How Tesco Beat Sainsbury - 1

I am starting a series on "How Tesco Beat Sainsbury", based on my Research and Notes on the said Topic. I found it a very interesting subject to study, because Tesco did the "Awesome" during a "Recessionary Period" - something that we probably are in today.

My sources of information are:

• BBC News The Company File Profits a store point for Sainsbury's
• BBC News The Company File Shake up at Sainsbury's
• BBC News The Company File Stores at war winning secrets
• Marketingweb - ADVERTISING - Case study Tesco - Pedro de Gouveia of Salient Strategic Advertising & Design
• ResQ Management Resources
• Supermarket sweep Nic Paton
• Tesco leaves them trailing

The (Insightful) Takeaways:

1 Market Leadership by Tesco in 1995
Between 1990 and 1999, Tesco's turnover increased from 8-billion to 17-billion pounds sterling and its share rose from 9.1% to 15.4%, overtaking Sainsbury's to become market leader in 1995. (Institute of Grocery Distribution, Grocery Market Shares: Dec 1989 to June 1999).

2 Sainsbury Faux Pas(ses)
2.1 Red Tapism
While Tesco extended its lead at the top of the supermarket table (in 1995) and Sainsbury's was left languishing in its wake – Analysts believed the group had been dogged by bureaucracy and an old-fashioned management style which left it without the fleetness of foot enjoyed by its nimbler rival.

2.2 Bad Advertising

• Sainsbury's 1999 Advertising Campaign - which featured Monty Python comedian John Cleese shouting loudly about Cheap Offers - flopped badly. For a supermarket which had prided itself on Quality - to shout about economy goods proved to be a a misguided tactic. It was a marketing disaster which many analysts believed destroyed its credibility in the City.
• The commercial, which showed him bellowing at staff through a megaphone, brought protests from workers - and customers - that it was patronising. The campaign was voted most irritating advertising of the year in a Marketing magazine poll.
• Also, Sainsbury famously ditched probably the best-known advertising slogan in retailing: "Good food costs less at Sainsbury's".
• The company then tried out a variety of slogans, ranging from "Everyone's favourite ingredient" to "Fresh food, fresh ideas" and "Value to shout about".

2.3 Organizational Issues

• Sainsbury's profits and its share price had stalled.
• The group's orange and brown logo and livery was to receive a £100m facelift as Sainsbury's tried to position itself for the new millennium.
• There are rumblings that the Sainsbury family had become restless at the group's lack of success and looked to sell up and bail out. There were even rumours that Sainsbury's could fall prey to a takeover bid.
• 230 jobs were lost with the closure of the head office of its Savacentre division, followed swiftly by a cut of 300 head office jobs due to "unacceptable" sales figures.
• Between two and four middle management jobs were shed in each store - 1,100 in total. The individuals were moved to other jobs or retrained, although some redundancies were likely among those who disliked the change.