Sainsbury’s plans 30m investment to catch Tesco

SUPERMARKET group J Sainsbury is to invest 30m during 1999/2000 in activities targeted at driving top line growth and maximising the group’s profit potential. Investment in the chain’s corporate identity and store environments is expected to form a sizeable part of the expenditure.

Sainsbury’s market share fell from 12.7 per cent to 12.6 per cent from December 1997 to June 1998.

J Sainsbury’s quarterly results were published last week, and showed performance “below our internal expectations and external targets”, according to group chief executive Dino Adriano. The chain is losing ground to rival, Tesco, which claims its market share rose from 15.2 per cent to 15.8 per cent between December 1997 and June 1998.

“The level of Sales growth at Sainsbury’s is not acceptable… clear and decisive action is being taken to increase the rate of sales growth,” adds Adriano.

A company spokesman refuses to specify the exact nature of the changes. “This summer we will introduce vigorous and determined ways to change the culture of the organisation and help with performance,” he explains.

Retail design and strategy specialist 20/20 was employed in autumn 1997 to create the new identity, but sources close to Sainsbury’s say proposals for interiors have been met with opposition.

Tesco added to Sainsbury’s crisis with news that its own market share has risen from 14.9 per cent to 15.6 per cent between June 1997 and June 1998, according to independent figures from the Institute of Grocery Distribution.