>>A retailer running to stand still may yet catch up
Amid all the flak that flew Sainsbury’s way this week, it was interesting to note that none of the chain’s many critics were able to offer any sensible suggestions as to what Sir Peter Davis should do differently.
The challenge Sir Peter faced when he came into the business was enormous. Sainsbury’s retail offer needed modernising and its supply chain was in desperate need of an overhaul. He warned it would all take time and money to sort out.
But I guess time is a precious commodity in grocery retailing. As Sainsbury has strived to re-engineer its entire business, so its main rivals have continued to steam ahead. Meanwhile, the market has rapidly polarised between those retailers focused on an upmarket offer and those promoting their low price credentials. More worrying, it is the latter who are setting the agenda for food retailers serving the mass market.
All of which means Sainsbury has ended up looking like a company that is having to run hard simply to stand still. But Sir Peter clearly believes he has hit upon a strategy that will restore Sainsbury’s fortunes, particularly over the next 12 months as it starts reaping the rewards of initiatives such as its supply chain work and non food programme. We’ll know in a year’s time whether Sir Peter, or his critics, were right.
Whenever I talk to retailers about the margin pressure facing their suppliers, they often rightly point to financial figures that demonstrate the exact opposite.
Well, as you will see on page 37, our annual OC&C Index shows that food and drink suppliers may not have been crying wolf after all.
Somewhat inevitably, it is the smaller suppliers who are facing the most pressure. As our feature puts it: “Scale is a definite plus in a world where retailers continue to consolidate and increase their buying power.”
There are plenty of premier league suppliers who already have the scale, and the quality, necessary to build sales and profit. But even they are finding it tough to grow in the current trading climate.
And that means life is going to get even harder for those suppliers in the lower divisions of grocery.
Sainsbury: time will tell
Not Crying wolf
Amid all the flak that flew Sainsbury’s way this week, it was interesting to note that none of the chain’s many critics were able to offer any sensible suggestions as to what Sir Peter Davis should do differently.
The challenge Sir Peter faced when he came into the business was enormous. Sainsbury’s retail offer needed modernising and its supply chain was in desperate need of an overhaul. He warned it would all take time and money to sort out.
But I guess time is a precious commodity in grocery retailing. As Sainsbury has strived to re-engineer its entire business, so its main rivals have continued to steam ahead. Meanwhile, the market has rapidly polarised between those retailers focused on an upmarket offer and those promoting their low price credentials. More worrying, it is the latter who are setting the agenda for food retailers serving the mass market.
All of which means Sainsbury has ended up looking like a company that is having to run hard simply to stand still. But Sir Peter clearly believes he has hit upon a strategy that will restore Sainsbury’s fortunes, particularly over the next 12 months as it starts reaping the rewards of initiatives such as its supply chain work and non food programme. We’ll know in a year’s time whether Sir Peter, or his critics, were right.
Whenever I talk to retailers about the margin pressure facing their suppliers, they often rightly point to financial figures that demonstrate the exact opposite.
Well, as you will see on page 37, our annual OC&C Index shows that food and drink suppliers may not have been crying wolf after all.
Somewhat inevitably, it is the smaller suppliers who are facing the most pressure. As our feature puts it: “Scale is a definite plus in a world where retailers continue to consolidate and increase their buying power.”
There are plenty of premier league suppliers who already have the scale, and the quality, necessary to build sales and profit. But even they are finding it tough to grow in the current trading climate.
And that means life is going to get even harder for those suppliers in the lower divisions of grocery.
Sainsbury: time will tell
Not Crying wolf
No comments yet