Blog: Dean BestSainsbury's pulls the price lever

Dean Best | 21 March 2018

Sainsbury's, the UK's second-largest grocer, has set out plans for lower prices on a range of products, a move announced amid signs of pressure on its market share.

The retailer said it is cutting the prices of "930 every day grocery products".

It said it is investing GBP150m (US$211m) in the price reductions, cuts CEO Mike Coupe said would "give customers more reasons to visit our stores".

Coupe said: "They can do their entire shop with us, confident that they are getting great low prices as well as Sainsbury's quality and choice."

Earlier this month, industry analysts Kantar Worldpanel published its latest set of data on the market share enjoyed by the UK's largest food retailers.

In the 12 weeks to 25 February, Sainsbury's remained the country's number two grocer by market share, accounting for 16.2% of sales, behind long-time market leader Tesco (with 27.9%) but ahead of Walmart-owned Asda (at 15.6%).

However, according to Kantar, while Sainsbury's sales during the 12-week period rose 1.1% year-on-year, the market grew by 3.2%.

The growth seen at Sainsbury's was the slowest of the UK Big Four multiples, which also includes Morrisons at fourth on the list.

Aldi and Lidl, which have eaten into the Big Four's market share over the last decade, continued their strong growth, with sales up 13.9% and 13.3% respectively, likely boosted by store-expansion programmes.

While Kantar's numbers are not like-for-like figures and getting such metrics out of the privately-owned Aldi and Lidl is not always easy, the latest move by Sainsbury's can be read as a sign to try to shore up its defences on price, a decision made all the more vital by the progress made by Morrisons in recent quarters.

Sectors: Retailers

Companies: Sainsbury’s

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