Justin King has proclaimed Sainsbury’s £10m rebranding as an earthshaking event. Some are not so sure. Rachel Barnes reports

Clearly, Sainsbury needs to maintain its momentum of recent months, with like-for-like growth in its past two quarters.

For anyone with a keen eye on their diary, it was pretty obvious that this week’s business pages would be dominated by one story: Tesco’s half-year results. And it didn’t disappoint, with group pre-tax profit up 18.7% to £908m on a 14.1% increase in sales to £18.8bn - all against the backdrop of dismal trading periods for the majority of high-street big hitters.
But that prospect didn’t stop Sainsbury trying to generate some positive publicity of its own by taking the opportunity the day before Tesco’s results to announce its £10m rebranding exercise.
Chief executive Justin King unveiled a new slogan, ‘Try Something New Today’, a new-look ad campaign featuring Jamie Oliver and a raft of new customer-focused company practices. King claimed the “cultural change” campaign was of greater significance to the company than anything else that had gone before (we’ll leave aside its flotation in 1973 and last year’s 97.5% crash in profit).
But opinions are divided over the timing of the announcement -- and whether the campaign is as important as King suggests. “The timing is curious,” says Clive Black, retail analyst at Shore Capital. “Launching it the day before Tesco’s results could have meant Sainsbury’s news was drowned by Tesco’s news. However, it could be quite clever in that it may help the Tesco backlash in some way. Bored with Tesco? Then why not try something different.”
Sainsbury customer director Gwyn Burr, insists that the clash of dates was purely coincidental. “We had to book our
conference room for the launch event for 1,200 people six months ago. The timing was in no way related to Tesco,” she says.
However, she concedes that for lapsed Sainsbury shoppers and those who currently shop elsewhere, the ads will have a somewhat different impact. “Yes, there’s clearly a proposition to come back into our stores. We’ve done a huge amount on availability and our stores are very different.”
This is the message that King has been spreading to customers and staff alike. He says: “Now is the time to ask people to come into our stores and try some of the many new and improved products we have introduced in recent months, with better customer service and availability and a much more competitive pricing position.
“We still have a lot to do behind the scenes, but customers are now enjoying a much-improved in-store experience.”
The Grocer’s research backs up King’s assertion. As we reported only last week, Sainsbury had the cheapest basket between August 20 and September 17 in The Grocer 33, while The Grocer 100 survey shows that its prices have been tracking downwards since King arrived. More than that, in-store availability has clearly been improving recently and Sainsbury is one of the best performers when it comes to our weekly Top Store award.
As part of King’s new drive, 1,000 managers from stores and central teams, including the board, will be sent on two-day training courses to “change the way they lead the business”, while every member of store staff will receive new customer service training by the end of October. “We believe this is the biggest commitment a Sainsbury’s board has made to align every colleague behind a single aim,” says King.
The Sainsbury boss admits that the advertising is merely the tip of the iceberg. Nevertheless, this week’s fanfare surrounding the launch has drawn criticism from the City.
Rhys Williams, an analyst at Seymour Pierce, questions the significance of the slogan. He says: “If you did some market research, the majority of the public wouldn’t have a clue about straplines. There are so many out there, so what impact can they have? This is a non-event for Sainsbury.”
Shore’s Black has a more positive view: “Overall it has to be seen as a welcome initiative. Making Life Taste Better was lamentable. Sainsbury has been held back from being more adventurous in its marketing, but if availability is now cured, then it can be more proactive in bringing in the punters - although it can’t let them down a second time.”
However, his optimism is qualified with a word of warning: “New plastic bags and billboards are only skin deep; more radical things are needed to sustain market share and grow. If these changes aren’t real, then Sainsbury will be found out very quickly.”
And there’s already early dissent from one ‘life-long Sainsbury customer’, who wrote to The Grocer this week, saying: “Given their supply problems, surely they would have realised that it would invite jokes such as ‘Try something different because we haven’t got what you want’. I have been trying different things for years because the items I wanted weren’t available. It makes me feel cross rather than adventurous.”
Early gripes aside, the jury is out on whether the campaign will actually work.
Even Burr admits that the campaign is a bold step. “This has a more intimate and humorous aspect to it than we’ve previously had. We’ll do extensive research to find out what’s popular.”
It’s debatable how much market share Sainsbury can steal back from Tesco, but the new initiatives could help in the battle with Morrisons and, particularly, Asda.
“While Tesco is steaming ahead on its own, there will continue to be a certain amount of shifting of the balance between Sainsbury and Asda,” says Gavin Rothwell, senior retail analyst at Verdict Research.
“Sainsbury has made a lot of positive progress in the past year and continues to, but Asda has clearly stalled. We’ll be watching with interest to see what difference the addition of David Cheesewright, the new Asda chief operating officer, makes.”
As for Sainsbury, King will be hoping the new campaign does for it a fraction of what Every Little Helps has done for Tesco.