Sainsbury’s latest push to further increase margins (historically lagging behind competitors) is to heavily promote their Basics range.
An utterly bizarre decision, it’s heavily marketed with billboards, TV and Print media advertising but why?
The Basics range (like Morrisons Value, Tesco Value, Asda Smartprice) is low margin, low priced food of varying quality. In store planograms have the low priced stuff on the bottom shelves meaning the poor shopper either doesn’t see it or has to bend down to get it. On the Bakery fixture especially you will see this, the 13p Apple Pies are at the bottom and Mr Kipling are at eye level (as Manor Bakeries pay £££ to have these sited here).
I have no doubt that the Basics food at Sainsbury’s is of decent quality, but that’s all it is, it’s never going to be a gourmet feast and more importantly, its never going to make Sainsbury’s millions of pounds of profit like their own label and Taste the Difference range do.
I admire their stance on trying to save the consumer money but why not invest the marketing spend on Basics into price cuts on the own label / branded products? Sainsbury’s effectively say if you want to cut the cost of shopping with Sainsbury’s, you have to trade down in product.
More to come on our blog in the coming weeks on other matters linked to the wider supermarket world too.
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Grocery Insight provide market insight on the UK sector with a focus on individual retailers such as Tesco. This insight is useful to various stakeholders and due to my store based focus. Insight can be delivered to suppliers to focus on growth opportunities, analysts and investors to assess the business performance and long term outlook and retailers themselves to assess best practice.