Perception-shifting Brand Match is proving a hit for Sainsbury's

The nationals jumped on Sainsbury’s ‘stalling’ supermarket growth plans this week, but CEO Justin King was in no doubt the future was bright after linking its market-beating full-year results to its innovative Brand Match price-matching scheme.

It’s brave for any retailer ever to remind shoppers they would have been better off if they’d gone elsewhere - look at Tesco’s Real Baskets campaign against Asda, which spectacularly backfired. But for Sainsbury’s, its voucher-based scheme is paying off. With instantaneous results and guaranteeing to match its rivals’ prices even when the item was on promotion, Brand Match had helped Sainsbury’s close the gap on shopper perception that it is pricier than its rivals. When Brand Match launched nationally in October last year following a short trial in Northern Ireland, according to its weekly Sainsbury’s Brand Match Nectar Customer Tracking data, just over 70% of shoppers thought Sainsbury’s sold brands at the same price as other supermarkets. This figure has now increased to just over 80% in a mere six months.

“You’ve got to fight the good fight on pricing and in that regard Brand Match has been a real step up,” says King. “We’ve known, and our loyal customers have known, for a long time that our prices are truly competitive, but our challenge has always been to tell those customers that only shop with us on occasion.”

King won’t reveal how much Brand Match has cost Sainsbury’s. All he will say is that more than 50% of the coupons issued show Sainsbury’s is cheaper, and that over half the coupons it issues when it is not are less than £1. It gave out a total of 375 million coupons at tills in the past 12 months.

The low amounts dished out by Sainsbury’s on the occasions that it is dearer have also helped improve perceptions. Any higher, and shoppers might have decided they would indeed have been better off elsewhere.

“Brand Match is giving people genuine confidence in the supermarket’s prices,” believes Phil Dorrell, director of retail consultants Retail Remedy.

Shoppers also ‘get’ and trust vouchers, believes Danielle Pinnington, MD of Shoppercentric. “We’re certainly picking up a trend back in favour of the delayed response mechanisms like vouchers or coupons versus immediate returns or multibuys,” she says.

In fact, vouchers are “the most profitable investment retailers can make”, believes King. This is because, through Nectar, Sainsbury’s can track individual shopper habits and tailor vouchers to them.

“You’ve got to fight the good fight on pricing and Brand Match has been a real step up”

Justin King, CEO, Sainsbury’s

“There’s nothing worse than a voucher you can’t use like a generic £8 off an £80 shop when you only spend £50.”

Last week, Waitrose became the latest retailer to roll out a price-matching scheme, but King believes rivals have a long way to go to rival Brand Match, which checks 14,000 lines every day, including promotions.

“We really think Brand Match is head and shoulders the best price promise and is convincing our shoppers we are competitive on price.”