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Sainsbury reaffirms faith in superstores

News, 16 March 2015

LONDON: The head of supermarket chain Sainsbury's expects that UK consumers will continue to shop in large stores for the foreseeable future, but with rivals announcing extensive store closures he also says there will have to be changes in the sector.

"There's a lot of stuff being written at the moment that the superstore is dead. My own view is that is a gross exaggeration," Mike Coupe said at Retail Week Live.

In ten years' time he anticipated that most people, most of the time would still be shopping in large out-of-town superstores.

But, he added, "there is no absolutely no doubt they will have to change" in terms of what they offer.

His solution is "to put more goods and services into our out-of-town stores and turn them into shopping destinations". Coupe also offered click-and-collect services and the further development of Sainsbury's clothing brand as examples of ways in which he would achieve that

The so-called Big Four in the UK – Sainsbury's, Tesco, Morrisons and Asda – have been coming under greater pressure from discounters such as Aldi and Lidl, and Coupe admitted that he couldn't win a price war.

"What we can win on is range, we can win on service, we can win on having an easier shopping experience, we can win on the quality of the products that we sell," he asserted.

The discounter effect was evident as Morrisons has just posted a pre-tax loss of £792m for its most recent financial year and announced it would be shutting 23 stores.

At the start of the year Tesco also reported disappointing results and said it would be closing 43 stores.

And while Sainsbury has not said it is closing stores, towards the end of last year Coupe revealed that a quarter of them were failing and he also postponed 40 planned store openings.

He told the Retail Week Live audience that excess space was not confined to the grocery sector and he expected "a shakedown in retail space more generally" and that some high streets would "disappear".

Data sourced from Retail Week, Telegraph, BBC, Independent; additional content by Warc staff