Opinion

Sainsbury's bid to convince shareholders, City analysts and sceptical financial writers that it is making progress in the battle to regain the marketing high ground from Tesco was reflected on two fronts this week. The multiple sent more than a ripple across the Square Mile when it monopolised the headlines with plans to become the country's newest bank. Then, on Wednesday, the upbeat image was tempered by a much heralded 13.8% reduction in group profits before tax. Its telebanking venture is the most positive step yet in the multiple's bid to implement marketing and operational changes to substantially improve its offer. At first sight, it might seem inertia will prevent many from closing their long-standing accounts with the likes of the Midland and NatWest and carrying their cash next door to the supermarket. But with the knowledge that some give their grocery store a higher popularity rating than their avaricious local bank, the idea of saving with Sainsbury might appeal to more of its 12 million customers than some City sceptics believe. Who says, for example, that the "first account holders" among the student population will not be attracted to the financial package at their local grocery store ­ especially if the rates prove that cash, as well as food, really does cost less at Sainsbury? Meanwhile, the company's strengthened management team continues its bid to top Tesco. When Sainsbury launched its Reward card in June, the multiple predicted it would take shoppers away from its rival. Some 70% of Sainsbury sales are now through the system and, significantly, it claims seven million card customers after just four months. The Sainsbury message puts the emphasis firmly on customer service. Another development around Reward is expected shortly and the chairman claims the multiple is gaining market share. He also expects sales growth to increase. Price will always be a weapon in the high street war, but Sainsbury's task is to prove that its loyalty strategies can give it the edge when it comes to firepower.{{NEWS}}