Sainsbury's: Do its shoppers want values or value?

The grocer is promising only "fair" prices as its blushes were saved by Argos

Sainsbury's boss Mike Coupe (Reuters)

“Our values make us different,” Sainsbury’s trumpeted at the end of the latest trading statement, above a section devoted to its “Waste less, Save more” initiative and a new bakery college in Bromley-By-Bow.

But do shoppers really care enough about that to pay a bit more? Sainsbury’s seems to think they will. Hence the grocer touting “great products and services at fair prices” with the emphasis on “fair” as opposed to “market leading”.

The evidence, for now, is mixed. Sainsbury’s latest trading statement showed that sales fell by 0.5 per cent during the 11 weeks to 11 March.

While that counts as a disappointment, it’s nothing to get bent out of shape over. The company pointed out that Mother’s Day and Easter were late this year. Had they fallen at the same time, it would have been able to report a (very) modest rise.

It didn’t need to make a big fuss about that because of Argos, picked up off the sale rail for £1.4bn last year, which chalked up a handy 3.8 per cent rise. Combined, the two turned in a 0.3 per cent sales increase.

No wonder Sainsbury’s plans to have 250 Argos outlets in Sainsbury’s stores within three years. They might yet prove to be a rather better draw for the grocer than its “fair prices” if it can get the business singing.

That would involve getting to a place where customers are not told that product X found on the web site isn’t available online, but can be accessed after a 300 mile drive up to the Bolton branch. Note to CEO Mike Coupe: Amazon doesn’t do that.

But these are still early days.

The worry about the Argos acquisition was that it would result in Mr Coupe’s team taking their eyes off the ball in the midst of a supermarket price war.

Set against an improving Tesco and the remarkable resurgence of Morrisons, these numbers could be worse. There are no serious signs of that happening and Sainsbury’s is just about holding its own, while proving the sceptics (including me at first) wrong about Argos.

But Mr Coupe needs to have a care. Aldi and Lidl aren’t going anywhere and the recent supportive comments from Walmart boss Doug McMillion about the still struggling Asda suggest that he plans to stick around and tough out the struggles of his UK business.

You get the impression, talking to Sainsbury’s bosses, that they really want to believe in that stuff about “values” even it sometimes seems like a rather woolly way to justify higher prices (a warning has been issued about the impact of Brexit). Oh, and, erm, best not talk about the chairman getting a warning for using staff to help refurbish his home.

The thing is, I’m not sure how far “values” will take Sainsbury’s when it’s value that shoppers are really after.