As a Sainsbury's client I think I understand how they have managed to grow profits despite being in a severe recessionary economic climate. Have you noticed how all those marginal turnover lines that you used to be able to find have disappeared off the shelves? Well I have, agreed I am a foodie and thus part of a minority group, but that a major outlet is cutting back on its supposed diversity should be of concern to us all. I am talking about the real heart of any supermarket, its food, not all the more profitable and lets skim them while we have them household goods that are crowding out our real reason to visit, the food. This is after all what we gave up our local friendly knowledgeable shops for, diversity of produce conveniently brought together with easy car access.
Another way Sainsbury's seems to be producing profits in a declined market is by slogging it out head to head with the market leader, Tesco's, on a price matching death spiral. None can survive out competing each other on cheapest prices. Except of course the supermarkets are never the losers just every other person or company that comes in contact with them. You can take it as fact that a supermarket will not sell at a loss, they will make a margin no matter what. The no matter what is that intangible quality and the other unseen the health and well being of their suppliers. So here you should be very afraid as you now are totally dependant on a supermarket to supply your needs, they have seen to it that all rivals are extinguished. They determine the quality of the food you get to buy. If for competition reasons they need to cheapen the price by dropping the quality then they will do it and you the consumer buying your usual brand will never know your life quality has just been turned down again by them.
Likewise the old reassurance of product producers caring and maintaining standards is an image of a past gone dead age. The supplier is now totally beholden to the supermarket, they have to comply to the price dictated by their only outlet, the supermarket. They have to survive and if they are told to cut margins they might gamble on a short term loss but really have no option but to cut products costs so they can still survive for another day, A limping hope for a better day.
There is no reassurance to be had in relying on quality standards. The actual things that can be measured and compared are hugely limited against all the intangibles that make up a quality product, whether subjective choices about packaging, ingredients sources and quantities, density and viscosity, residual aromas or textures. In the end you just cannot replace a sensitive passionate person who cares about what he is producing by some objective standards that are incapable of circumvention. It just cannot be done. Yet these are those very intangibles that the supermarkets routinely squeeze to make their profits and everyone in the supply chain is powerless to resist their demands.
Now when I am offered a 20%, 50% or even a 70% discount or a Buy 1 get 1 free, or 2 for 3 or 4, two things spring to my mind. Firstly well I must have been paying way over the odds before you came up with this offer. It is an insult to now rub my nose into just how much you have been ripping me off in the past. The other reaction is, if, what I paid in the past, is a fair price, what have you done to the product or the supplier to now be able to offer it so cheaply. Try if for yourself. Take a tin of baked beans and sieve out all the gloop and then look at the beans you have in the sieve, the quantity of gloop that has passed through and compare that to the tin. Now ask yourself whether you feel fairly treated by that product.
Don't blame the producer as I am sure they would much prefer to provide you with a desirable product that you will enjoy and will want to come back for more of. But they don't sell it to you, the supermarket does and they decide on your behalf what minimum quality it suitable for you. As I have said the producers have no choice. They either sell to the margins dictated by the supermarket or they in effect don't sell as there is no alternate mass market for their product. When locked into a head to head on a price competition we, the consumer lose out big time.
There is no going back, except perversely, in the growing 'Taste the Difference' market where they sell at a premium price the quality that has beaten out of the 'normal' brand. Beware even here, the introductory product comes in on a flourish of high quality and zeal. If it gains a market share and stays on the shelves you will discover the same inexorable whittling away of standards. If only we, as consumers, could keep the introductory offer and then compare it to the product sold years down the line to make the point.
The reason all those years back that I became a Sainbury's client was that they set their stall higher than others on the street. They prided themselves on spacious uncluttered displays and sold to a discriminating middle class. I felt comfortable and found products intune with my social expectations. A happy symbiosis. Things have moved on and now Sainsbury's, no longer the market leader, are vying with Tesco's for the gutter, the bottom lowest common denominator. Sorry pack em high sell them cheap has never been an aspiration of mine. Buying food is all about social awareness, it is an aspirational living statement of the qualities that you bring into your life. The cheapest with the least taste and texture has never and will never be a criteria I will follow. Yet it seems that this is Sainsbury's destiny. Once they had a clear vision and a confidence in how they wanted to go about selling and were not afraid to standout from the crowd. Now they have lost their way, their motive for being, only looking to match competitors. Not the trail blazer, the standard setter, just another also ran.
Fortunately where there is a gap in the market another will come along and seize advantage. So I am now lucky I have a Waitrose nearby. Once in a car I might as well go one place as another. I don't feel like a Waitrose client, too pretentiously extravagant for my tastes, but on balance preferable to the pack em high, sell cheap preoccupations of Sainsbury's. On this note I must also mention M&S who are targeting the affluent singles market, well done them. Maybe I not yet ready for them. Whatever, watch out Sainbury's you have forsaken customer loyalty and there may now be no end to your slide off that market leader pole.
No comments:
Post a Comment