24 July 2000

Ailing supermarket giant J Sainsbury, predicted to post lacklustre trading results for its first fiscal quarter, has hired a firm of spin doctors to gloss its reputation for value – without actually cutting prices.

Mercer Management Consulting has been briefed by Sainsbury marketing director Sara Weller to establish how shoppers define value, and what the supermarket should do to favourably influence customer perceptions.

According to a memo to MMC from Ms Weller, the firm is charged with generating ideas as to how Sainsbury can harness communications techniques to "create valued alternative solutions to driving price perception" – or in plain English – avoid price-cutting.

The four-month assignment will also look at the potential for differential pricing at individual Sainsbury outlets, according to geographic location and store format. The results will trigger a marketing campaign to be launched in November.

Analysts, as ever, were unimpressed, questioning what the MMC study could discover that had not been established by research it conducted for Sainsbury eighteen months previously. Carped one analyst: "Sainsbury prices are still nine per cent out of line with Asda today. Most people will not fall for this new campaign ... because the whole basket spend won't have changed."

News source: Financial Times