In an interim trading update today (5 December) Tesco announced that like for like sales in the UK fell 0.6 per cent in the three months to 24 November.
As part of efforts to boost performance the first major brand campaign from new creative agency Wieden+Kennedy is planned for the new year. W+K said its aim was to restore “love” for the Tesco brand when it was appointed in July to overhaul the supermarket’s brand communications.
Tesco’s Christmas marketing activity, its first work with W+K, has focused on the “little things” that make Christmas in a bid to demonstrate the “small but important part” Tesco plays in people’s Christmas plans.
A series of TV ads have shown different elements of the festive season and Tesco is thought to be launching a TV ad on Christmas Day that brings the themes together.
The Christmas ads have marked a subtle change in approach for Tesco’s brand communications but many were expecting a bigger shift. Tesco will be hoping that a brand campaign in the new year will turnaround its fortunes.
Tesco Group CEO Philip Clarke says that his six point plan to improve Tesco’s performance in the UK is making progress but that its general merchandise performance was still “not good enough”. Online and food divisions preformed better with like for like sale in food increasing 1.2 per cent and online sales up 15 per cent.
He claims there are “plenty more” innovations and improvements to come in 2013.
Meanwhile, Tesco CMO and CEO of its US Fresh & Easy chain Tim Mason is to leave the chain after 30 years amid a strategic review of the entire US operations.
Fresh & Easy has not made a profit since launching in 2007. Clarke has focused the business on reducing costs and improving profitability in the past 12 months but says “it is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate timeframe in its current form.”
Possibilities include selling off all or part of the Fresh & Easy chain or partnering with another corporate firm to develop the business. Tesco will give a further update on Fresh & Easy in its full year results in April.
Clarke says: “Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities. I have therefore decided to conduct a strategic review of Fresh & Easy, with all options under consideration.”