Sainsbury’s, Playing the Longer Game.

John Ibbotson

John Ibbotson / 11th January 2017

Sainsbury’s Christmas figures are out, and they are not bad, not amazing, but not bad but then Sainsbury’s are in it for the long haul not the quick fix to bring in customers and their money. Here are my thoughts on their festive trading figures:

“Not even jealousy at the strong results posted by its rival Morrisons will take the shine off Sainsbury’s surprisingly decent Christmas performance.

“After a mostly miserable 2016, the struggling brand’s sighs of relief are audible.

sainsburys

“But talk of a turnaround is a touch premature. Like-for-like sales barely crept up and like-for-like volumes haven’t budged.

“So far, it’s a case of Sainsbury’s steadying the ship rather than plain sailing.

“A year ago Sainsbury’s was congratulating itself for retaining its middle-class client base while the German discounters decimated their rivals at Tesco and Morrisons.

“Now Tesco and Morrisons have staunched their losses and are fighting back with aggressive price cuts and some fundamental reforms to their structure.

“By contrast the Sainsbury’s response – the abolition of multi-buy promotions and the introduction of simpler pricing – looks rather underwhelming in the current brutal market conditions.

“Its clothing ranges performed well – with sales up 10% in the last quarter – but Sainsbury’s core grocery business still has a long way to go to catch up. On the plus side, record online sales and strong performance by its convenience stores show that Sainsbury’s is successfully making multi-channel work for it.

“The integration of Argos has proved a distraction, but Argos’s solid performance in the toy price war with Tesco could yet prove decisive. Argos will be key to the long-term success of Sainsbury’s multi-channel strategy, so this is an encouraging start.

“Sainsbury’s is playing a slightly longer game than some of its competitors but future-proofing itself in this way could pay dividends down the line.

“It is by no means out of the woods yet, but having a plan that’s different to its competitors and sticking to it can count for a lot in the current environment.”


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