Sainsbury's to switch to a mid-low pricing strategy as sales continue to fall

By Richard Siddle

Published: 01 October, 2014

Sainsbury's is to start comparing and benchmarking its pricing levels against Asda rather than Tesco as it looks to switch to a new mid-low pricing strategy following a fall in sales for the third quarter in a row.

Sainsbury's Sainsbury'sSainsbury's

Sainsbury's will, from tomorrow, base its Brand Match scheme to the pricing levels set at Asda as it looks to address the inroads the hard discounters are making in to the sales, profits and performance of the major grocery retailers.

Today Sainsbury's has announced its like-for-like sales, excluding fuel, for the three months to the end of September fell by 2.8% and that its overall second half of the year performance would be "similar to the first half". Total sales also fell by 0.8% in the third quarter.

It also marks the first set of figures presented by the chain's new chief executive, Mike Coupe. He told this morning BBC Radio 4's Today programme: "Clearly in the last few months the pace of change in our industry has changed beyond all recognition."

"Clearly in the last few months the pace of change in our industry has changed beyond all recognition."

He added: "Customers are shopping very differently to the way they were shopping even a year ago. They are shopping much more frequently and little and often shopping so these trends are changing very rapidly."

The new mid-low pricing strategy, as reported by Harpers sister title, The Grocer, is further evidence of the impact the surge in shoppers switching to Lidl and Aldi is having on the major grocers. Sainsbury's has already reduced the price of 12,000 products over the last 18 months.

It is promote its new pricing strategy through a high profile TV, print and in-store advertising campaign.

Sarah Warby, Sainsbury's marketing director, told The Grocer: "Customers tell us they find supermarket prices and promotions confusing and don't always know who to trust when it comes to getting good value."

Switching its price benchmarking to Asda rather than Tesco was, according to a spokeswoman, because "we have reached a point where telling shoppers we match or are cheaper than Tesco is not a surprise anymore".

Sainsbury's insists it will still be offering the same number of promotions, but that the difference between on and off-promotion pricing will be smaller which will be seen as a nod to the EDLP (Every Day Low Prices) strategy that Asda has steadfastly stuck to.

Printer friendly version