Safeway lines up launch of Tesco-style sub-brand

Safeway is following in Tesco’s footsteps with the launch of store sub-brands emulating Tesco’s Express and Metro operations.

The move signals a major shift in store branding strategy – Safeway has spent three years consolidating its brand and is in the process of converting Presto stores since it bought the ailing retailer in 1982.

Customer development director Roger Partington says sub-branding has not been “appropriate” until now, but he says it is time to look at how the brand can be delivered in different ways.

“At this point we are managing the business under one brand,” he says. “We’re only just completing the consolidation of Presto into Safeway and I’m keen to establish a recognisable Safeway identity. But at some point in the future we may review.”

The chain recently embarked on a joint branding venture with BP, which piloted four forecourt shops. These may be rolled out to a chain of 100 next year if the pilot is successful.

Safeway could follow Tesco’s lead; the latter’s ads offer high quality products, but customers are prepared to accept less in the Express and Metro stores for the sake of high-speed convenience.

Safeway was recently issued a profits warning on the back of disappointing interim results – pre-tax profits rose only three per cent to 228.8m from 228.2m in the first half of its financial year.

The supermarket intends to place more emphasis on micromarketing but has yet to replace electronic relationship marketing controller Steve Taylor, who quit to join the launch team of Loyalty Rewards.

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