Sainsbury’s outspends rivals on advertising, but continues to lose market share
Sainsbury’s spent the most on TV and press advertising in January 2015, but the marketing push failed to stem dwindling market share as it lost a further 0.4 per cent year-on-year, according to Neilsen.
In the four weeks ending 31 January, Sainsbury’s spent £4.6m on TV and press advertising with a campaign promoting its lower prices on "products that matter".
The supermarket's spend was just ahead of Aldi's, which ploughed £4.5m into activty like 'Aldi Challenge'. However, the German discounter managed to grow its market share from five per cent to 5.8 per cent versus Sainsbury's fall from 16.7 to 16.3 per cent.
Marks and Spencer increased its spend the most – up 153 per cent to £2.1m year-on-year, which helped bump its market share from 3.2 per cent to 3.3 per cent.
Lidl followed closely with its marketing budget soaring 138 per cent to £2.4m. Market share for the discounter similarly increased, up from 4.3 per cent to 4.9 per cent.
Overall, Aldi’s sales grew 17.3 per cent year-on-year, and Lidl’s, 13.8 per cent, versus a total supermarket sales increase of just 0.7 per cent.
Now, the discounters have a combined market share of 10.7 per cent – or £1 in every £9.31 spent at UK supermarkets – up from 9.3 per cent in the same period last year.
“The 10 per cent market share for discounters has not been seen since the heyday of Kwik Save some 15 years ago,” said Mike Watkins, Nielsen’s UK head of retailer and business insight.
“Initially built on the premise of saving money, the new wave of discounters are now a regular part of grocery shopping and have changed shopping habits forever. For instance, switching to cheaper grocery brands is again the top household tactic for saving money. Furthermore, nearly half of those cutting costs will continue to buy cheaper grocery brands even when economic conditions do improve.
“However, what is different this time is that discounters are no longer solely associated with price. They’ve been very astute at promoting the quality of their offerings to appeal to a wider range of consumers.”
Earlier this week, Kantar Worldpanel data suggested Tesco's fortunes were beginning to turn as sales increased 0.3 per cent year-on-year,