Sainsbury’s was founded in 1869 by John James Sainsbury as a small shop in Drury Lane, London. However, in 1922, the company became the largest retailer of groceries, and now it is the second-largest chain of supermarkets in the UK and the third by market share. It possesses a sixteen percent of the whole United Kingdom supermarket sector, which proves that it is rather successful. The purpose of this paper is to investigate Sainsbury’s market by discussing its competitors, performance objectives, and market segment. Also, its logistics operations and logistics issues will be analyzed, and solutions to the mentioned problems will be suggested.
The holding company is divided into three sectors: Sainsbury’s Argos, Sainsbury’s Bank, and Sainsbury’s Supermarkets Limited, including convenience shops. Its most influential competitors are Tesco and Asda, which are on the first and the second places by market share accordingly. Tesco is a grocery and general merchandise retailer that provides retail insurance and banking services and is the market leader of groceries in the United Kingdom. In 2019, its gross profit was evaluated as £4.1 billion, and net income was £1.3 billion, while Sainsbury’s financial indicators were £1.3 billion and £219 million accordingly (“Sainsbury’s competitors,” 2020). Asda, another competitor, is a British supermarket retailer, which, in 2019, had a net income of £803.2 million (“Sainsbury’s competitors,” 2020). It is going to be rather challenging for Sainsbury’s to overtake the other companies and become the first one.
It is possible to say that the companys performance objectives are based on their reasonable and strong beliefs and values. The main purposes include compelling general merchandise and clothing, providing high-quality food, and developing complementary services, channels, and new businesses (“Our vision,” 2020). According to the company’s website, they “want to be the UK’s most trusted retailer, where people love to work and shop” (“Our values,” 2020). Also, their purpose is to play a “part in tackling climate change, injustice, and inequality and ending poverty” (“Our values,” 2020, para. 3). It is hard to disagree that the company is actually moving in this direction and puts the desires and comfort of its customers in the first place.
Sainsbury’s best marketing strategy, probably, is product differentiation, which is like an expression of the company’s creativity. It refers to creating such products or services that are unique and not offered by other companies in the industry. Differentiation may be achieved by changing products’ features and design, improving customer service, expanding the network of the company, and through the brand image. Sainsbury’s network is rather huge and covers most of the UK cities (Sainsbury’s, 2020). Another key marketing strategy is market segmentation, which is about dividing the company’s market into unique groups of clients who require different services and products (Aluko & Knight, 2017). For example, there are various stores for different age groups like shops with clothes and toys for children and banks offering services for adults.
However, despite Sainsbury’s success, there are some severe issues that the company tries to deal with. The first one is the consequence of market segmentation (McCarthy, 2019). As Sainsbury’s does not concentrate on one or two selling points, it is challenging to determine certain marketing strategies that would target the right type of clients and command customer loyalty (Onita, 2019). A way to solve this problem is to develop robust strategies for each company’s segment and close those that are not worthy of the efforts they require. At first, it may lead to economic losses, but then it has to get better. Another issue is related to the supermarket sector being highly competitive. Unfortunately, “Sainsbury’s is stuck in the middle – being too expensive for value shoppers and not perceived as high enough quality for the premium shoppers” (McCarthy, 2019, para. 2). This problem may be solved by choosing either value or premium shoppers as the target buyers and set prices and purchase goods mostly according to their demands. This should lead to an increase in the number of sales, growth in profits, and the appearance of regular customers.
References
Aluko, O., & Knight, H. (2017). From corner store to superstore: a historical analysis of Sainsbury’s co-evolution. Journal of Management History, 23(4), 423-435.
McCarthy, S. (2019). What’s gone wrong at Sainsbury’s? Three problems the supermarket must address. City A.M. Web.
Onita, L. (2019). Sainsbury’s beats rivals in weak grocery market. The Telegraph. Web.
Our values. (2020). Web.
Our vision. (2020). Web.
Sainsbury’s. (2020). Live well for less. Annual report and financial statements 2019. Web.
Sainsbury’s competitors. (2020). Web.