British Retailer Sainsbury's: On the Road to Recovery


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Case Details:

Case Code : BSTR302
Case Length : 26 Pages
Period : 1995-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Sainsbury's
Industry : Retail
Countries : UK

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

By successfully striking a balance between making the supermarket appeal to consumers through its promotion of quality, price, and ethical provenance - its entire own-brand banana, sugar, and tea offering has been converted to fairtrade - and producing sales figures that have impressed the City, King has more than proved that his strategy was right," the magazine said (Refer to Exhibit I for Top 15 Marketers in 'The Marketing's Power 100 - 2008').

Analysts felt that King was instrumental in turning around the fortunes of Sainsbury's and reversing the decline that the company had suffered in the UK retail market between 1995 and 2008.

Sainsbury's, which was started in 1869, was the leading retailer in the UK till the early 1990s.

In 1995, Tesco plc (Tesco)7 overtook it to become the leading retailer of the country. Analysts were of the view that Sainsbury's ignored the growing clout of Tesco as its sales were growing (Refer to Exhibit II for Financial Performance of Sainsbury's between 1996-2000).

In early 2000, Sir Peter Davis (Davis) was brought in as the CEO to help the company recover market share. He invested heavily in several initiatives to revive the company's share, but these did not prove successful. Sales started to decline slowly after 2002 and in 2003, Sainsbury's was pushed to the third position by the Asda Group plc (Asda)8...

Excerpts >>

7] Tesco was the largest retailer (in terms of sales and market share) in the UK and the fourth largest in the world, as of 2008. It was founded in 1919 by Jack Cohen in London as small grocery stall. However, its first store opened only in 1929. It housed a wide range of products. For the financial year ending February 23, 2008), revenue was at £ 47,298 million and profit was £ 2,803 million.
8] Asda was the second largest supermarket chain in the UK, as of 2008. It was founded in 1949 in Leeds, the UK. In 1999, it became a wholly-owned subsidiary of the world's largest retail chains Wal-Mart Stores, Inc. As of 2008, there were 351 stores under Asda. For the financial year ending January 31, 2008, the net sales at Asda were US$33.4 billion.

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