With the monumental deal between Sainsbury and ASDA taking the two’s store portfolio over 2,800 stores, the two giants have come under scrutiny from the competitions and marketing authority (CMA) whether they should be able to keep as many stores. What does this mean for the mergers in-store POS and current stance on quality Vs. Price.
Competition is always a good thing when it comes to supermarkets and retail. Displaying showstopping Free standing display units (FSDUs) and point of sale displays are a great way to set your store aside from a competitor. However, what if you don’t have a competitor? The problem with the lack of choice in the market place usually results in customer dissatisfaction. As consumers we like to feel in power of our buying habits and preferences, with the merger taking over the North, South East and Ireland with their store portfolio it could leave consumers with the choice of only one super market to buy their weekly groceries from, where a lot of consumers prefer cherry picking the best quality but at a fraction of the price.
As the map clearly illustrates, ASDA’s portfolio is mainly dense around the Scotland and Northern Regions with a spread of stores down South. This makes ASDA one of the better chains to merge with if you are wanting to take dominance over these regions. But looking at Sainsbury’s store portfolio, it is clear that they dominate different areas like the South-East, however there are a lot of over lapping stores which would populate the area with the two mergers.
When research was conducted an amount of 951 Sainsbury’s stores were found within Two miles of an ASDA stores. Given this, the CMA would be forced to react which could mean the closure of stores and the loss of jobs.
The CMA has 5 strategic goals to make sure that businesses are educated on how to provide the very best for consumers.
• delivering effective enforcement – to deter wrongdoing, protect consumers and educate businesses
• extending competition frontiers – by using the markets regime to improve the way competition works, in particular within the regulated sectors
• refocusing consumer protection – working with its partners to promote compliance and understanding of the law, and empowering consumers to make informed choices
• achieving professional excellence – by managing every case efficiently, transparently and fairly, and ensuring all legal, economic and financial analysis is conducted to the highest international standards
• developing integrated performance – through ensuring that all staff are brought together from different professional backgrounds to form effective multi-disciplinary teams and provide a trusted competition adviser across government
If the worst is likely to happen what would happen to the stores that were once ASDA and Sainsbury’s? With the likes of money saving giants Lidl and Aldi dominating the supermarket chains in terms of revenues it is a possibility that they will take over the empty stores forced to close down. Mike Coupe, Sainsbury’s boss doesn’t seem too worried about this as he has stated “Sainsbury’s is strong in the Southeast of England and Northern Ireland, Asda is strong in the North, Wales and Scotland. Although there are overlaps, there are high levels of complementarity in the overall store portfolios”. The merger of the two will see Argos, who was recently acquired by Sainsbury’s 18 months ago utilise unused space in ASDA. This will effectively offer ASDA’s customers more choice in terms of electrical goods and appliances.
The merger of the two sets out to take on the discount duo, Lidl and Aldi as well as online supermarkets such as Amazon. The Sainsbury-ASDA merger wants to offer customers a more flexible way of shopping and to cut prices by 10%, whilst still offering the same quality. It will certainly be interesting to see what type of POS the new stores will utilise, often cardboard dump bins and pallet wraps are used universally by supermarkets to market new offers and products. However, will the two combine their point of sale marketing to come up with something that trumps Tescos? We will be interested to see.
Research shows that 70% of decisions are made in-store at a Supermarket, proving that POP print solutions are one of the most effective ways to captivate consumers.
ASDA and Sainsbury’s are masters at creating clear and effective POP messages with Asda’s ‘Saving you money every day’ and Sainsbury’s ‘Feed your family for a fiver’. This gives the consumer an idea of what to buy in the in-store marketing promotions, instead of aimlessly directing them to a BOGOF promotion. It is proven that often consumers are willing to try something new, with 37% of shoppers purchasing something new because of an in-store promotion. This will be a great strategy for the Sainsbury-ASDA merger as they will be able to combine their own store brands into one and push the new brand to the end consumer.
Using point of purchase FSDUs and units are often a success in supermarkets with the likes of Toblerone end of aisle cladding which saw a sales uplift of 95% in sales of the 400g Toblerone. In 2015 we had our very own success when we were challenged by AG Barr create to create the focal point of a merchandise display for placement in the customer entrance of Asda andTesco supermarkets, plus cash & carries and Tesco service stations, to communicate the message that IRN BRU “brings life to Christmas”.
It had the desired effect of creating excitement around the brand and getting customers involved. One of the Asda stores reported seeing parents taking photos of their children next to the musical snowman. With some supermarket staff also in costume during the Christmas period (elves, Santa hats, etc), the display increased the overall festive feeling within the stores.
A distinct uplift in sales in the stores that placed a snowman display was reported by the client, and the reactions from stores were very positive. The display got customers talking about the brand from day one, and it was given premium location in Asda stores, where it was in the power aisle for six weeks.
As a depiction of the instant success of the display, it impressed Asda to the extent that the client doubled their original order quantity.
With the new merger of Sainsbury-ASDA it will be interesting to see how the duo develop their in-store marketing strategy to create a synergy of an online-offline marketing approach to attract a new customer.