Sainsbury’s sales decline hits record high

Sainsbury’s suffered its biggest sales decline for 20 years over the past three months as rival Tesco managed to stem its sales drop.

According to the latest Kantar Worldpanel figures, Sainsbury’s performance worsened dramatically over the 12 weeks to 12 October. Its sales dropped by 3.1 per cent in the period, down from 1.8 per cent a month earlier, its worst performance since Kantar began monitoring supermarket sales in 1994.

Market share fell by 16.1 per cent, compared to 16.7 per cent a year ago.

Kantar Worldpanel says it is too early to say if this is a trend or a one-off. Sainsbury’s last month launched price cuts across hundreds of branded products, supported by a marketing campaign aimed at communicating its lower prices and values aimed at boosting its sales (see video above).

Meanwhile Tesco’s saw a slight improvement in its sales performance. Despite a 3.6 per cent fall over the period, that was narrower than the 4.5 per cent drop a month ago.

This marks the first goods new for Tesco in a torrid year that saw it issue three profit warnings in eight months and admit last month that it had mis-stated its profits by up to £250m. New chief executive Dave Lewis, who was parachuted in a month early, has said the supermarket needs to “come back to its core” after admitting its reputation has suffered.

The latest figures from YouGov’s BrandIndex show the impact on consumer perceptions of the brand. Its Index score – an average of how consumers rate it in terms reputation, satisfaction, value, quality, whether they would recommend it and their general impression of the brand – dropping by a “statistically significant” amount over the last six months, to 5.6 from 11.6.

Its Buzz score – a net measure of the positive and negative things consumers have heard about the brand – dropped 19.4 points in the period, again a statistically significant amount and leaving it with a score that puts it bottom of a list of 27 supermarkets.

Tesco is due to update the market on its performance and the probe in the profit mis-statement on Thursday (23 October).

Elsewhere in the big four, Morrisons saw its performances worsen slightly with sales down 1.8 per cent. Asda was the only one of the big four to see sales increase, up 1 per cent in the period compared to 0.8 per cent a month earlier.

Sales at Waitrose rose 6.8 per cent to give it a record 5.2 per cent of the market. Both Aldi and Lidl experienced double-digit growth, although Aldi’s growth slowed slightly to 27 per cent.

Overall, the grocery market was pushed into deflation for the first time since Kantar Worldpanel began recording the metric in 2006, with like-for-like prices falling 0.2 per cent.

Fraser McKevitt, head of consumer and retail insight at Kantar Worldpanel, says: “This reflects the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories including vegetables and milk.”


Trends: Media multitaskers

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As consumers increasingly watch TV and use the internet simultaneously, marketers must think creatively to get their brand messages across to the surprisingly wide spectrum of media multitaskers.


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