'Sainsbury’s marketing to lift sales'
Sainsbury’s broad reaching marketing strategy is being lauded by analysts ahead of its full-year trading update next week, when the supermarket is expected to again report growth ahead of the market.
The supermarket has focused on value through its Live Well for Less marketing strategy, which focuses on the quality of its food offer as well as price, while rivals Tesco and Asda have focused exclusively on price cuts.
Analysts expect this to pay off with a 2% rise in like-for-like sales in its fourth quarter compared to the previous year. Total sales are expected to be up 4%.
Sainsbury’s brand match is thought to have delivered well for the supermarket by reassuring both customers of the value it offers.
Clive Black at Shore Capital says: “[Sainsbury’s] outperformance shows that price leadership is not the ‘be all and end all’ of an effective trading strategy in the sector whilst also revealing how effectively Sainsbury’s has played the deck of cards that it does have available to it.”
However, by not launching the same level of promotions around fuel as rivals Tesco and Morrisons, it may have lost ground in the petrol market, analysts say.
The supermarket reported its “best ever” Christmas trading at the start of the year, in contrast to Tesco which reported its worst in decades. However, Sainsbury’s market share remained broadly flat in the first three months of the year, according to Nielsen.
It is due to report its fourth quarter earnings on Wednesday (21 March).