Sainsbury’s CEO: ‘ASA is wrong to ignore provenance in price match rulings’
Sainsbury’s chief executive Justin King has continued its attack on the advertising watchdog saying it is “wrong” it “ignores” provenance when ruling on ads pushing price match schemes.
Speaking at a presentation for analysts unveiling its first-half results today (13 November), King said the decision by the Advertising Standards Authority to reject its complaint that ads for rival Tesco’s Price Promise scheme – which compares own brand products where an equivalent is sold by a rival – was unfair as the watchdog only assessed the veracity of the price claims.
Sainsbury’s announced last month it was asking for a judicial review of the ASA’s decision after an independent review of the watchdog’s decision ruled in favour of Tesco.
Kind said: “It is right we challenge. It is wrong the provenance, quality and country of origin are ignored by the ASA [when it rules on ad complaints].
He cited a survey it commissioned that found 84 per cent of customers believe the watchdog is wrong not to consider such factors.
“Eight of 10 customers think it’s wrong. If Pedigree can claim 8 out of 10 cats prefer its pet food we should be able to challenge the ASA with the same support,” he added.
A spokesman for the ASA says of King’s comments: “We stand by our decision and will defend our ruling at any judicial review”.
King made the comments while trumpeting the role its “values-driven” business played in its strong first-half performance.
Pre-tax profit grew 7 per cent in the 28 weeks to 28 September to £400m, up from £374m a year earlier. Sales from stores open for a year or more, excluding receipts from petrol and VAT, increased 1.4 per cent.
“Our values are difficult to replicate”, King added. He claimed it led industry efforts to rebuild trust following the horsemeat scandal earlier this year despite no horsemeat DNA being found in its products. “We have done as good a job as anyone [in rebuilding trust by being transparent over its supply-chain process] but it’s not a case of just saying we are the best it’s about saying we can do more.”
The supermarket’s use of the Nectar loyalty platform was also offered as a contributor to its strong performance. King said it had historically been “circumspect” in talking about it so it does not risk the competitive advantage Nectar offer by “laying bare” how it is used. It is important, he added, to credit its “data pull” ability that allows the supermarket to talk and reward customers on a “one to basis” as well as more efficiently cross sell and co-ordinate better cross channel activity.
Sainsbury’s first-half performance was driven by growth of own brand sales – the supermarket claims own-brand sales are growing at twice the rate of branded goods and its premium Taste the Difference range is growing by double-digits – and a 15 per cent increase in online grocery sales.
Rivals have performed less well. Market leader Tesco recently reported flat sales for its latest quarter, while Morrisons reported a drop in quarterly sales last week.
Sainsbury’s has today (13 November) launched its Christmas campaign. Activity includes a 50-minute film, directed by Oscar-winner Kevin McDonald that attempts to reveal how Britain celebrates Christmas.
