UK retailer Sainsbury’s said today (8 October) that the increase in its half-year sales was a consequence of its strong value message.
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The UK’s third-largest grocer booked a 3.9% rise in like-for-like sales for the first half of its fiscal year.
As cash-strapped consumers look to cut spending, the company revealed that its entry-level Basics range has witnessed 30% growth year-on-year.
A spokesperson for Sainsbury’s told just-food that these gains can be attributed to the current trend for consumers to selectively trade down.
“We are seeing people switch to Basics products, depending on their end use. They are also switching from eating out and takeaways to ready meals from us,” the spokesperson said.
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By GlobalDataHowever, Sainsbury’s said it has not witnessed a decline in its premium Taste the Difference sales.
“We aren’t experiencing pressure in our premium ranges because when people substitute a takeaway for cooking at home they buy Taste the Difference ready meals or ingredients so it still feels like a treat,” the spokesperson said.
Sainsbury’s marketing has emphasised the savings that can be made by selectively trading down, with the ‘Switch and Save’ promotion that includes adverts featuring celebrity chef Jamie Oliver. Switch and Save highlights the savings that can be made when consumers opt for Sainsbury’s own-label goods over branded products.
Verdict Research analyst Nick Gladding told just-food that Sainsbury’s has successfully positioned itself to communicate a value message – meaning that the group emphasises quality, service and price in its marketing.
“Sainsbury’s has become better at serving its customers and communicating a stronger value message, meaning that it is positioned well in the market,” Gladding said.
