United Kingdom

Key Facts

Sainsbury’s wished to grow its non-food business, including re-entering the mobile market with an own-brand proposition to effectively compete with Tesco and its Tesco Mobile sub-brand.



Strategic advisory, Wholesale negotiations, Profitability analysis, Proposition design, Go-to-market support




Tesco Mobile, a joint venture with BT Cellnet (now O2) which launched in 2003 was, and is, a tremendously successful mobile brand complementing Tesco non-food sales that includes financial services and their Club Card. For Sainsbury’s to effectively compete for the all-important share of the consumer wallet growing its mobile category with an own brand offer, rather than reselling just the then mobile operators’ pre-paid offers, was seen as important.

Against this background, an earlier strategic analysis by Piran on behalf of Sainsbury’s had not progressed given other priorities related to growing Sainsbury’s local convenience format and addressing the downturn in consumer spending, and the challenge of ensuring that any new venture could effectively compete with the joint venture cost base of Tesco Mobile / O2. Sainsbury’s also had the learnings of a previous attempt at launching an MVNO in 2001 with BT Cellnet.


During the second engagement, Piran Partners undertook a comprehensive MVNO tender process with the United Kingdom mobile network operators and a full MVNO vendor evaluation and selection. Together with the client, several potential propositions were identified and modelled, and a detailed economic model and business case developed for Board approval. This included target operating model assessments, store format layouts and store colleague training needs identification.

Given Piran’s earlier analysis, it was important that Sainsbury’s had a commercial relationship that would allow it to compete commercially with Tesco Mobile, and to draw on the skills and capabilities of its partner mobile operator. At this time, Vodafone’s strategy was to grow its portfolio of virtual mobile brands and clearly saw the opportunity a joint venture addressing Sainsbury’s 20 million-plus weekly shoppers linked with their Nectar loyalty scheme. A JV would also address Sainsbury’s original concerns of aligning its mobile brand’s cost base to that of their primary competitor.

We supported Sainsbury’s senior management team throughout the joint venture negotiations with Vodafone providing commercial, strategic, and operational advice. Key deliverables included developing the customer proposition and target roadmap and identifying technical, operational and commercial prerequisites, plus supporting Sainsbury’s in branding and merchandising activities and developing a longer-term plan for the launch of dedicated store-within-store shops.


Sainsbury’s Mobile launched in July 2013 with SIM cards available through most local and large supermarkets, together with a range of handsets in key stores and promotional activities tied to extra Nectar loyalty points. Until the joint venture partners decided to part company in late 2015, Sainsbury’s had been steadily growing its market share and competing effectively with its rivals at Tesco Mobile and Asda Mobile.

Perhaps the most important aspect of Piran’s strategic advisory was to help Sainsbury’s Board understand the economics of the mobile industry which differ significantly to the fast-moving consumer goods sector, and hence the associated risks of any such venture.