Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the supermarket quickly became a British favourite and, by 1922, was officially the largest retailer of groceries in the UK. It held this spell at the top for almost three-quarters-of-a-century, before Tesco snatched the lead in 1995. Today, Sainsbury’s enjoys a 16 percent market share of the supermarket sector, with more than 1,400 stores across Britain, but there was a shaky moment in 2000, when it looked like it may slip down the pecking order below ASDA.
Presenter Fiona Phillips revealed the saga during Channel 5’s series ‘Inside Posh or Past It?’.
She said in 2019: “From the Noughties onwards, the issue of loyalty was just one of the problems facing the company.
“Sainsbury’s should have been back on the up and doing what they do best, they had two great ideas – Jamie Oliver and a new clothing range.
“But, behind-the-scenes, the mechanics of their brand-new supply system was in a right old mess.
The state of the stores was really pretty chaotic
“Around this time they lost their number two spot to ASDA.”
The Sainsbury’s Warehouse Automation project failure of 2003, saw the company write-off £260million after the system did not work as expected.
Judi Bevan, author of ‘Trolley Wars,’ explained what happened.
She said: “Sainsbury’s spent a lot of money automating the depots and when the scheme came in, they all broke down and there were lots of entry shelves.
“Of course, customers don’t like empty shelves.”
Andrew Seth, the former CEO of Unilever, said the blunder led to dismal scenes.
He said: “The state of the stores was really pretty chaotic.
“The shelves were very often empty and the supply chain was just not working.”
Justin King was working as a senior member of ASDA’s management at the time.
He explained how the company capitalised at that moment.
Mr King said: “I worked at ASDA for most of the Nineties, we actually had an explicitly stated goal, which was number two by 2002.
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“We wanted to overtake Sainsbury’s by 2002 and although I left ASDA in 2000, sure enough around 2002, they overtook Sainsbury’s.
“When I went to Sainsbury’s, I found a business that had lost why it was in business.
“It was to serve customers well and Sainsbury’s had become an organisation that, in almost everything it did, had turned away from the customer.
“They almost thought they knew better, if you like.”
Mr King joined Sainsbury’s on March 29, 2004, and launched an internal campaign with a catchy slogan – Making Sainsbury’s Great Again.
He added: “The great thing about customers is if you are not doing a good job, they vote very quickly with their wallets and they go elsewhere.
“I kept hearing suppliers and customers and people that worked in Sainsbury’s saying this was once a great company, can’t we just be that great company again?
“So we wrote to a million of our most loyal customers and, amazingly, 250,000 of them wrote back.
“Unprecedented in marketing terms, the business turnaround plan was written from that feedback.
“It was written by the customers themselves.”
By January 2008 Sainsbury’s announced 12 consecutive quarters of sales growth and achieved its target to grow sales by £2.5 billion, three months ahead of schedule.
King announced in January 2014 that he would be leaving his post as CEO in July 2014, with the company’s Group Commercial Director Mike Coupe being announced as his successor.
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