The advert tapping into the World War I centenary commemorations recreated the Christmas Day truce that broke out spontaneously between the British and the Germans and had some commentators accusing the supermarket of bad taste.
That didn’t deter people from watching it online 16.6 million times in the run-up to Christmas, knocking John Lewis’s Monty the Penguin into second place, although Monty scored higher in global terms on 22.1 million views.
But that was about the only bit of good news for Sainsbury’s this Christmas as it turned in the lowest numbers for the holiday season in over a decade with like-for-like sales falling by 1.7% in the 14 weeks to 3 January.
The one crumb of comfort for the firm was a boast that its digital online grocery business turned in its best performance to date. In the three days to 23 December, the supermarket’s online team delivered more than 110,000 orders, up 6% year-on-year.
Not everything went Sainsbury’s way though as 500 customers went without their Christmas dinner when their online orders could not be fulfilled.
And the harsh reality is that despite the uptick in online activity, Sainsbury’s rivals are turning in better numbers on the front.
John Rogers, Sainsbury’s finance director, attributed this to online services, such as Ocado, making greater use of vouchers and discount offers, a policy that Sainsbury’s is deliberately not following.
That said, the firm’s Nectar loyalty card scheme continues to deliver, with £12 4 million of Nectar points redeemed during the festive period.
CEO Mike Coupe emphasised:
We'll continue to reiterate we're not going to chase unprofitable sales. What's important for us is that we serve our customers, Sainsbury's customers on a week-in, week-out basis in our online basis and we did a pretty good job of that over Christmas.
We shipped a 110,000 orders in the three days before Christmas and our operational statistics, our operational performance was the best we've ever seen over the Christmas period. So we're pretty comfortable with our position.
That’s more than can be said for Marks & Spencer, which turned in another poor set of quarterly numbers and with the finger of blame firmly pointed at its e-commerce operation, specifically its hi-tech distribution center.
The delivery center in Castle Donington is a flagship part of a wider £1 billion upgrade of legacy IT and distribution systems. But scuttlebutt in the industry has suggested that 18 months on from its opening, the center is operating at around two thirds of its intended capability.
Whatever the real number, CEO Mark Bolland does admit to:
unsatisfactory performance in our e-commerce distribution centre.
He could of course hardly do otherwise. The firm was a victim of Black Friday when it struggled to cope with the volume of orders placed over the promotional weekend.
Prior to Christmas, angry customers were told that online deliveries would be delayed by as much as two weeks while next-day ‘click and collect’ delivery to stores was withdrawn.
Meanwhile the firm’s redesigned M&S.com website continues to under perform. Customers have to re-register to use the new site and as of the start of November, one million fewer had done so than were active on the old site.
Despite this, the firms’ trading statement boasts:
Our new website performed well operationally, even through periods of peak demand. Customer metrics including customer satisfaction and conversion continued to improve, resulting in positive sales growth through October and November.
Given that M&S.com sales fell 5.9% in the quarter, that sounds like a rather hollow boast. There’s little point in customers coming to buy from a web site if the distribution supply chain isn’t able to fulfil on orders.
Retail analysts don’t expect things to get much better any time soon. In a note to clients, Jamie Merriman, an analyst at Sanford C Bernstein states:
Management had expected Marksandspencer.com to return to sales growth in Q3 after a substantial investment phase, but we expect that this return to growth will now be further delayed.
Meanwhile John Ibbotson, director of retail consultants Retail Vision, declared:
Once Britain's greatest retailer, M&S is fast becoming an also-ran.
We spent a lot of 2014 looking at the ferocious levels of competition in the retail sector, with the grocery industry particularly vulnerable to turbulence at present. 2015 looks to see more of the same.
Sainsbury's remains seemingly hopeless marooned on a middle ground between the high end quality brands and the low end price scalpers, while M&S is showing every one of its 131 years in its sluggish performance.
Sadly for both, there's no Christmas truce in the retail wars.