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Sainsbury's and Tesco: Retaining market share during the credit crunch
MarketLine, October 2012, Pages: 21
Sainsbury's initial campaigns promoted brands, own label products, and buying basic ingredients. As the credit crunch continued, Sainsbury's launched Live Well for Less. Tesco emphasized price in 2008 with the Discount Brands scheme, and in 2011 with the Big Price Drop.
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In response to the credit crunch, Tesco emphasized price, launching Discount Brands in 2008 and the Big Price Drop in 2011. Tesco also diversified geographically. In 2012, Tesco issued a profit warning and announced it would put more focus on the UK business with a £1bn investment.
Sainsbury’s was the most profitable grocery retailer for decades before being overtaken by Tesco in 1995 and Asda in 2003. In 2004, Sainsbury's launched the three-year Making Sainsbury's Great Again plan. In 2008, underlying profit before tax for the year was £488m, up 105% from £238m in 2005, prior to Making Sainsbury’s Great Again.
In 2009, Sainsbury's launched the extensive Shop & Save, Switch & Save, and Cook & Save, which, respectively, promoted brands, own label products, and buying basic ingredients and cooking from scratch. The more recent Brand Match has helped to change customer perceptions of the price of products at Sainsbury's.
Your key questions answered
- How have Tesco and Sainsbury's performed during the credit crunch? Have they lost or gained market share?
- What have Tesco and Sainsbury's done to retain customers and gain new ones? Have their marketing strategies worked?
- What do Tesco and Sainsbury's have planned for the future? Do they plan to expand or focus on existing stores?
Sainsbury’s has successfully increased market share throughout the difficult credit crunch
Sainsbury’s has grown from one shop in 1869 to over 1,000 in 2012
Sainsbury’s immediate reaction to the credit crunch in 2008 emphasized saving
Brand Match and "by Sainsbury’s" help customers Live Well for Less
Sainsbury’s has consistently aimed to increase its store space
A series of failed marketing schemes by Tesco culminated in a profit warning in 2012
Tesco was founded in the 1920s and is now a leading global retailer
Tesco emphasized price above all else
The company has also had difficulties in overseas markets
Tesco issued a profit warning in 2012
Tesco plans to “build a better future” and concentrate on UK sales
Sainsbury’s has increased its market share, while Tesco’s share has reduced
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