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

Quick Stats on Sainsbury’s

Founder	John James Sainsbury
Year Founded	1869
Origin	London, England & United Kingdom
No. of Employees	180,000+
Company Type	Public
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
• Argos
• Sainsbury’s Energy

What’s new with Sainsbury’s

check out some current news about Sainsbury’s:

• Greggs has opened its first standalone café within a Sainsbury’s store, as the two businesses accelerate their property partnership.
• Sainsbury’s launches bridal collection with £22 Tu wedding dress.
• Sainsbury Hiring 22000 Temporary Staff for Christmas Sales Push.

Buyer Persona of Sainsbury’s

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 which 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 has resulted 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-checkout 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 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 COVID-19 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 schemes, 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.

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 –

• Tesco: Tesco is one of the largest and most well-known retail supermarket chains in the United Kingdom, offering a wide range of groceries, household items, and various other products.
• Aldi UK: Aldi is a rapidly expanding discount supermarket chain in the UK known for its affordable prices, limited product selection, and a focus on own-brand products.
• Morrisons: Morrisons is a British supermarket chain that provides groceries, fresh food, and a growing emphasis on online and home delivery services.
• Associated British Foods: Associated British Foods is a diversified multinational company with interests in food, ingredients, retail, and agriculture, owning brands like Primark and producing food products under various labels, such as Kingsmill and Twinings.

Example of a Campaign that faced viewer’s Backlash

what was the issue?

One campaign that faced backlash from viewers was Sainsbury’s 2016 Christmas ad featuring a heartwarming story set in the trenches of World War I, which some felt exploited the theme of war for commercial gain, sparking controversy and criticism.

How did they respond to this?

This ends our extensive SWOT analysis of Sainsbury’s. Let us conclude our learning below.