Honking all the way to the bank

As the nation gears up to honk its vuvuzelas once again this evening when England plays Algeria in its second match of the World Cup, Sainsbury’s will be keeping its fingers crossed for another sales boost.

Sainsbury’s boasted this week that sales of vuvuzelas have gone through the roof, and having bought 75,000 of them – which boss Justin King thought was “a little brave” at the time – it is poised to sell out in the next week.

The South African horn has become the symbol of this year’s World Cup, and King was canny enough to have bought a batch after seeing them in action at a football match when he was on holiday in South Africa.

Sainsbury’s is not even selling vuvuzelas exclusively; it just so happens it is the only major supermarket to have ordered any.

But while Sainsbury’s hopes vuvuzelas will pull in shoppers from other grocers, the wider point is that the World Cup is giving the grocers a much-needed boost. Whether it’s Sainsbury’s vuvuzelas, Tesco’s singing sandwiches, Asda’s blow up goalkeeper hands, or Morrisons’ England pizzas, they’ve all had their share.

With sales lagging – both Sainsbury’s and Tesco this week reported Q1 like-for-likes up just 1.1% - low food inflation and high petrol prices have taken their toll. Many analysts believe that growth will increase later in the year, but it is not likely to reach the heady quarters we’ve seen for some over the past couple of years.

But King is right when he says that low food inflation is good for consumers, as they don’t have to switch products around in their basket to ensure they get the same for their money.

One other of the major grocery chief execs also said that only weak retailers rely on food inflation for growth.

So this year, none of the grocers will be able to hide and growth will be more difficult to come by. And while the change in management at three of the big four might give the granddaddy of the sector, King, an edge, they will all be pulling out all the stops to stay on top in the tough economic climate.

Fingers will be crossed that England goes all the way in the World Cup, and if they do, the grocers should be honking all the way to the bank.