Marketing analysis: the UK supermarket battleground

Once again the BBC have posted up a clip that clearly and concisely (in two and a half minutes) neatly sums up the marketing challenges faced by the main UK supermarket chains: store locations, types of store, products, promotions, target markets … and prices.

On that point, there’s also more detailed news published recently about Waitrose matching Tesco prices, getting marketing mileage out of the John Lewis ‘never knowingly undersold’ pledge.

A great place to start is with the BBC video which serves as a terrific introduction.  The Waitrose article comes from The Guardian.

       

The grocer (part of the John Lewis Partnership) has been outperforming its larger rivals for several years, but in recent months have seen profits fall even faster than Tesco.  Now the managing director has said that it was investing “tens of millions of pounds” to extend its existing “price match” guarantee. “This is our equivalent of John Lewis’s ‘never knowingly undersold’ pledge,” he said.  The move is probably prompted by the squeeze on living standards in ‘double dip’ recession-hit Britain, which has made shoppers increasingly keen to hunt down the lowest prices and money-off vouchers. Higher food and fuel prices also mean industry sales volumes are falling, forcing the big supermarket chains to fight tooth and nail to hang on to their customers.

Meanwhile:

- Morrisons has recently lost market share, suggesting it was being outgunned in a voucher war at the checkout

- Tesco, which last month announced a £1bn investment in its UK chain after falling sales and profits, is offering £10 off a £80 groceries shop.

- Sainsbury’s is running “Brand Match”, which generates coupons at the till if branded goods can be bought cheaper elsewhere.

Waitrose is tiny compared to Tesco (with a market share of 4.5% compared with Tesco’s 30.7%) and has sought to shake off its reputation for being expensive by running more promotions and introducing its budget range, Essentials.

These moves aren’t perhaps surprising in the current climate, even though Waitrose tend to target an affluent market segment.

 

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