Sainsbury's new CEO Mike Coupe said the UK’s third-largest grocer plans to keep its price positioning even as competition from Aldi and Lidl force rivals to discount.
“We are confident in our price position,” and the company will “make a virtue” out of sticking to quality, said Coupe, taking over as CEO today from Justin King, who led the company for the past decade. Coupe spoke at the company’s annual shareholder meeting in London.
King’s nine-year record of unbroken sales growth ended two quarters ago as the U.K. grocery market is polarising, with discounters Aldi and Lidl and upscale Waitrose recording the fastest growth. Under Coupe, the supermarket chain will target both ends of the spectrum: focusing on fresh produce and premium own-brand food at Sainsbury’s and also entering the budget store market by bringing Netto back to Britain.
The grocery market “is an intensely competitive market and will be for the foreseeable future,” Coupe said.
Sainsbury has had two quarters of same-store sales declines after discounters prompt the likes of Tesco, Asda and Morrisons to cut prices. Sainsbury is matching some price cuts, though has stressed that its supermarkets will keep focusing on fresh produce and premium own-brand food.
King said on 11 June that he expects Sainsbury’s same-store sales to return to growth this year.
Sainsbury’s market share rose to 16.7 per cent in the 12 weeks to 22 June from 16.6 per cent a year earlier, with sales increasing 3 per cent, outperforming the market which expanded 2.8 per cent in that period, researcher Kantar Worldpanel said on 1 July.
The grocer said on 20 June that it had joined forces with Netto’s Danish parent company Dansk Supermarked to open 15 stores by the end of 2015.
Bloomberg News edited by ESM
