Latest Asda figures show weaknesses in sales and customer services

Poor results demonstrate yet again that supermarkets must provide better service or risk losing more business

 Asda’s latest quarterly figures are out, showing a 5.8% fall in sales at established stores in the 13 weeks to the 1st January. Morrisons, Sainsbury’s and Tesco supermarkets, by comparison, all showed better than expected financial figures for Christmas trading, and discounters Lidl and Aldi taking on a substantial share of the sales (nearly one million more customers than last year). What is next for the supermarkets?

Helen Dewdney, The Complaining Cow – consumer blogger and author of How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results! – says that as customers shopping habits are changing. As we become more savvy about discounts, service, consumer rights and comparison websites, supermarkets will have to up their game. “Customers don’t have trust in supermarkets and this needs to be worked on”, she advises.

Pricing – Consumers want consistent pricing. It even led to the Which? super complaint. The consumer’s voice is getting stronger and supermarkets will have to start listening. If one supermarket shows a lead, then they will win over many a customer so widespread is the complaint.

2) Something more? – Supermarkets need to offer something over and above price. Price wars will have to end eventually. Rewards etc., will become more important as will service. Tesco leads the way in the clubcard points offering the most per pound and variety of how to spend them. In comparison Sainsbury’s reduced their points value in April last year with fewer choices to spend them on.

3) Price matching – most customers don’t know how it all works, who matches what and what the rules are. Did you know that you had to have 10 branded items in the Tesco brand match scheme before it comes it comes into play?  Fair play to Tesco for taking it off at the till but its rules are not completely transparent. Consumers want to know that they are getting value for money and price matching is only one way of showing this.

4) Listening – Supermarket CEOs will have to listen to customers more. For example, Mike Coupe at Sainsbury’s shows signs of following Clarke’s leadership and downfall at Tesco. Last year when Sainsbury’s announced the decrease in nectar points per pound it said it would be making better and bigger offers, with more included in their double-up voucher scheme at Christmas. In reality the double up points scheme was limited to £20 per department with confusion around Christmas gifts and food. £20 limit on toys for a family of 4 isn’t very helpful either! It happened again in 2015. In contrast in 2014 Tesco simplified the doubling-up process so customers could spend across departments with no limit.

5) Discounters – Consumers are flocking to the discounters, which do not offer the same range as other supermarkets, so people will not completely stop using larger ones and discounters may need to look at more expansion of stock.

6) Savings – People are looking to save time as well as money and supermarkets will need to look at ways to make it easier and quicker for shoppers to use their stores. Tesco recently changed their minimum spend for click and collect from £20 – £40 but Sainsbury’s has, so far, kept at £20 and Asda’s is free. It remains to be seen if the discounters will provide click and collect and deliveries which would bring more competition to the table and whether Asda will bring its collections in line with others.

7) Waste – Consumers are becoming more aware of waste and how supermarkets treat suppliers. The BBC documentary War on Waste showed a farmer destroying crops it said Morrisons would not accept plus cancelled orders etc. Dewdney’s research of the issue[1] found that actually some supermarkets are doing really well in reducing waste. She also uncovered the other side of the story from Morrisons regarding a number of issues which was not shown. Supermarkets need to do more in informing consumers of what they are doing or customers will come to their own conclusions.

8) Advertising – Supermarkets should review their advertising campaigns. Sainsbury’s did well this year but Tesco’s campaign has brought much criticism, from sexism, to unrealistic and disbelief in characters. [2] Advertising on this scale doesn’t bring in the extra revenue to pay for it, so supermarkets need to win customers round in more engaging and innovative ways.

9) Customer Service – Supermarkets will have to improve customer service. Marcus Williamson – editor of the website ceoemail.com – says that searches for the email addresses of supermarket CEOs are very high. Figures for the last quarter were:

Store         Percentage  Market share            Expected ranking 

Asda                    50.48%                           16.7%                  Tesco

Sainsbury           21.75%                            16.2%                  Asda

Tesco                  16.75%                             28.2%                 Sainsbury’s

Morrisons           5.75%                              10.7%                 Morrisons

ALDI                    2.74%                              5.6%                  Aldi

LIDL                     2.53%                             4.3%                  Lidl

Williamson cautions that Asda clearly needs to work on customer service and complaints policies and procedures.

Contact for media enquiries
Email: helen@thecomplainingcow.co.uk
Website: //www.thecomplainingcow.co.uk
Book: How to Complain: the Essential Consumer Guide to Getting Refunds, Redress and Results! (ISBN: 978-0993070402)

CEO email website: CEOemail.com

References
[1] Research available on request
[2] Tesco takes flak in the battle of the Christmas adverts http://ow.ly/YuqRk

 

12/03/2015 Morrisons figures

 

 

Are you supermarket loyal?

This post is from 2015!

Supermarkets falling profits

There has been much discussion by retail analysts as to the reasons for profits of the supermarkets falling. Is it because the supermarkets have diversified too much and have forgotten what made them successful? Which companies have the best sited stores? It is probably a combination of many things. The public using more convenience stores and dropping the weekly shop and the irony of the likes of Tesco and Sainsburys developing these smaller stores in the first place?  The price wars between the big four and Lidl/Aldi. Are people doing a weekly shop for non-perishables and buying what they want to eat that evening on the way home from work?  Who understands the price matching thing anyway? Is it a Tesco finest pie versus a Sainsbury’s taste the difference pie? Is it Sainsbury’s taste the difference tomato versus Asda’s tomato? Then you have the all the confusing prices that annoy everyone. Which? has a petition you can sign regarding that one!

Loyalty cards

From 11th April Sainsbury’s reduce their loyalty points on their Nectar card. Sainsbury’s nectar turns sour. This move from Sainsburys may save them money in the short term but in the long term customers are less loyal than they ever were and we often know that companies frequently reward new customers and not existing customers and this is a very good example of that. All the loyalty cards have their confusions don’t they? X for purchases in stores, y on the credit card, z in other stores and they should be simplified!

At Christmas Sainsbury’s provided a “double up points” scheme that was limited to £20 per department and many staff didn’t even know what was in and what was out of the offer. (I know this because I experienced it and I vaguely remember sending them my opinions on their Christmas offer. £20 limit on toys for a family of 4 isn’t very helpful either. This sort of thing annoys customers greatly and for Sainsbury’s to increase their profits they need to be mindful of making thing more complicated for customers if they want to develop loyalty. In contrast, Tesco has the most developed reward scheme with the most frequent doubling up of value and range of items to spend points on. It also seems to have improved its voucher scheme having simplified the doubling up process so that you can spend across departments with no limit. They had to do something after I took Tesco to court over their clubcard fiasco perhaps?!

Morrisons has only just started a loyalty card. Late to the table with that one. I discussed their woes with Adam Parsons on wake Up To Money on Radio 5

Radio 5live Breakfast Helen Dewdney talking supermarket tactics to make you buy more

Simple answer for all supermarkets?

Ask the customer what they want and give it to them. Develop a decent loyalty scheme that rewards customers, don’t  take away from exiting loyalty schemes, improve them. Surely that is obvious? Perhaps not to some CEOs. Customers have been saying for years just reduce the prices, stop all the annoying vouchers that customers have to fill their purses/wallets with, stop all the bogoffs and offers just reduce the prices, permanently. Despite the fact that this is a well-known hate of customers the supermarkets still continue the practice. Supermarkets need to set up a thorough programme of consultation running various meaningful projects not just ask for feedback from just existing customers. Perhaps it about time that supermarkets took on an “Every listen helps” slogan.

Are you loyal to a supermarket? Why? What should they do to improve your loyalty or get it in the first place? Is it just price or do they need to do more? What do you think of the price matching, deals, etc etc?!

12/03/2015 Morrisons figures