Experts say Sainsbury's move puts Tesco on back foot

Wed, 18 Nov 2009 | By Rosie Baker

Tesco CEO Sir Terry Leahy announced Bogof Later in October, but the supermarket giant has yet to implement the scheme in its stores.
Industry commentators believe that Sainsbury’s has trumped its rival because the initiative gives it “first mover advantage” but they expect Tesco to ramp up its efforts.

Alan Treadgold, head of retail strategy at Leo Burnett, says: “There’s certainly kudos due to Sainsbury’s for getting to market first but it will be interesting to see whether Tesco goes to market with a bigger programme.”

The “Buy Now - Free Next Time” trial launches on Wednesday (18 November) and will run across two products - Pampers Baby Dry Nappies Carry Pack and Sainsbury’s white baguettes - for seven days at 470 Sainsbury’s stores.

Dr Tim Denison, retail psychologist at market research firm Synovate and member of the Retail Think Tank, says: “It’s unlike Tesco to say something and not deliver, so it might be a bit of an own goal. People are beginning to waiver in their loyalty for Tesco and if Sainsbury’s can make this stick, it could leverage its position in the market.”

Commentators are split on whether similar Bogof deals will become the norm in retail promotions. Denison says it could breathe life into the kind of promotional campaigns retailers use but adds that it’s unlikely to become mainstream because it adds in complexity where most retailers are trying to strip it out.

Malcolm Pinkerton, senior analyst at Verdict Research, believes it will become more widespread as grocery retailers are quick to copy each other’s promotions.

He adds that deferring Bogof deals is a way of adapting a traditional promotional tool that no longer fits with shopper behaviour to something that plays to the ethical mindset.