Tesco needs to get its mojo back

The marginal uplift in sales reported by Tesco yesterday (3 October) may well signal that its recovery is “on track” but the supermarket is by no means out of danger. A complete turnaround depends on the impact of future brand campaigns.

Rosie

The supermarket has, for now, reversed the slide in sales. The ‘success’, however, has come largely from an increase in use of coupons and other promotional activity, which boosts volume sales but hits profit margins.

The upcoming marketing campaign from recently appointed Wieden + Kennedy http://www.marketingweek.co.uk/news/tesco-names-wk-as-creative-agency/4002849.article and its Christmas activity will need to be more about brand building as much it is about offers.

Retail analyst Neil Saunders from Conlumino puts it well when he says Tesco has lost its mojo. The planned activity from the agency, which took over the creative account in July, is going to be critical to whether Tesco can regain that mojo.

In the results presentation, CEO Philip Clarke stated that the campaign, expected in the coming weeks, will “describe Tesco for our customers and our other stakeholders in the years to come”.

So, there’s a lot resting on W+K getting it right. The agency has a strong creative heritage of telling great brand stories that connect with consumers. The work with Nike and Honda’s ‘hate something change something make something better’ campaign as well as some more irreverent approaches such as the Cravendale cats and Old Spice man are examples of its creative ingenuity.

Tesco will be hoping to benefit from some of this creativity.

In switching from The Red Brick Road, Tesco got a new creative team in the UK for the first time in 15 years. Things have changed significantly in that time, both at Tesco, the economy and consumer mindset. It’s communications and brand positioning just weren’t hitting the right note with customers.

Sainsbury’s meanwhile, has hit on a brand positioning that customers appear to have accepted and its performance has remained consistently strong while Tesco’s has faltered.

While recent rulings by the advertising watchdog have meant some its ads were deemed to make misleading claims, its Live Well for Less positioning and the ethical business approach of its CEO Justin King chime well with consumers who are facing squeezed budgets, but don’t want to shelve their values and opt for just plain cheap.

Sainsbury’s marketing and promotions are about offering customers a solution to a problem, such as ‘Feed your Family for £5’ and the brand exudes a warmth and credibility that has lacked in Tesco’s messaging.

When W + K was appointed, Graham Douglas, head of interaction and innovation at W+K, told Marketing Week that it wanted to make the Tesco brand loved again. All eyes will be on the first major work they launched to see whether it has managed it.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here