Big events, sporting or otherwise, usually bring with them months or even years of build-up and speculation only for the event itself to be a bit dull and uninspiring. Not so the grocery sector that has flipped this on its head in recent years.
For the last decade, discussions in retail boardrooms and shop floors across the country have been centred on consolidation, with an unprecedented level of speculation, but no action. There was plenty of shadow boxing but no punches thrown. Rumours met with carefully worded press statements neither ruling in or out said comings together or splits (I should know having written many of these statements in a former life). This went on for years but last year we finally saw the first signs that consolidation was real and was going to happen on a big scale.
Sainsbury’s and Asda‘s proposed merger is big news, or at least it would be were it not for the activity we’ve seen in the sector over the last 18 months. There’s been more thrills and spills in the grocery market than an episode of Supermarket Sweep. The Tesco and Booker merger got the CMA’s green light, as did the Co-op’s purchase of Nisa. There’s a definite feeling that nothing can surprise us now. In fact, perhaps the most surprising thing about this announcement was Mike Coupe singing to himself while waiting to be interviewed, and of course his choice of song.
Sainsbury’s and Asda are not alone in having taken a hit from the discounters in recent years. Aldi and Lidl may have opened in the UK in the early 1990s but they really came to the fore during the credit crunch and recession when it became ‘OK’ for the masses to hunt out cheaper alternatives. Rather than one big shop, customers quickly moved to making several shopping lists and buying their groceries in a pick and mix style from multiple shops.
Sir Ken Morrison said the secret to running a successful supermarket is quite simply “taking money off people and giving them something in return” but the challenge in recent years has been how to get the customers into big supermarkets in the first place. Like the proverbial oil tanker, it has taken a long time for the ‘big four’ to turn things around and win back customers.
With these changes comes uncertainty and businesses must ensure that its diverse group of stakeholders are kept informed throughout. Employees, suppliers and customers will all be very keen to understand the finer details of this deal. Will suppliers be hammered down even more on price? Probably. Are customers concerned that their store could close? Almost certainly. Will employees be concerned about job cuts? Most definitely. The PR machines behind these big businesses will have meticulously planned their communications in minute detail to communicate as needed with these audiences. I very much doubt, however, that Sainsbury’s PRs could have guessed that the first crisis this proposed merger would throw up was to deal with the CEO’s rendition of ‘We’re in the Money’.
Working with businesses to develop and implement these multi-audience communications programmes is what we do at Acceleris & Limelight. Over the last decade our team has helped businesses navigate change, from implementing new supply chains, to merging several brands under one new brand, and successfully delivers campaigns for businesses small and large.
If you want to find out how we could help you, or to learn more of our retail expertise, email me at email@example.com or call me on 0845 456 7251.