What does the latest Sainsbury’s strategy announcement mean for suppliers, large medium and small?

To maximise the value of upcoming, almost inevitable investment discussions with Sainsbury’s, branded manufacturers have to take a cross functional approach to Commercial Marketing, putting the full weight of their insights and brand credentials to work. We encourage branded manufacturers to walk towards these conversations, with some very clear category recommendations and investible initiatives in hand.

Sainsbury’s this week announced the evolution of their 2020 Food First Strategy, holding their “Next Level Strategy” update.

How do branded suppliers walk towards Sainsbury’s to unlock value in this relationship? We believe that in-store “Commercial Marketing is a key enabler – but one that many businesses fail to fully understand.

We talked to Anthony Carr, Managing Director at Sellex, for his perspective.

Branded manufacturers must dig deep for Category and Shopper insights which will maximise the sales intensity for their brand, with fantastic programmes, brilliantly executed through cross-functional working and collaboration.  At Sellex, we feel passionately that Shopper Marketing is Commercial Marketing. It is the domain of all functions within a branded manufacturer. Shoppers are making their buying decisions ever closer to the point of purchase, are Brand Teams close enough to the discussion?

Some key questions to be asking yourself

  • How did your business fare through the Sainsbury's Food First discussions of 2021/22? – does everyone understand this or just the NAM? What are the learnings, what are the opportunities?
  • Do you understand the value created by Nectar activity? Sainsbury’s does – it’s going to deliver an incremental £100m profit over the next 3 years. What elements are best for your category and brands?
  • What does the evolving strategy mean for housewares, toys etc. Sainsbury’s appears over-spaced in this area, but what does it mean for you?

Exciting Fresh and Ambient Activations – but be clear on the Category and Shopper opportunity

Sainsbury’s also has a unique opportunity to follow in the footsteps of Tesco and Asda, making for some exciting “shops within shops” such as Decathlon and The Entertainer (*but much more likely to be food-led executions). The removal of the Lloyds Pharmacy space ultimately led to poorly executed HFSS display space – this must be executed better and I believe Sainsbury’s would relish an approach from branded businesses on how both Fresh and Ambient space can be made more exciting. They understand their shoppers overall, but you understand how shoppers shop (and want to shop) your category.

Don’t wait to be asked for your contribution

Putting food truly first is going to require significant Capex – what will the investment ask be of your business? As a retailer on a roll (Sainsbury’s is the only supermarket growing volume and market share in the latest Nielsen IQ results) you can bet it is going to be significant. Are you ready with a list of asks beyond distribution and promotions – a proposal for everyone to get excited about?

Supermarkets generally look tired. This is an opportunity if tackled correctly, a very big threat to margins if approached blindly. Which side of the debate will your business be? How exciting are your plans for the Category in which you operate? How can you bring them to life profitably with Sainsbury’s?

Do you view it as a “raid on suppliers” or an opportunity to win big? You will be asked to invest either way, better to walk towards the conversation with category-led, insightful proposals.

At Sellex, we can help you create a strategy to win big with Sainsbury’s (or any other retailer for that matter!). Get in touch to discuss how