UK: Good food costs more at Sainsbury's
In the meeting held yesterday (18 October) between the executive board of UK retailer Sainsbury and several financial analysts, CEO Sir Peter Davis was open about the inability of the supermarket chain to match its rival Tesco on the price of 9,000 different product lines.Davis defended this fact by stating: "People get what they pay for. Customers are used to paying a bit more and getting a lot more in return. We intend to improve our quality even further." He pointed to the introduction of a new "taste the difference" range, and the increase in the amount of fresh and chilled produce now sold in stores.He was also anxious to add that on those 9,000 more expensive products "we will never be more than 1½% dearer," and that "we will match Tesco on 1,000 key lines."The news came only hours after the troubled company revealed the relative success of measures designed to streamline its operations. Other attempts to revive Sainsbury's fortunes have included the implementation of a large-scale "cost efficiencies" programme, and Davis' announcement of this yesterday prompted a huge rise in the company's share value from 25¾ p to 379p. What happens to consumer confidence and loyalty now remains to be seen, but the response of the analysts present at yesterday's meeting was remarkably straightforward. One commented: "Basically they are saying that 'good food costs more at Sainsbury's'."
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