Outlook: A tale of two very different stores
Saturday 05 June 1999
This is a brutal industry where the weaker members of the pack are harried half to death rather than being allowed to limp along until they find their feet again. Tired and wounded, Sainsbury's desperately needs breathing space to regroup. Sadly for the senior executives round at Stamford Street, they are never going to get it.
Tesco's latest figures, with underlying sales up by 3.7 per cent, might not look much. But Sainsbury's figure is a big fat zero at best or even one than has a minus in front. To add insult to injury Tesco is adding 20,000 new jobs as part of a huge expansion programme while Sainsbury's is axing 1600.
This week's events have explain why Tesco has become Britain's top supermarket retailer and Sainsbury's has forfeited its crown. Sainsbury's admission that three quarters of its stores are not up to the mark is serious confession for a chief executive to make but it probably did not it come as a huge surprise to many shoppers. Most of us can name a clapped out branch of Sainsbury's. Precious few can name a down-at-heel Tesco. Tesco's strategy has been a model of consistency, delivering quality and service in goods while adding to its non-food ranges whilst exploring new ideas in loyalty cards, home shopping and banking. In contrast Sainsbury's strategy has chopped and changed so often that it would be a surprise if management, let alone shoppers, know what the company stands for any more.
The worry for Sainsbury's is that it is now embarking on a major corporate makeover that will take up a huge amount of management time whilst Tesco is just steamrollering on with no distractions. Tesco's management has already enjoyed the longest running winning streak in recent supermarket history, so perhaps Sainsbury's best hope is that somehow, somewhere the Tesco team will eventually slip up. At the moment, though, that doesn't look very likely.
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