Christmas can make or break a retailer’s whole year, and put a spring in a company’s step for the new year or leave a nasty hangover. You can understand, then, why retailers go to town on their Christmas advertising.
Today, I’m looking at how Britain’s three FTSE 100 supermarkets — Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US), J Sainsbury (LSE: SBRY) (NASDAQOTH: JSAIY.US) and Wm. Morrison Supermarkets (LSE: MRW) — are shaping up for Christmas.
Netmums
Online parenting organisation Netmums runs an annual poll on the best Christmas TV retail ads. Almost one in three mums claim the TV ads influence where they do their festive food shop, with 7% saying the screenings definitely change their minds, and a further 22% saying the ads ‘may’ sway them.
Netmums polled 5,749 members this year. I’ve pulled out the supermarkets from the general retailers and adjusted their ad popularity percentages to give a direct comparison with their actual popularity (ie market share).
| All retail ranking | Company | Ad popularity (%) | Market share (%) |
|---|---|---|---|
| 3 | Morrisons | 27 | 11 |
| 4 | Tesco | 19 | 30 |
| 5 | Aldi | 18 | 4 |
| 10 | Sainsbury’s | 8 | 17 |
| 11 | Asda | 6 | 17 |
| 12 | Lidl | 5 | 3 |
| 14 | Waitrose | 4 | 5 |
Netmums have Morrisons’ ad as their supermarket fave, and punching well above its market-share weight. TV presenters Ant and Dec sit at a groaning festive table, serenaded by an all-singing-all-dancing Morrisons’ gingerbread man doing a version of “Be Our Guest” from Disney’s Beauty And The Beast.
Tesco’s ad was the second most popular supermarket offering with Netmums — but at a level well below the company’s market share. The nostalgic passage-of-time family Christmas theme is served up with nice period details and Raspin’ Rod Stewart’s 1988 number “Forever Young”.
A mini epic from Sainsbury’s was the poorest of the Footsie three in Netmums poll. That’s a bit of a disappointment, seeing as the ad is distilled from Sainsbury’s 45-minute festive film — to be released in cinemas next week — directed by Oscar-winning director Kevin Macdonald, and produced by Ridley Scott.
Momentum
Going into the crucial Christmas trading period, data from retail watchers Kantar Worldpanel for the 12 weeks ending 10 November tells us where the momentum lies.
The Footsie three and fellow ‘big four’ member Walmart-owned Asda all lost market share for the first time on record (Sainsbury’s suffering the least). Accelerating a theme that’s been running for a while now, the middle-market quartet was squeezed by discounters Aldi and Lidl on one hand, and purveyors of fine foods Waitrose and Marks & Spencer on the other. Aldi, in particular, is going great guns, and I note that Netmums like this one’s Christmas ad, too.
Who needs a good Christmas most?
The table below gives us an indication of which Footsie supermarket needs Christmas most in order to meet City analysts’ sales expectations for the year.
|  | H1 revenue achieved (£bn) | Forecast FY revenue (£bn) | % of FY revenue required in H2 |
|---|---|---|---|
| Tesco | 31.9 | 66.0 | 52% |
| Sainsbury’s | 12.7 | 24.3 | 48% |
| Morrisons | 8.9 | 18.1 | 51% |
As you can see, Sainsbury’s has the easiest task to meet the analysts’ forecasts. I’d also say that with the biggest pressure on the middle-market supermarkets coming from the discounters, Sainsbury’s — at the top end of the middle — is better positioned than its rivals. However, there is that ad that Netmums weren’t particularly enthusiastic about…