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April 27, 2005

Sainsbury's keep ad agency

Media Guardian reports Sainsbury's keeps faith with ad agency (registration required).
Sainsbury's today renewed its £45m contract with the advertising agency that created the Jamie Oliver adverts, but the fate of the campaign remains unclear. The supermarket said it was awarding its £45m advertising account to Abbott Mead Vickers BBDO, its agency for the past 25 years, handing it a two-year rolling contract. But the supermarket said no decision had been made about retaining the TV chef, whose contract expires next month.
It will be interesting to see what changes emerge.

Posted by Johnnie Moore on April 27, 2005 at 10:03 AM in Marketing | Permalink | Comments (2) | TrackBack

April 26, 2005

Sainsburys Cornflakes praised

Breaking news from the blogosphere. Simple Thoughts has finally revealed his assessement of Sainsburys Cornflakes, continuing his series of tests of rival brands. Here's the bottom line

must admit I was a bit worried when I opened the box, there was something almost COOP esque about them, but add milk and you could well be eating from the same box with the red and green bird on it. Sainsburys we at simple thoughts salute you, people this is a box worth buying, there is no idfference between them and kelloggs (only there sooo much cheaper)!!!

Posted by Johnnie Moore on April 26, 2005 at 08:45 AM in Food | Permalink | Comments (0) | TrackBack

April 24, 2005

Sainsbury: Too much Focus on the Bottom Line?

In order to remain competitive, Sainsbury – like most supermarkets - strives to minimise its costs. Major cost drivers include the cost of goods sold, staff salaries and property investments. One might imagine that keeping these to a minimum would lead to competitive pricing and increased market share.

However, an interesting article in the Economist suggests that successful retailer Costco pays its staff more than 50% higher than the industry average and yet sells more cheaply than most of its competitors, and remains enviably profitable. How is this possible, and what be might the lesson for Sainsbury?

My view is that the additional investment to attract and empower the workforce leads to more productive personnel who are better able to maintain supplier relationships leading to lower prices, and who are motivated to create effective logistical systems at lower cost. These cost savings more than offset the increased salary bill. Of course all of this requires significant culture change, but if not implemented could spell early demise or acquisition.

The retail industry does not have a culture of staff empowerment. In part, this may be because it has yet to embrace the knowledge era – the art of creating value through knowledge and people rather than through products and services. Instead, it gets locked into endless price wars and attempts to hold down costs rather than investing in knowledge workers whose very presence increases the value of the business.

In summary, Sainsbury needs to enter the knowledge era by hiring and paying for good personnel and viewing them as knowledge assets, not merely as an annoying addition to its outgoings.

Posted by Max Blumberg on April 24, 2005 at 08:16 PM in People | Permalink | Comments (4) | TrackBack

Britains food revolution

From Rod Liddle in today’s Sunday Times:

It is no longer enough for us to merely fill our stomachs. Our new and welcome commitment to good food and to taking pleasure, rather than merely sustenance from our mealtimes is evident everywhere you look: Jamie Oliver’s astonishing success in persuading us that school dinners are a national disgrace: the inordinate profusion of cookery programmes on television; the transformation of your local curry house, with its intravenous drip of cheap, gassy lager, into “Saffron – modern Indian cuisine”, where the dishes are required to accomplish rather more than simply leave you unable to sit down for a week. The next stage will be vastly reduced profits for Tesco, Asda et al as we rediscover the pleasure of eating good food, bought freshly and locally without adulteration, at home and attempt to replicate the dishes we have eaten in restaurants.

We are, as a whole, better off these days. we can afford to ignore Tesco’s wasteful and irritating injunctions to buy one, get one free. We are beginning to be reintroduced to the notion of “quality” food and that the quality of our food matters.

(read the full article here)

I cannot agree more.

Rod talks elsewhere about a recent international survey that showed that Britain has 14 of the top 50 worlds restaurants. Jamie, Nigella and others are massive hits not just here but internationally. Consistently, some of the best selling books are food orientated (3 out of Amazon’s top 10 at the moment). In London the farmers markets are positively booming. Indeed new ones are opening all the time. And all the specialist delicatessans seem to be thriving too.

Surely, somewhere in all of this there is the opportunity for Sainsburys to claim some ground as it’s own. To suitably differentiate itself. I will return in the next few days with another post on this subject.

Anyhow off to make our dinner – seared tuna steaks on a bed of courgettes with salmoriglio sauce. Eh? Revolution?

Posted by Fred on April 24, 2005 at 05:51 PM in Marketing | Permalink | Comments (0) | TrackBack

The Oliver Effect

Today's Money Telegraph links Jamie Oliver to rising organic sales at Sainsbury.

The supermarket said sales of organic produce soared by 20 per cent year-on-year in the weeks after Jamie's School Dinners, the Channel 4 series, ended in mid-March. At the beginning of April Sainsbury's organic food sales hit £2m a week for the first time.

I wonder what the effect was at other supermarkets? The piece goes on to suggest this increases the pressure to re-sign with Jamie.

Posted by Johnnie Moore on April 24, 2005 at 12:16 PM in Marketing | Permalink | Comments (0) | TrackBack

April 21, 2005

Austrian wine

Spitoon is a new wine blog, and a good example of the community of informed foodies that Sainsbury would do well to cultivate. Today, he reviews a range of Austrian wines and finds Sainsbury's wanting.

Austria has to be one of the most under-represented countries on the nations shelves. Oddbins lists just one. Tescos search facility found a German Riesling(!) while the Wine Cellar and Sainsbury's list none at all. Very disappointing. The wines of Austria are of world class quality encompassing, not only the sweet wines and Rieslings most of us are aware of, but also a collection of unique varieties and individual expressions of more well known grapes. To purchase any of these however it is to the independent sector you must turn.
Following up on Adrian's post yesterday, it would be easy for Sainsbury's to create a dialogue with guys like Andrew Barrow. Or will Tesco beat them to it ?

Posted by Johnnie Moore on April 21, 2005 at 12:42 PM in Food | Permalink | Comments (0) | TrackBack

April 20, 2005

More on blogging

Adding a bit more to Phase 2 of my suggested blogging strategy, the most important comments Sainsbury's could make are those which respond to complaints raised by other bloggers. For example, this might have drawn the sting out of the original post from EatNottingham:

Hello, this is Sally Blog from Sainsbury's. I was very sorry to hear about the difficulty you had getting all your desired ingredients from Sainsbury's for your dinner party.

You are perfectly right of course: we have been through a pretty torrid time keeping stock on our shelves and that in the main has been due to problems with our automated depots. We are now changing our working practises, in particular augmenting the automated depot systems with X number of staff, and increasing the number of in-store staff by Y number per store. Unfortunately, it is taking time for these changes to have a full effect, but we are making progress.

Across the country our availability, based on an average shopping basket test has improved by Z% over the last twelve months, and we have recieved encouraging comments from our customers in most areas. But I do understand that you were after specific ingredients, for a special occasion, not an average shopping basket. I know how frustrating it can be be to find a vital ingredient is out of stock.

To compensate for the problems, I would like to send you some wine to enjoy at your next dinner party. Please accept my sincere apologies, and email me the address to which you would like me to send the wine.

OK, it needs work, but you get the gist.

Posted by Adrian Trenholm on April 20, 2005 at 05:14 PM in Retail is detail | Permalink | Comments (0) | TrackBack

A simple blog strategy for Sainsbury's

We have been having fun here with Feedster over the last few days, which sparked a comment from Johnnie:

Yes! As we agreed at lunch, it would make a lot of sense for Sainsbury's to have someone monitor all these feedster reports and seek to interact on blogs with many of these writers.

So after about, ooh five minutes of thinking, and shamefully ripping off a couple of Johnnie's ideas, I present my Five Phase Sainsbury's Blogging Strategy:

Phase 1: Set up and monitor watchlists on Feedster etc

Easy and cheap - have a graduate trainee or a research assistant / speechwriter set up and read Feedster, PubSub and Technorati watchlists for Sainsbury's and other food-related blog posts

Phase 2: Comment on relevant blogs

Engage in debate, respond to criticism, have a laugh - bloggers will love you for it, for example:

Hi Andy. We are following your cornflake journey with baited breath here at Sainsbury's and we are relieved to see that our brand is nicer than the others you have tried. Best of luck with the rest of your experiment.

Phase 3: Encourage staff blogs

Microsoft has gained enormous credibility through Scoble et al. Why not Sainsbury's? Sun has shown the way with its staff blogging policy.

Phase 4: Start a Sainsbury's CEO Blog from Justin King

Bob Lutz's GM Fastlane blog started out very stilted, but he has been getting into his stride recently. Look at the number of comments he gets, especially those that begin respectfully "Dear Mr Lutz," which suggests to me he has an audience much wider than simply "other bloggers." Wouldn't it be great if Darren Shapland's appointment as Sainsbury's CFO had been posted by Justin King a la Bob Lutz?

Phase 5: Sponsor food blog(s)

Here's a case study: Sony sponsors Lifehacker, which dutifully posts the occasional "a word from our sponsor." But Lifehacker also posts loads of stuff about iPods and other products directly competing with Sony. Lifehacker wins credibility. So does Sony. Now imagine Sainsbury's doing the same on UK versions of Simply Recipes and Chocolate and Zucchini...

So there you have it, Sainsbury's. Blogging is fast, fun, simple and authentic. What are you waiting for?

Posted by Adrian Trenholm on April 20, 2005 at 01:18 PM in Marketing | Permalink | Comments (0) | TrackBack

Reintroducing Adrian Trenholm and a bit more on "why 173?"

So, I am no longer a guest author at 173 Drury Lane - Johnnie asked me recently to join him, Freddie and Max as a regular author and I was pleased to accept.

To reiterate my core message on this blog: The idea that we have no real food culture in this country - as opposed to say France or Italy - is outdated. There are big rewards for the supermarket which wakes up and takes a lead role in UK food culture. Unlike Tesco and Asda, Sainsbury's has the heritage, and possibly even the management will, to be a great food store. My posts here are aimed at exploring the nuts and bolts of "food focus," in particular:

  • Product range and quality - less junk and more healthy food, available consistently
  • Well managed, food-educated staff - real passion returned to buying and selling food
  • Leadership in food culture - dialogue with customers, and responsible leadership on health, supply chain and environment
  • Design and branding - to make food-focus successful in the mass, not just the niche, marketplace

I am grateful for all the comments and links to 173 Drury Lane so far and I am keen to continue what we have started. Johnnie emailed me recently:

It would be cool if [173] became the host for lively conversations with real [Sainsbury's] customers…

I like what James Cherkoff wrote recently about Open Source Marketing and I think this is very relevant to 173 Drury Lane:

There can be few marketeers who would admit to not being interested in their customers’ views and the issues that shape their marketplace. However, many do not appreciate the extent to which the new digital environment and distributed communications infrastructure has changed the rules of engagement.

So I ask you, if you haven't already, to comment here often, to link to us and to write about Sainsbury's on your blog, if you have one. Let's create a conversation that Sainsbury's can't ignore...

Posted by Adrian Trenholm on April 20, 2005 at 10:26 AM in About this site, Marketing | Permalink | Comments (0) | TrackBack

April 18, 2005

Tesco's "secret weapon"

Phil Dourado, author of the escw newsletter, relates this story about Tesco

Sir Terry Leahy, the chief executive of Tesco, recently revealed part of the secret behind the retailer's extraordinary success. He said that Tesco has implemented Kaplan & Norton’s ‘Balanced Scorecard’ approach to management, applying it to Tesco's ‘Steering Wheel’ system.

Sir Terry, speaking at the Leaders in London conference, organised by IIR, credited the balanced scorecard approach with inspiring the explosion in growth that has seen Tesco grab around 30% of the supermarket market in the UK, currently double the market share of rival Sainsbury’s, jumping from third place to dominant player and expanding abroad.

The balanced scorecard changes the way companies measure and manage. It emphasises parts of a business that do not figure in conventional accounting. "The reason traditional business systems did a miserable job in helping companies to grow is because they ignore so called 'intangibles', such as customer relationships," Professor Kaplan said at the same conference.

The scorecard was introduced as an antidote to a culture "where everything is about selling more and spending less and anything else is background music," he said. His partner, Dr. David Norton, said the same thing when he presented at our European Conference on Customer Management in London in May 2004, on how to apply the Scorecard approach to customer management.

Tesco's version divides the business into four sections. Managers are asked to monitor customers, operations, staff and finances using a "traffic light" system where green indicates that targets are being met and red flags a problem.

According to The Times Online, Sir Terry said that the adoption of Kaplan & Norton’s methods had been critical in differentiating the "two Tescos" – the unfashionable chain of the early 1990s, which held the No. 3 spot in Britain and operated only in the UK, and the modern day company, which leads the UK market and ranks No. 3 in the world. "This system literally steers our business and our people," he said.

Posted by Johnnie Moore on April 18, 2005 at 03:07 PM | Permalink | Comments (2) | TrackBack