Sainsbury’s boss Justin King today (13 June) pointed to the “unique” coupons the UK retailer can offer consumers after rival Morrisons launches its own voucher initiative.
The use of coupons to offer discounts has grown in recent months and Morrisons announcement of its own scheme yesterday means all of the Big Four retailers in the UK are using vouchers.
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King, speaking after Sainsbury’s published its first-quarter sales, brushed off Morrisons’ move and pointed to the characteristics of his retailer’s scheme that set it apart from its competitors.
“Not all couponing is created equal. Our coupons are predominantly targeted using our data either at the till or in mailings to customers’ homes. They are coupons they value and they use,” he said.
Doesn’t the old line about copying being the sincerest form of flattery apply? What we have is unique and different because we have Nectar data that we combine with coupon at till. Morrisons are focused on the latter half of that because they don’t have insight to go with it. It’s a demonstration that delivering coupons to customers in a way that’s targeted is clearly a winning formula. It is for us.”
King added: “Because the coupons we are doing are targeted, they use Nectar data, they are delivered uniquely versus our competitors at till, one, we know that they work, two, our customers love them and three our competitors don’t like them very much cos they can’t do that.”
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By GlobalDataOn Monday, Tesco CEO Philip Clarke said the UK’s largest retailer has increased its use of vouchers after realising at the turn of the year its rivals had gained an advantage on the company.
However, Clarke appeared to criticise the increased use of coupons across the industry. “There has generally been an unhelpful step-up in the market of this type of promotion. We played our part in it as we planned to. If you stand by and do nothing, you leave the door open for others,” he said. “It isn’t the long-term solution. That’s about getting the right blend of price, promotions, quality and service.”
King said he believed Clarke was commenting on vouchers “less targeted” and “generic” vouchers consumers see in newspapers or receive in the post. “Broadly, we’ve never participated in that because we don’t see them as being as particularly wanted by customers or effective. The type that we’re doing is here to stay,” he said. “That kind of coupon where we can measure the effectiveness of the coupon very clearly is here to stay.”
Last month, when Sainsbury’s published its annual financial results, it said it had offered 375m coupons during the year. The retailer said some 125 suppliers had also participated in that activity.
Commercial director Mike Coupe said that trend had continued and said suppliers could benefit with running those campaigns through Sainsbury’s. “Suppliers buy into the idea and the advantage over some of our competitors is that we can be very targeted and from a supplier’s point of view that’s a very cost-effective use of their money,” he said.
