Asda’s choice to drop Saatchis signals ad rethink

Asda has given the clearest indication yet it is set to change its price-led advertising strategy by dropping its incumbent agency Saatchi & Saatchi from the the pitch for its estimated £100m ad account.

‘Chancellor of the Checkout’ Asda campaign created by Saatchi & Saatchi.

Saatchi & Saatchi became Asda’s lead creative agency in 2009. In that time, Asda has made several changes to its internal marketing team including appointing Stephen Smith as CMO in 2012 and recruiting former Molson Coors managing director Chris McDonough as marketing director in May this year.

The Asda marketing team must now make a decision on whether to appoint JWT London or VCCP, which are the final two agencies left pitching for its advertising business after the supermarket called a review in June.

Last month Smith told Marketing Week the winner of the pitch will be an agency that can provide “new ideas” and “new thinking” to break through the “cluttered” real marketplace. 

He added the challenge would be to create innovative and creative communications “every day” – not just month to month or campaign to campaign – so that the supermarket can be known for quality as well as just price.

An attempt at more of a brand theme rather than pure price-led communications hit difficulties last Christmas. A Saatchi & Saatchi-created TV ad, which featured a mum preparing for all aspects of Christmas while her family just looked on, sparked 620 complaints alleging it was sexist and “reinforced outdated stereotypes”. Despite courting controversy amongst campaign groups, social media users and the official complainants themselves, the ad was eventually cleared by the Advertising Standards Authority.

Sales from stores open for a year or more increased just 0.7 per cent in Asda’s second fiscal quarter, the three months to 5 July. It is likely to supermarket may have been expecting faster growth in a period when the hot weather had Britons stocking up on BBQ ingredients. The British Retail Consortium reported food sales drove a 2.2 per cent increase in overall retail sales in July.

Asda is struggling to maintain its share of the supermarket sector amid growing competition from discounters Aldi and Lidl and continued growth from upmarket competitors Waitrose and Sainsbury’s. Asda’s share of UK grocery spending fell to 17 per cent in the 12 weeks to 7 July, down from 17.3 per cent a year earlier, according to Kantar Worldpanel data.

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