Price is no longer a competitive advantage.
That was the bold claim made by Sainsbury's commercial director Mike Coupe as the retailer rolled out its Brand Match price-matching scheme across the UK this week.
Sainsbury's has promised to match Tesco and Asda on 13,000 branded items using a patented coupon scheme it has been trialling in Northern Ireland since August.
Sainsbury's shoppers who spend over £20 and buy at least one branded product will be given a voucher for the difference if the branded products in their basket were cheaper at Tesco or Asda.
The advent of the internet and price comparison websites meant it was inevitable this would happen in grocery, Coupe told delegates at this week's IGD Convention.
Rival companies and consumers operated in an environment of complete transparency, which Coupe suggested was "gradually eroding price as a competitive advantage".
Discussing the new Brand Match scheme, Coupe added: "Combined with the Sainsbury's level of quality, why shop anywhere else? You can clap if you want."
News of the roll-out prompted concern that Sainsbury's was taking on Tesco and Asda in a price war. But in an exclusive interview with The Grocer, Coupe argued Sainsbury's risked being left behind if it didn't enter the fray.
"It's a case of cause and effect," he said. "Tesco has a price promise, Asda has one. Even Waitrose and Ocado have them now."
The new scheme would "give direct assurance to customers" without hurting Sainsbury's profits, he added. "We wouldn't do it if we couldn't afford it."
Trials of the scheme in Northern Ireland had shown people "got" it, said Coupe. "After a week or two they really embraced it. They value the reassurance." While he refused to be drawn on the average voucher value in the trial, Coupe said around 60% of baskets had been cheaper than at Tesco or Asda. "That is the killer statistic."
He admitted Sainsbury's had taken a cautious approach, keen to avoid shoppers exploiting the scheme as happened with Tesco's Double the Difference promotion earlier this year. "We started examining this in January with a risk register, mitigating as we go," said Coupe.
"Capping the vouchers at £10 means a few rogues won't spoil it for the majority of people. Only 0.3% of vouchers were for over £10 anyway."
The Brand Match scheme will initially run until 31 December and was classed as "a promotion" by Coupe.
"Like any promotion, we are offering it for a period of time. In December we will reassess it. It is part of mitigating risk," he added.
That was the bold claim made by Sainsbury's commercial director Mike Coupe as the retailer rolled out its Brand Match price-matching scheme across the UK this week.
Sainsbury's has promised to match Tesco and Asda on 13,000 branded items using a patented coupon scheme it has been trialling in Northern Ireland since August.
Sainsbury's shoppers who spend over £20 and buy at least one branded product will be given a voucher for the difference if the branded products in their basket were cheaper at Tesco or Asda.
The advent of the internet and price comparison websites meant it was inevitable this would happen in grocery, Coupe told delegates at this week's IGD Convention.
Rival companies and consumers operated in an environment of complete transparency, which Coupe suggested was "gradually eroding price as a competitive advantage".
Discussing the new Brand Match scheme, Coupe added: "Combined with the Sainsbury's level of quality, why shop anywhere else? You can clap if you want."
News of the roll-out prompted concern that Sainsbury's was taking on Tesco and Asda in a price war. But in an exclusive interview with The Grocer, Coupe argued Sainsbury's risked being left behind if it didn't enter the fray.
"It's a case of cause and effect," he said. "Tesco has a price promise, Asda has one. Even Waitrose and Ocado have them now."
The new scheme would "give direct assurance to customers" without hurting Sainsbury's profits, he added. "We wouldn't do it if we couldn't afford it."
Trials of the scheme in Northern Ireland had shown people "got" it, said Coupe. "After a week or two they really embraced it. They value the reassurance." While he refused to be drawn on the average voucher value in the trial, Coupe said around 60% of baskets had been cheaper than at Tesco or Asda. "That is the killer statistic."
He admitted Sainsbury's had taken a cautious approach, keen to avoid shoppers exploiting the scheme as happened with Tesco's Double the Difference promotion earlier this year. "We started examining this in January with a risk register, mitigating as we go," said Coupe.
"Capping the vouchers at £10 means a few rogues won't spoil it for the majority of people. Only 0.3% of vouchers were for over £10 anyway."
The Brand Match scheme will initially run until 31 December and was classed as "a promotion" by Coupe.
"Like any promotion, we are offering it for a period of time. In December we will reassess it. It is part of mitigating risk," he added.
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