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Extensive SWOT Analysis of Sainsbury’s – UK’s Top Supermarket

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In our previous case study we looked into the Business Model of Tesco, a leading multinational grocery market. In this article, we will tackle the SWOT Analysis of Sainsbury’s.

Sainsbury’s is one of the major supermarkets in the United Kingdom, having been in business since the mid-1800s. Their brand has a long history of quality, variety, and innovation, all while decreasing prices and providing more consistent value. They provide high-quality, low-cost meals wherever and whenever clients want them.

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Before we go into the SWOT Analysis of Sainsbury’s, let’s have a look at the firm, its history, financial situation, products, and rivals.

 

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About Sainsbury’s

 

Sainsbury plc, famously known as Sainsbury’s, stands as the United Kingdoms’ second-largest supermarket chain. When John J. Sainsbury and his wife Mary Ann launched a business in London in the mid-nineteenth century, they formed a partnership and began as a fresh food merchant before branching out into packaged goods like tea and sugar. 

Sainsbury's FIrst few outlets - SWOT Analysis of Sainsbury | IIDE

Sainsbury’s Supermarkets Ltd (including convenience stores), Sainsbury’s Bank, and Argos are the three divisions of J Sainsbury plc, the holding company. In the United Kingdom, there are over 440 Sainsbury’s stores, the largest of which has more than 23,000 goods, with Sainsbury’s branding on 40% of the items.

 

Quick Stats on Sainsbury
Founder John James Sainsbury
Year Founded 1869
Origin London, England, United Kingdom
No. of Employees 111,900
Company Type Public
Market Cap £7.18 Billion (2021)
Annual Revenue £28.993 Billion (2020)
Net Profit £152 Million (2020)

 

Products by Sainsbury’s

Following are the products we can find at Sainsbury’s –

  • Hypermarket/Superstore 
  • Supermarket 
  • Convenience shop 
  • Forecourt shop

 

Competitors of Sainsbury’s

Sainsbury’s is leading the grocery market in the UK, however, they aren’t the only standing big retailers –

  • Tesco 
  • Aldi UK 
  • Morrisons
  • Associated British Foods

 

Now that we are familiar with the workings and start of the company, without further ado, let’s dive straight into the SWOT Analysis of Sainsbury’s.

 

 

SWOT Analysis of Sainsbury’s

 

Here is an In-depth SWOT Analysis of Sainsbury’s to study the different factors that define the success of this firm currently and the factors that would be a change-maker for the company in the future. 

 

1. Strengths of Sainsbury’s

Sainsbury’s strengths support the company to capture and retain its market share as well as the reputation and improve even further.

 

  • Own Label Products – Out of 30,000+ product lines in various categories, Sainsbury’s sells only 20% of the products under its label. The investors trust the company because of the openness in the Stock Market.
  • Highly Skilled Workforce – With the help of successful training and learning programs the company has successfully built a highly skilled workforce at present. Sainsbury’s investments in the training and development of its workforce help the company to acquire and retain a workforce that is not only highly skilled but also motivated enough to achieve better results.
  • Customer Satisfaction – The company has been able to achieve a high level of customer satisfaction with its committed and steadfast customer relationship management department, among present customers, and good brand equity among the potential customers.
  • Listed Company Status Sainsbury’s is a listed company under the constituents of the London Stock Exchange. This makes it possible for the public to easily and freely trade the stock and shares of the company on the stock exchange.

 

 

2. Weaknesses of Sainsbury’s

Weakness is the area where Sainsbury’s can work and improve upon. Strategy is about making choices and weaknesses are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning over the other competitors.

 

  • High Attrition rate in the Workforce – Sainsbury’s if compared to other organizations in the industry it has a higher attrition rate. it has to spend a lot more as compared to its competitors on the training and development of its employees.
  • Increasing Prices – The pandemic of covid-19 has caused an atmosphere of economic uncertainty and also a shortage of supplies. This led to an increment in cost, therefore the company had no choice but to increase the prices. Resultantly the sale dropped to a great extent.
  • Limited success outside core business – Even after being one of the leading organizations in its industry, Sainsbury’s still has faced many challenges in moving to other product segments with its present culture.

 

3. Opportunities for Sainsbury’s

Sainsbury’s being one of the largest companies on its brand might have some favourable external actors that could give them a competitive advantage.

 

  • 24 hours Service – Sainsbury’s, to serve customers 24 hours a day and 7 days a week, must introduce the self-checkouts automated technology. Most importantly, it would increase the overall sales by making the process more efficient.
  • New trends – New trends in the consumer behaviour can open up a new market for Sainsbury’s. As we know, Sainsbury’s has successfully established a very large network in the UK. It witnesses an amazing opportunity for the organization to develop a new profit and income streams and also diversify into new product variants. Now, the company must also expand its business in the African and Asian countries, being the world’s largest consumer market with full potential and opportunities.
  • Digital Patrons Channel – The company has invested a quality sum of money into the digital platform and successfully has introduced a new sales channel for Sainsbury’s. In the coming years, the company can grasp this opportunity by evaluating its customers better and serving their needs using big data analytics.

 

Sainsbury's Outlets - SWOT Analysis of Sainsbury | IIDE

 

4. Threats to Sainsbury’s

Sainsbury’s also has some negative effects on their business from the outside. It is very important to anticipate them before you become a victim of them and growth stalls.

 

  • Pandemic – The Covid19 Pandemic and the worldwide lockdown have ended many of Sainsbury’s stores across the UK because of which the annual revenue and the net income of the company have dropped by 3.2% and 32.78%. The period of economic recession had started after the pandemic and declined the purchasing power of common people.
  • Globalization – Due to technological development, the world has become a global village. Many businesses and companies are expanding their market becoming Global Multinational brands. The laws and regulations of various countries vary, therefore, it presents a great threat to the company in terms of expansion and legality.
  • Competitors – New technologies developed by the contender or market troublemaker could be a genuine threat to the industry in the future. Sainsbury’s offers a variety of products in different categories. However, it is facing various competitors in the different categories that are niche-focused. The competitors who target niches, attract a major share of the market demand.

 

This SWOT Analysis of Sainsbury’s helped break down the organisation’s work, potential risk factors and the advantageous factors that lead to its success. With this, we come to an end to this detailed case study. 

 

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Conclusion

 

Sainsbury’s is a leading chain in the UK, and it is performing great in the market. Sainsbury’s might strengthen its strategic posture and planning. They may undoubtedly utilise social media to create a more focused and active consumer channel in order to attract new customers. Unfortunately, the pandemic caused a lot of repercussions and complicated challenges with their operations and supply chain management during the epidemic.

Sainsbury’s will gain not only from the cost-effectiveness of digital marketing, but they will also reach a larger audience than normal if they raise their presence through many channels such as SEO, emailing, content marketing, and social media marketing. 

Learning the fundamentals of digital marketing and completing Certified Courses might lead to opportunities to work with big retailers like Sainsbury. 

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Check out our IIDE Knowledge portal for more great case studies if you love in-depth company studies. 

Thank you for taking the time to read our case study on the SWOT Analysis of Sainbury, and please leave your thoughts on the case study in the comments section below.

 

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