Grocery stores seem undecided about how to pull in shoppers. Traditionally, they competed on price, but now food prices have risen, will they continue to rely on the image of value to drive sales?
Last week, Sainsbury’s announced it has opened a dental practice in a Manchester store, alongside a GP surgery, pharmacy and podiatry practice. A few days later, Asda announced it was scrapping Buy One Get One Free (BOGOF) schemes as it lowers prices on 5,000 products in an attempt to make pricing more straightforward.
Sainsbury’s gambit to entice customers in with healthcare services is unlikely to have an impact with customers though. Back in 1998, Boots announced it was installing dental clinics in stores. It closed them in 2004 after losing £95m.
Sainsbury’s has only opened one clinic, so the risk is negligible. It should also be commended for trying to find new ways to tempt customers in, but where is the sense in the move, if it failed so completely for another retailer?
If anything, this is a further sign of how far supermarkets are going to broaden their ranges into whatever areas where they think there may be money to be made. Tesco and Sainsbury’s have already branched out into non-food categories such as electricals and the ill-fated foray of Marks & Spencer into homewares.
But there is a danger here that the more supermarkets diversify, the more they dilute the identity they have with consumers. The possible outcome of this has been illustrated by Woolworths, which lost all identity with shoppers, except for ‘pick n mix’.
Even so, we will certainly see more supermarkets trying out unconventional methods to attract and retain shoppers as purses get smaller and competition hots up.
