Mr Roberts (middle-left) says that major supermarkets like his are back in vogue - Paul Grover
Time-poor workers who have returned to the office are shunning Aldi and Lidl in favour of Sainsbury’s, the chief executive of Britain’s second largest supermarket has claimed.
Simon Roberts, Sainsbury’s chief executive, said that major supermarkets such as his were back in vogue as people seek out shops where they can buy all their groceries in one place, rather than hunting out bargains across multiple stores.
During the pandemic, “customers would have come to us for some products and they might have gone to one of the limited-choice discounters for other,” Mr Roberts said.
“Now there’s a lot more on for people. There’s been this return to the office and, especially around Christmas, we’re all short of time.”
Customers are “busy trying to manage a family, get to work, get the kids from school, get back in time,” he added.
The Aldi price match scheme has helped Sainsbury’s growth, says Mr Roberts - Henry Nicholls/Reuters
Sainsbury’s larger range compared to German discounters has become an attractive selling point in this context.
For example, Aldi stocks just a twentieth of the number of products as Sainsbury’s, at 2,000 compared to 40,000.
Mr Roberts, who joined Sainsbury’s in 2017 and took over as chief executive in 2020, told The Telegraph: “We’re seeing customers doing trolleys with more products in more regularly. That’s quite a shift from where we were three years ago.”
Britain’s second largest grocer last month recorded its biggest increase in shopper numbers in a decade. Sainsbury’s increased its share of the grocery market to 15.6pc at the end of November, up from 15.2pc the prior month. At the same time, Aldi’s market share slipped to 9.6pc from 9.7pc, according to data provider Kantar.
Mr Roberts said his supermarket had also been helped by its Aldi price match scheme, which guarantees customers the same price on 500 products.
Signs that Sainsbury’s is successfully staging a fightback against the discounters might come as a surprise to some, as cost of living pressures continue to weigh on shoppers.
Mr Roberts questioned the methodology of much of the research in the market. Sainsbury’s overhauled its Nectar loyalty card scheme earlier this year, switching it from a points-based system that allowed people to build up discounts, to a membership that entitled people to cheaper prices at the tills. The overhaul made the programme more similar to Tesco’s Clubcard scheme.
The prices used in the Which? surveys are not the ones offered to its Nectar loyalty card scheme. Mr Roberts said it is not right “to look at this through the lens of, what about the people that don’t spend with Nectar prices? Because, the vast majority do – they can see the value”.
Mr Roberts said the scheme had grown by 20pc since the relaunch earlier this year, adding 3 million new customers to reach 18 million members in total.
“They want to be able to access the best deals. It’s all about giving customers the best value.”
Good value or not, Nectar pricing has proved controversial. Britain’s competition watchdog last month launched a review into the loyalty card market, amid fears that those who don’t join are being short-changed.
The Competition & Markets Authority (CMA) is also looking into whether it is more difficult to compare prices between stores.
Sainsbury’s and Tesco have also come under scrutiny for selling on the data they collect through their loyalty card schemes. Estimates suggest the two supermarkets are making £300m a year from selling information about customers. Deals include a tie-up between Sainsbury’s and Channel 4 to offer more personalised adverts to viewers based on their shopping habits.
Mr Roberts has defended against criticism, claiming Sainsbury’s protects customers’ data carefully and anonymises findings.
Like the other supermarkets, Sainsbury’s will be “waiting to see what the CMA comes forward with next year”, he added.
Bolstering loyalty programmes is not something all its rivals have done. Aldi’s UK chief told the Telegraph earlier this year that it was keen for its shoppers to not “have to join a club”.
At Aldi, Giles Hurley said there was “no gimmick, and there’s no smoke and mirrors. It’s just honest, straightforward value”.
Aldi has also criticised what it sees as a dirty tricks campaign to sabotage its new openings. Sainsbury’s is among the supermarkets to have been rebuked by competition regulators over unfair land deals, which the CMA argues have been used to try to prevent competition from opening nearby.
Mr Roberts brushed off claims it has attempted to hinder its rival.
“The discounters have opened hundreds of stores,” he said. “There’s been a massive new store opening programme for those brands. I think what’s happening is customers are looking at prices and seeing how much more competitive we are.”
Mr Roberts points to the fact that shoppers are coming back from the likes of Aldi and Lidl as proof that the supermarket is “the most competitive we’ve ever been”.
Nectar prices are not offered at Sainsbury’s Local convenience stores. However, the grocer has doubled the number of entry level, own-brand products stocked at its convenience stores.
The Stamford Street range, as the budget line is known, covers more than 200 products including fresh fruit, yoghurts and cheese, as well as bread and cakes. Many of the items are part of Sainsbury’s Aldi price match programme.
Mr Roberts brushed off questions as to whether the Nectar programme will be rolled out at its convenience stores, saying: “We’ve put more of those value items in those stores and customers prefer that because, at the end of the day, you’re going to a convenience store for a top-up. Whereas in a larger store, you’re going to get more of the items you need for the next few days or the next week. Nectar comes into its own when you’re buying lots of products.”
With Sainsbury’s finally gaining ground from the discounters, Mr Roberts is preparing to move to the next stage of its plan to keep competitive in the cutthroat grocery market.
Sainsbury’s is on track to have stripped £1.3bn worth of costs out of the business in the three years to the end of March. Mr Roberts said this has been critical to helping it keep prices competitive in the face of double-digit food inflation.
He is in the middle of thrashing out the next phase of Sainsbury’s “Food First” plan, a strategy designed to help it cut costs. Details will be unveiled in February.
“The question now is: when we’re looking to take costs out, can we do it while making our stores better for customers?”
It is thought the next phase could include more automation.
“On checkouts, how do we help more customers to self checkout? How do we reduce stock loss so there isn’t this pressure on prices?”
With the crucial final days before Christmas still to go and a strategy update on the horizon, Mr Roberts insists he is not complacent: “There is a lot more for us to do.”
