Warburtons left behind as Sainsbury's uses Hovis to differentiate c-stores
The retailer, which has big expansion plans for its 440-strong convenience estate, has delisted Warburtons bread from the majority of its Local stores in favour of arch-rival Hovis.
The move has already been noticed by shoppers, with one recently posting on the retailer’s Facebook wall “No Warburtons bread in your stores anymore. Won’t be using them anymore”.
Sainsbury’s responded to the complaint by stating: “We haven’t stopped selling Warburtons. Most main stores still stock this brand, although a good number of our smaller Local stores will be discontinuing to try out some other options.”
A spokesman confirmed: “Warburtons is still available in over 100 convenience stores and in all our supermarkets. In the stores we no longer sell Warburtons it has been replaced predominantly by Hovis, which is in our convenience stores for the first time.”
The move is a brave one for Sainsbury’s because Warburtons is the second-biggest brand in the UK behind Coca-Cola, with sales of £677.7m [Nielsen, MAT 24 December 2011]. It is also the biggest bread brand, with sales some £265.5m higher than Hovis.
But it is also a coup for Hovis owner Premier Foods, after several Hovis lines were temporarily from Tesco in 2010 and 2011 in pricing disputes. Only last month, Premier Foods revealed profits in its bread division slumped 90%, from £35.3m to £3.4m, in the year to 31 December 2011.
Although value sales of Hovis fell 6.5% in 2010, in 2011 they recovered to increase 1.1% to £412.2m, boosted by promotions and NPD. This week, it also launched a premium British Farmers loaf to push its 100% British wheat credentials.
Sainsbury’s move will also mean Warburtons will largely miss out on the supermarket’s rapid expansion in convenience. In the year to 17 March, it opened 73 stores, including 15 in the fourth quarter, during which Sainsbury’s said its convenience business grew ahead of the market at over 20%.
A Warburtons spokeswoman said: “Warburtons does not discuss confidential commercial agreements, however we continue to have a very good trading relationship with Sainsbury’s.”