Sainsbury's, Greggs and Superdry in Christmas boom
The 'live well for less' supermarket, the architect of the Mexican Bandit Baguette and the manufacturer of the ubiquitous hoodies are today's festive winners.
Celebrity chef Jamie Oliver may have been axed as the face of Sainsburys, but his performance to date has led to an incredibly ‘pukka’ Christmas at the supermarket. He was the gushing enthusiast behind the ‘Feed your family for a fiver’ campaign that moved the brand away from its ‘Try something new today’ tagline, focussing instead on value.
Looking at the latest results – like-for-like sales (excluding fuel) are up 2.1% and transactions have jumped by 1.5 million to 26 million in the quarter ending January 1 – Sainsbury’s has dodged the retail bullet that has stymied growth at rival supermarket Tesco and Morrisons. Growth stands at just 0.7% at the latter and Deutsche Bank forecasts a 2% drop in sales at mega-corp Tesco for the six weeks to 7 January (we’ll find out the true stats tomorrow).
What’s Sainsbury’s secret? Well, its Brand Match initiative has been a real hit with cash-strapped consumers. Rolled out in October last year, it price-matches products against Asda and Tesco so that customers are never short-changed.
You’d think that this kind of discounting would prove pernicious during a time of mass price-slashing at all the major multiples. But Sainsbury's has paired the initiative with an aggressive online push – the 20% increase in online sales contributed a fair few pennies to its record-breaking Christmas performance – and a bullish bricks-and-mortar expansion: it recently opened its 1,000th store, as well as 21 new convenience stores.
Certain pundits have suggested that the figures have been massaged slightly, however. Knock off VAT and cut out the store extensions and like-for-like sales growth dries up completely. But this hasn't stopped Sainsbury’s CEO Justin King indulging in a little back-slapping: ‘This was a strong quarter, rounded off by our best Christmas ever, despite the economic backdrop.’ And market research data from Kantar Worldpanel published yesterday also confirms that Sainsbury's has had the strongest December of all of Britain's top grocers.
Also popping the champers today (or perhaps the Bucks Fizz), is high street sarnie and pasty-maker Greggs. The Newcastle-based firm - a stalwart of high streets up and down the country (it has more outlets than McDonald's in the UK) – has reported a 5.1% rise in sales for the five weeks to January 7. That’s a pretty tasty haul, especially compared to the meagre 0.8% growth posted in the previous quarter.
With average purchase value at just £2, it’s not wonder that prudent shoppers are flocking to Greggs to fill their tums. MT thinks that the two-for-one deal on the ‘Christmas lunch in a pastry’ festive bake was a sure sales driver.
And lastly, SuperGroup, the retail group behind the Superdry fashion brand, has posted a 22% rise in group sales over the Christmas period. The Cheltenham-based firm managed to sort out all the glitches in its distribution chain that strangled sales over the summer, pulling in £79m in revenue over the nine weeks to January 1. Not bad for a firm that issued a profit warning only four months ago in October.
And here’s an interesting nugget. Supergroup manufactures the omnipresent waterproof jacket, so beloved of superstar footballer David Beckham. Beckham has just been signed up by Sainsbury’s (for £5m) as the new ambassador for its Active Kids programme. See how it all comes full circle?
This article was first published on managementtoday.co.uk
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