Sainsbury’s has been growing its market share, from 14.9% a year ago to 15.3% in Kantar’s July data. And it has been outgrowing the market for some time too.
So, how is it doing this and what can we learn? Here are five points.
First, it has tried to minimise price as a barrier to shopping. Aldi Price Match is heavily communicated and highly visible in store, particularly in key categories like produce and meat. Then there’s the Nectar Prices scheme. Tesco first introduced the concept with Clubcard Prices, but maybe that made it easier for shoppers to adopt the Sainsbury’s version. Certainly it has had a big impact, with good discounts – especially initially – and very bold displays. Use of the scheme has grown, and customers feel they are getting something extra.
Second, among shoppers who can afford it, Sainsbury’s is looking to drive trade-up. Happily for the retailer, its shopper base is slightly more affluent, which makes it easier to sell that premium. Taste the Difference is growing fast. There is interesting innovation, such as the meal kits with SimplyCook and Kitchen Deli food to go. Space and support is given to brands like BrewDog and Lindt, which can attract high item prices.
Third, it is refocusing on the shopper experience. Sainsbury’s has reported a rise in customer satisfaction amid its focus on store standards. Stores were looking very tired, as costs and counters were taken out, and Covid did not help. It was imperative to act, especially as M&S changed the game with its new stores and refurbs. Progress is being made in store standards and there are plans to invest in many stores across the estate.
Fourth, it is looking for win-win relationships with suppliers. You will see increasingly bold in-store activation – more so than in most competitors. This week I saw eye-catching displays for Cadbury, Haribo and Danone’s GetPro brand. Brands have to pay for this, of course, but they get big volume uplifts. Arguably the colour and drama of these activations can make the store visit more interesting for shoppers. If so, it’s a win all round. Similarly, suppliers are effectively contributing to refurbs in return for brand presence – for instance, by paying for presence on aisle-end screens.
Finally, there is something to learn about culture and mindset. Sainsbury’s seems increasingly up for giving things a try, for testing and learning. Market share is not the only measure that matters, but share gains must build confidence, which leads to more ideas, and a sense of momentum. As stores get better, busier and livelier, so suppliers, staff and customers want to be more involved.
The competition remains fierce. Share gains may be harder to achieve as Sainsbury’s laps the launch of Nectar Prices. But there are good things to learn from.
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