Sainsbury’s is to launch a massive consumer promotion next week to mark the end of its 125th year, supported by £1m of television and press advertising, amid fears of a new supermarket price war.
The month-long promotion will offer £1m of prizes, including 125 cars and 125 holidays, and special price reductions on selected products. Suppliers are being asked to contribute to prizes and price promotions. Prizes include “shopping at 1869 prices” for 3,500 customers.
Sainsbury’s director of marketing Anthony Rees says: “There will be special offers on products, but the main emphasis of this celebration is to mark our 125th birthday.”
Neil Curry, analyst at Sainsbury’s broker SG Warburg, says the promotion is unlikely to have a long-term impact on margins. “This just looks like another way of packaging the usual weekly price reductions. Food retailers often use themed promotions at a quiet time of year like this.”
Other analysts fear a new price war between supermarket chains, which could damage margins. Last week, rumours of a big new price promotion wiped 7p off Sainsbury’s share price.
One retail analyst says: “The Sainsbury story was a storm in a tea cup. However, we are likely to see one of the food retailers upset the applecart in the next six months.”