Sainsbury enters energy market

Sainsbury: sees a future in brand extension

Scottish Power has signed a deal to sell gas and electricity under the Sainsbury brand name in a pilot scheme to begin in December.

Our research has shown that customers want the reassurance of a name they know and trust when choosing an energy provider

Alan Shepherd, managing director, Sainsbury's Energy

Customers who sign up to Sainsbury's Energy will receive additional points on their loyalty cards and Sainsbury-branded energy bills.

The scheme is an extension of an existing relationship between Scottish Power and Sainsbury, which the utility says has gained it an extra 75,000 customers in the past year.

Lesser-known utilities such as Scottish Power are keen to sign "affinity marketing" deals with household names to help them compete with established brands such as British Gas and Power Gen.

Scottish and Southern energy have signed a similar deal with discount retailer Argos and last year London Electricity began selling its energy through Virgin.

Bills no cheaper

Alan Shepherd, managing director of Sainsbury's Energy, said: "Our research has shown that customers want the reassurance of a name they know and trust when choosing an energy provider.

"Sainsbury's Energy will give us the opportunity to apply our marketing and customer service expertise to deliver added value and benefits to our Reward Card holders."

Sainsbury Energy customers will not receive cheaper bills than their Scottish Power counterparts, however.

Six Sainsbury stores are taking part in the pilot, including outlets at Leamington, Northampton, Milton Keynes, Birmingham and two in the West Midlands.

If successful, Sainsbury will extend the scheme to the rest of the country.

Sainsbury says it has no plans at present to move into other utilities.

the company claims to have 17 million Reward Card holders across 450 UK stores.