Why scrapping Brand Match makes sense for Sainsbury’s

Yesterday Sainsbury’s announced that it was scrapping its Brand Match scheme.

In summary, the scheme worked like this:
If you bought more than 10 items and your shopping included one or more “comparable” branded items Sainbury’s would check the prices of those branded items at rival Asda. If Asda’s prices were lower you would get a voucher for the difference that you could use on your next shop at Sainsbury’s.

Sainsbury’s Brand Match scheme was launched 5 years ago amid strong price competition between the big 4 supermarkets. Sainsbury’s two biggest rivals also operated at the time and still operate their own schemes that compare prices on branded goods. Tesco has Brand Guarantee and Asda has Price Guarantee. Morrisons also operated a similar scheme, now dropped, as part of its Match & More loyalty programme.

The reason given by their marketing director, quoted in an article in The Telegraph, is undoubtedly true:

“Customers have told us that they want lower regular prices, and that this is more important to them than Brand Match.”

It comes down to perception.

Sainsbury’s has long been perceived to be the most expensive of the Big 4 supermarkets. They have tried hard to change this with schemes like Brand Match and more prominently their slogan “Live well for less” which is emblazoned on their website and till receipts.

Sainsbury’s still perceived to be the most expensive of the Big 4 supermarkets

A survey conducted yesterday by AttaPoll, shows that of the Big 4 supermarkets Sainsbury’s is clearly still perceived to be the most expensive place to shop.

So in summary:
1. It costs Sainsbury’s to run and administer the Brand Match scheme.
2. Their biggest rivals operate similar or more generous price matching schemes for branded products.
3. Crucially, customers still perceive Sainsbury’s to be the most expensive of the big 4 supermarkets.

Taken together, one can see why it makes sense for Sainsbury’s to drop the scheme that is costing them money and may not be having a great deal of impact on consumer perception.

What they do with the savings is yet to be seen. Do they continue their effort to change the perception of Sainsbury’s as being an expensive supermarket by reinvesting the savings into the Sainsbury’s Basics range of own-brand products? Or, do they focus on getting customers to associate perceived higher prices with higher quality or luxury?

Being a supermarket boss isn’t easy.

Survey conducted by AttaPoll using it’s panel of UK adults on 7th April 2016. Respondents were only asked about their price perception of the four largest UK supermarkets (based on market share). The survey was conducted using a mobile app.