonal aisle in early March is focussed on Price Lock but what Price Lock means will not be 100% clear to many shoppers.  Most gondolas on the value aisle feature many different products, but not a “knockout” value message.  Although Aldi price match is visible, it is less prominent than at Tesco down the road.  The overall value messaging is not that persuasive.

Where Sainsbury’s have noticeably stepped up in recent years is in non-food.  The Argos transaction has been a success.  It hugely improves Sainsbury’s range and credibility in non-food, is an extra reason to visit the store, and the company report significant benefits for store sales.  Tu clothing is well presented, with good visual merchandising and mannequins.  Perhaps most impressive is the Habitat brand.  In the Burpham store I visited, there are excellent displays which look like best-in-class in UK supermarkets (towels, home fragrance).  Sainsbury’s now has credibility and design credentials that they lacked a decade ago. 

So this is the biggest learning from Sainsbury’s.  They took bold decisions to address their key area of weakness (non-food) and in doing so with confidence, they greatly strengthened the proposition.  If they can deliver real differentiation through Food First, we may see their market share climbing again. 

Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies.  He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.