Supermarkets tussle

Sainsbury's announced like-for-like growth of 5.4 per cent during the 16 weeks to October 3, outstripping results reported by Tesco
Source: Times online

The most interesting thing regarding British newspaper I have noticed since I came here is how much emphasis the media put on the retailers. It is very likely that anytime you browse through the newspaper, you will find some articles about Tesco, Sainsbury or M&S, Waitrose etc. This week, I found it hard to ignore the war of words over sales performance between Tesco and Sainsbury, which are two top retailers here.

Retailing is an important and competitive industry in Britain, and obviously the news presented is not just about the information itself, but also for the aim of public impression, which could have an impact on sales. If we take a look at the information itself, it is nothing more than mere sales figures report of Tesco and Sainsbury. What really makes the story is the contradiction between two brands competing for top sales and the tension created in most articles. Domestic newspapers such as Telegraph, Daily mail and Times, give more coverage on the topic and try to make the story really eye-catchy. On the other hand, international media present the news in a more descriptive way and focus on Tesco more than Sainsbury, due to the fact Tesco is more internationalized nowadays.

Grocery news is always the centre of attention, when the sales figure of Tesco and Sainsbury both came out on two consecutive days, on Tuesday and Wednesday. It is interesting to see how different newspapers create the “drama” in the news. Daily Telegraph is the one with most enthusiasm about the topic, where there were several articles during the same day. From source 1, it is likely for every reader to get the drama starting from the 1^st sentence. Rather than a concise and newsworthy piece of news, the article was more of analysis and comment on the different sales figures claimed by both company. The first part of the article was all about the history of the battle between two, which is not a valuable start for news but quite interesting to follow. All the colorful words used and the way it was organized made the story intense and complicated, such as the use of “aristocrat”, “stole its crown”, “revenge” etc. The useful information and figure was given in the 2^nd part after the layout of the story. Still, the way it was introduced was full of tension instead of descriptive way wih some neutral words. Even after quoting the exact words from the interviews of both parties, the author added explanation to fulfill the story. The rest of the article focused on answering the question why Sainsbury was lagging behind Tesco. A lot of analysts were interviewed and a series of reasons were given, including the declining food inflation and promotion over the credit crisis. In my eyes, all these above aimed at informing the public that Tesco was doing better for some certain market reasons and Sainsbury was not losing its status. In a word, this one is really helpful for domestic readers and costumers who are into the retailing and it doesn’t require too much background knowledge.

Only an hour later on the same day, from the same editor, there was another article regarding the topic. source 2.No doubt that this one is much better trimmed than the previous one, when it was more professional and concise. The first sentence gave you the idea clearly and the background and detailed figures were in the following parts of the news. The interviews covered the opinions from Tesco, Sainsbury and Cazenove, which made the news objective and argument very solid. More data was provided for comparison. At last, the article also mentioned Justin King’s effort to distance himself from a move to M&S and the shares in Sainsbury’s fell. I’m going to talk about this point later. In a word, Daily Telegraph is the one where the news is with the most tension and from the news you can see its effort to back up Sainsbury’s long-term growth and status.

There is also an article on FT Online, which is more open to international readers. The source of every bit of information was clearly stated in the article. Moreover, there were more figures mentioned, not only those related to the dispute, but also some data about the sales structure of Sainsbury’s. From the news, it’s easy to get a glimpse of the UK’s current situation regarding retailing industry, and even the outlook on UK’s economy. The use of words was very accurate without any emotions involved. The “rumor” about Justin King’s run for chief executive at M&S was also mentioned. Here you can get the fact that Mr.King was trying to distance himself from the rumor. However, when I paid attention the exact words, it was “he refused to rule himself out of the race” and there was exactly opposite one on Telegraph saying “he again ruled himself out of contention”. After checking the other coverage such as the one on guardian, I am sure that his words were, “I intend to stay {in Sainsbury’s} and play in part in that.” In my eyes, his effort to clear the air is very likely to have immediate effect on the investors and price of shares. But he did not really say 100% no to the position. So it really depends on how you understand the words and deliver it to the public. At the same time, the one on Times was also quite objective and convincing with the title “Sainsbury rejects Tesco’s No.1 claim.” Since it was much longer than FT’s, more background information was provided about the competition between two rivals. The interview provided deeper analysis of the figure and was quite convincing.

As to the international media, Tesco is more popular than Sainsbury. It is not surprising that there were no related news coverage in Chinese media. However, there are some articles analyzing the sales performance of Tesco. Sainsbury was not mentioned at all. Due to the fact that Tesco has more expansion into Asia and US market, the media is more likely to cover the growth and expectation of the company.

The supermarket competition is really intense in UK and it is a great indicator for the whole economy. The declining inflation of food price may boost the sales soon. It is hard to say who is the no.1 brand based on short term performance especially when Sainsbury had a comparatively stronger previous year. But is the economy going to be better so soon like Sir Terry’s upbeat comment implies? I would rather listen to Justin King’s cautious point of view about the future of UK’s economy.