In our previous article, we had done a SWOT Analysis of Asda. In this article, we are going to do a detailed SWOT analysis of Sainsbury’s, one of the largest chains of supermarkets in the United Kingdom.
Sainsbury’s, a retail brand has been in this business since the mid-1800s with interests in grocery retailing and retail banking. Being a part of business in retail, the company operates a chain of supermarkets and convenience stores.
In addition to this, this company also manages domains such as property investments and financial services. They provide high-quality meals at the lowest cost possible wherever and whenever their client requires it. Marketing plays a very important role in the growth of a company. As the world is shifting its approach to digital, digital marketing has made its place, and what better place to learn digital marketing than IIDE.
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Before we dive into the SWOT analysis of Sainsbury’s, let’s have a look at the firm, its history, financial situation, products, and competitors.
Sainsbury’s plc which people know as Sainsbury’s is the third-largest supermarket chain in the UK. This business was started by John James Sainsbury along with his wife Mary Ann in the year 1869. It started as a fresh food retailer and with time expanded into packaged food items.
In the year 1922, J Sainsbury was incorporated as a private company known as ‘J. Sainsbury Limited’. The company went public in the year 1973 and till then the company was completely owned by the Sainsbury family.
Between the years 1992-1998, Sainsbury’s had to undergo a downfall. The brand was relaunched in the year 1999 and from the year 2004 to 2006, they made sure to bring Sainsbury’s back to its place.
They not only tried to make it like before but grew it even more. Today, after going through so many ups and downs, the J Sainsbury’s plc is split into three divisions: Sainsbury’s Supermarkets Ltd (including convenience shops), Sainsbury’s Bank, and Argos with over 600 supermarkets and 800 convenience stores.
|Founder||John James Sainsbury|
|Origin||London, England & United Kingdom|
|No. of Employees||180,000+|
|Market Cap||£6.782 Billion (2021)|
|Annual Revenue||£29.048 Billion (2021)|
|Net Income/ Profit||£280 Million (2021)|
Products by Sainsbury’s
The products that we can find at Sainsbury’s are:
- Sainsbury’s Groceries
- Food to order
- Sainsbury’s Bank
- Sainsbury’s Energy
Competitors of Sainsbury’s
Sainsbury’s is leading the grocery market in the UK. However, there are a lot of big retailers aiming for their position. The competitors are –
- Aldi UK
- Associated British Foods
Now that we are familiar with how the company’s history and it’s working, let’s dive right into the SWOT Analysis of Sainsbury’s.
SWOT Analysis of Sainsbury’s
SWOT Analysis of Sainsbury’s is a basic method that can help a company examine what it does best right now and develop a successful future strategy. It exposes the areas where people are holding back or how competitors may profit.
With the growing neck-and-neck rivalry in membership warehouses, it is critical for organizations like Sainsbury’s to examine the business environment.
To better understand the SWOT analysis of Sainsbury’s, refer to the infographic below:
Now first let’s begin with the strengths of the company from the SWOT analysis of Sainsbury’s.
Strengths of Sainsbury’s
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Sainsbury’s:
- A Listed Company: Sainsbury’s is listed under the constituents of the London Stock Exchange. Being a public company listed on the stock exchange, people can easily buy their shares and trade as and when they want.
- Great Customer Feedbacks: The company has been able to attract a lot of customers and managed to hold them back because of its high-quality products and customer relationship management. These customers leave behind great feedback resulting in high customer satisfaction.
- Unique Strategies for Promotion: The strategies adopted by the company are innovative and can directly be pitted against the competitors. One of the strategies is Brand Match that is to pit each product sold by the brand with other brands which are its competitors like Aldi and Tesco. This comparison proves that their products are cheaper and of better quality.
- Social Media & Online Presence: Sainsbury’s maintains healthy contacts with their customers on social media sites as well they ask for frequent feedback from them. They have plenty of brand acquisitions.
Bonus Tip: Developing engagement marketing using social media & online reputation management is one of the biggest reasons Sainsbury’s is climbing the stairs to success. Without maintaining healthy relations with customers a business can never become a brand. So, it is important to learn these powerful digital marketing skills if you want your business to achieve global success in your industry.
- Provides Every Segment Products: Sainsbury’s, a retail store provides value products for the economy segment and branded and expensive products as well as special products for the upper-class segment.
Weaknesses of Sainsbury’s
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Sainsbury’s are
- Fewer Margins: Not only is there a lot of competition but also the risk of online retailers which led to most retailers losing their volumes. As there is so much competition, Sainsbury’s is reducing the margin by keeping the prices lower to attract customers.
- Increase in Prices: The pandemic has caused economic uncertainty and also resulted in a shortage of supplies. The company had to increase the prices due to cost increments. As a result, the sale prices dropped to a great extent.
- Switching Brands: Usually, retail brands face a lot of risks from brand switching. String loyalty programs and promotions are held but still, Sainsbury’s finds it difficult to retain customers.
- Expensive for Some Customers: Likewise, it isn’t as inexpensive as discounters which include Aldi. This is now no longer convincing for lots of customers.
- Financial Instability: Sainsbury’s is facing huge financial losses for the past 2 years which results in decreasing annual revenue and net profit as compared to the year 2020.
Opportunities for Sainsbury’s
Sainsbury’s is one of the largest best supermarkets. Therefore they might have many opportunities approaching them that could give them a chance to capitalize to increase their returns.
- 24*7 Service: Self-checkouts automated technology should be introduced as Sainsbury’s has to serve the customers 24*7. This process would increase sales by making the process easier and more efficient.
- Latest Trends: Sainsbury’s has successfully established a very large network in the UK. It witnesses an amazing opportunity for the company to develop an extra profit and new income streams and also diversify into new product variants. Now, the company should also expand its business in other countries, being the world’s largest consumer market with full potential and opportunities.
- Growth in Villages: Years back, rural areas did not use branded products. Today, even village areas have categorized branded products as must-haves. This gives the retailers an opportunity for expansion.
- Global Expansion: Going beyond the UK for opportunities is worth the effort! Although Sainsbury’s attempt to merge with Asda was blocked by the CMA (The Competition and Markets Authority), it is ready for other experiences too.
- Economical Shift: There’s an economic uplift and customer prevalence within the company. More and more audiences have shifted their preferences to Sainsbury’s’s servicing. Sainsbury’s also converted their 5 to 6 focus DIY stores into convenient supermarkets.
Threats to Sainsbury’s
Sainsbury’s also has some threats on their business from the outside. It is very important to anticipate them before one becomes a victim to them.
- Covid19 Pandemic: In the year 2020, the Covid19 pandemic and the worldwide lockdown took place and led to the closing of many of Sainsbury’s stores across the UK because of which the annual revenue and the net income of the company dropped by 3.2% and 32.78%. After the pandemic, the period of economic recession started and the purchasing power of common people declined.
- Globalization: The world is moving forward due to technological development. Many companies are by expanding their market to become global multinational brands. As the laws and regulations of countries are different from one another, it’s a great threat to the company in legal and expansion terms.
- Competitors: Companies giving neck-to-neck competition to Sainsbury’s and competitors developing new technologies are genuine threats to the company. Sainsbury’s offers a variety of products in various categories. However, the niche-focused competitors in the different categories give tough competition and they attract a major share of the market demand.
- Controversies: Sainsbury’s has been caught in several controversies such as dairy price-fixing, VAT avoiding scheme, environmental and ethical issues etc. and many more. Continuation of such controversies will no longer take Sainsbury’s to dilute in the market.
- Rules & Regulations: The legal standards and new set of rules have created a major setback for Sainsbury’s, change in regulatory frameworks and introducing regulations to the organizations may have been a drawback for the company. Liability laws in different states must have created a threat to the product services of Sainsbury’s as per some policies of the countries.
This ends our extensive SWOT analysis of Sainsbury’s. Let us conclude our learning below.
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 utilize social media to create a more focused and active consumer channel 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.
With a huge increase in the service industry. There is a very high competition where marketing plays a crucial role-taking advantage of technology, not merely in this industry in which every other company is focusing on digital marketing to rise ahead of each other. If you too are interested in learning advanced digital marketing strategies, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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