26th January 2016

Has the Big Four Supermarket Fightback Begun?

After more than 12 months of reports  focused on shrinking sales and market share, it seems things might be looking up for the Big Four supermarkets. Tesco saw its sales rise 1.3 per cent, year-on-year, for the six weeks up to the 9th January, while Morrisons enjoyed growth of 0.2 per cent over the last nine weeks of 2015 – its first increase in four years. While not exactly positive, Sainsbury’s saw sales decline by just 0.4 per cent, which is less than half the one per cent fall predicted by the City. Asda is not expected to publish its figures until mid-February.

These figures do pale in comparison with Lidl’s, which saw sales rise 18.5 per cent year-on-year in the last quarter of 2015. However, considering the difficulties the established supermarkets have had trying to protect their slice of the retail market from the discounter and its fellow challenger, Aldi, they will certainly be a pleasant and welcome surprise for their boards and stakeholders. In the battle for consumers’ hearts and cash, could the tide finally be turning in the Big Four’s favour?

Well, it may be too early to say for sure that the end of the supermarket war is in sight, but there are plenty of other green shoots suggesting a brighter 2016 for the Big Four, not least is improved brand perception, thanks to good festive marketing campaigns.

According to YouGov BrandIndex, Tesco’s buzz score – a balance of positive and negative sentiment felt towards a brand – has shot up from a low of -11.8 at the beginning of November to a statistically significant high of -0.4 in the first two weeks of 2016.  Researchers have suggested this improvement is, in part, due to its successful ‘Every Little Helps’ Christmas campaign showcasing its broad product range, helpful staff and its price-matching Brand Guarantee.

Sainsbury’s also enjoyed a bump in consumer sentiment from its Mog the Cat Christmas campaign. Its BrandIndex buzz reached a high of +11.9 on the 17th December 2015, more than double its score for the day before the advert launched.

Improved brand perception has played a key role in boosting sales across the Big Four over the festive season. But to ensure they hold on to this positive sentiment in the long term and claw back territory lost to the discounters, Tesco, Sainsbury’s, Asda and Morrisons need to do even more to adapt their marketing and communications to changing consumer buying habits.

More and more people, for example, are abandoning the big weekly grocery trip to a single store in favour of shopping little and often at a selection of outlets, not just to find the best deal on necessities, but also to source their preferred brands. My partner and I have to do this to find our favourite tea and to get the right food for our cat (he’s a very fussy creature). Communicating the product choice and convenience they offer these shoppers can go a long way towards drawing these pickier consumers into their stores, without alienating loyal customers.

While they are right to continue highlighting the value for money offered by their generic brands in their marketing (territory that has been unfairly ceded to Aldi and Lidl in recent years), Asda, Morrisons, Sainsbury’s and Tesco should be showcasing the additional benefits they offer. The Big four offer add-ons, including a broad selection of brands and products, high-quality fresh produce, as well as online shopping and click-and-collect, which all combine to give customers a positive experience and should rightly be the focus of marketing this year. Playing to their strengths in this way, the Big Four can ensure their sales continue to grow through 2016.

By Michael Wood, Senior B2B Copywriter