Following today’s news that Sainsbury’s will invest £500 million to tackle the cost-of-living crisis by increasing pay and price locking products until the end of the year; Nidhi Chauhan, senior food & grocery analyst at GlobalData, a leading data and analytics company, offers her view: “UK retailers are trying to keep up with discounters when it comes to proving value for money, while also outcompeting each other. Sainsbury’s price lock of over 1,800 items mirrors moves by other major British retailers such as Asda and Morrisons.
“Over the year, Sainsbury’s has rightly invested in its value range, including extending its ‘Aldi price match’ scheme to include 150 fresh products. This was essential in shifting consumer perceptions that the grocer is more expensive than rivals—especially now that money is tight. It’s especially startling to note that more than half (53%) of UK consumers responding to a GlobalData survey in Q1 2022 are concerned about their financial situation—the highest since the peak of the pandemic in 2020.
“Sainsbury’s has also invested in product quality and innovation, namely its Taste the Difference range. This will prove pivotal, as shoppers consider moving from branded goods to private label alternatives. GlobalData currently forecasts 6.3% UK grocery inflation in 2022, but this is likely to climb further as the ongoing conflict in Ukraine sends commodity prices soaring.
“Locking prices until March 2023 will help Sainsbury’s set itself apart from the pack, particularly as Asda’s price cut only lasts until the end of 2022. Simple and direct strategies will be most appreciated by shoppers and help to build trust with supermarkets looking to strengthen consumer loyalty.”