Sainsbury not consoled by Wii hijack

October 19th, 2008, 18:43 Posted By: wraggster

Attempts by supermarket chain J Sainsbury to boost sales by selling Wii and Xbox 360 game consoles at a loss have backfired after store managers from a rival retailer hijacked the promotion by buying nearly 1,000 of the discounted consoles.

The promotion, which was launched on the final day of Sainsbury’s second-quarter trading period, saw the retailer slash £30 off the price of the Xbox 360 and reduce the cost of the popular Wii from £179.99 to £149.97.

Retail executives estimate that Sainsbury’s was losing around £10 on every Wii sold.

Below-cost selling is a rare, but not unknown, tactic used by supermarket chains to drive shoppers into stores.

It is a high-risk tactic, which can prove costly, if shoppers only buy the discounted item.

Details of Sainsbury’s promotion leaked onto the internet two days before it launched allowing Game to alert its store managers

Lisa Morgan, the chief executive of Game, confirmed that the retailer’s store managers had bought almost 1,000 of the estimated 2,000 consoles sold by Sainsbury’s. The consoles were later resold in Game stores.

“With 360 and Wii on sale at these prices we allowed our store managers to supplement their stock by buying consoles from their local Sainsbury’s,” said Morgan.

“Availability was very inconsistent, but on the whole it was a worthwhile exercise.”

Reports in the gaming industry claim that staff from other retailers including Gamestation and Chips also bought up the consoles, as well as managers from Game.

A spokesman for Sainsbury’s claimed it was a very successful promotion. “We sold out,” she said. The spokesman refused to comment on whether the consoles had been sold at a loss or whether they had been snapped up by Game managers.

http://www.telegraph.co.uk/finance/n...ii-hijack.html

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