Sainsbury’s marketing is 'too forgettable' says retail analyst as sales slip for sixth consecutive quarter
Sainsbury’s has reported a sixth consecutive quarter of declining sales after the struggling retailer posted a 2.1 per cent drop in like-for-like sales, excluding fuel, of 2.1 per cent in the 12 weeks to 6 June.
The dismal results come as Sainsbury’s is buffeted by deflation and a bitter price war which has forced the supermarket chain to slash prices to prevent shoppers from deserting it.
This has had some success with Sainsbury’s growing market share by 0.1 per cent over the past three years to 16.5 per cent in 2015, significantly better than Tesco which lost 2.3 per cent of customers.
Over the same period however Aldi and Lidl both increased their market share from 2.9 to 5.4 per cent and 2.8 to 3.9 per cent respectively.
Sainsbury’s focus on price may be costing it more than just reduced till takings, according to Phil Dorrel, partner at consultants Retail Remedy, who advised Sainsbury’s to "re-establish the compelling reason to shop at Sainsbury’s which was always about quality’, warning that ‘they just don’t shout about it anymore."
Dorrel added: "Sainsbury’s marketing is too forgettable. With the exception of the Christmas chocolate bar advert, the marketing has done nothing to drive much needed footfall into the stores.
"Tu Clothing is fashionable, priced attractively and could be a real point of difference, but in-store execution is inconsistent, and often looks like an afterthought when it should be driving great margin enhancements."
Moving forward however Dorrell warned that the biggest threat facing Sainsbury’s wasn’t from the much heralded rise of Lidl and Aldi but a ‘resurgent’ Tesco in the throes of a modernisation drive.