GREAT BRITISH BRANDS: Sainsbury's - the Firm That Brought Supermarkets to Britain Has Faced Stiff Competition and Lower Profits, but Things Are Looking Up
With supermarkets now an integral part of modern life, it's not surprising that Sainsbury's is one of the biggest of all British brands.
After all, it invented the modern supermarket, opening the UK's first self-service store in Croydon in 1950.
It was a revolutionary concept at the time because post-war consumers were still stuck in their pre-war ways, used to personal service in specialist stores. The idea of pushing a trolley around was alien to them, as was the freedom to choose between brands. With food rationing only lifted in 1954, people were simply not used to behaving like 'consumers'. That changed in the 1950s and Sainsbury's introduction of supermarkets was an important factor in the process.
Sainsbury's began in 1899, when John James and Mary Ann Sainsbury opened a shop selling milk, butter and eggs in Drury Lane, London. The firm remained a family business until flotation in 1973, by which time Sainsbury's was the UK's leading supermarket chain, with more than 250 stores. It was also at the forefront of another significant retail trend as it opened its first out-of-town stores.
In the early 1970s, it was also one of the first British supermarkets to develop own-label lines. By 1980,many of the packaged goods brand owners featured in these pages were beginning to feel the heat from this successful strategy as Sainsbury's revealed that nearly half its customers bought own-label goods. Now 55% of Sainsbury's sales are own-brand products such as Be Good to Yourself.
By the late 1980s, Sainsbury's was on a roll and its profits were at an all-time high, increasing 20% per year between 1987 and 1992.
Offering the best quality at the best value is a core brand value Sainsbury's has carefully built for years. It first coined its famous 'Good Food Costs Less' slogan in 1959. Its advertising has consistently reinforced this message, including its 1993 'Famous Recipes' campaign, in which celebrities were shown making their favourite dishes from Sainsbury's ingredients.
Dawn French, Selina Scott, Catherine Zeta-Jones and Dennis Healey were among the famous names recruited and the campaign proved so successful that Sainsbury's often sold out of items features in the ads the next day. Despite the success of its ads, Sainsbury's commanding lead, and its profitability, began to slip away in the early 1990s as Tesco gained ground.
Its response to the Tesco onslaught was chaotic, with David Sainsbury famously dismissing his rival's 1995 launch of a customer loyalty scheme as 'electronic green shield stamps'. …