Tesco’s decision to cut a third of its total 90,000 products is designed to combat the streamlined success of the discounters Aldi and Lidl, which both stock no more than 2,000 items at each of their stores.
Speaking in January, when Tesco first revealed its intentions, Kantar Retail’ analyst Bryan Roberts said: “If you go into a Tesco you will be faced with three or four bays of air fresheners. It’s painful for the shopper to navigate a lot of these supermarkets.”
And Tesco isn’t alone in its brand culling approach, with each of the big four supermarkets known to be looking at creative ways to fill the space of the bigger stores within their portfolio.
Marketing Week spoke to two top brands, which have both suffered de-listings from the big four supermarkets in the past, to get their tips on how grocery brands can stand out and prove their worth within the current competitive climate of British retail.
Prove your worth to the category
Saucy Fish Co, known for its colourful, sauce-based fish alternatives, was de-listed from Tesco in March 2013 as the supermarket giant decided to instead push its own-label Fish In A Flash range.
However, the supermarket performed a dramatic U-turn and re-listed the Saucy Fish Co range back in September 2013.
“We were back within six months because we used data to prove our worth to the category,” said Saucy Fish Co’ marketing director Amanda Webb.
“We managed to show that Tesco customers were leaving its fish aisle to shop at competitors and in the process that was taking other protein spend out of their stores as well. We also proved that our brand generated a lot of younger shoppers and that Tesco would lose them.”
The Saucy Fish Co currently sells into the UK, US and Australia, and after hitting £31m in total sales for 2014, it is aiming to generate £35m in 2015.
Webb says brands must consistently use data to justify their worth to supermarkets, but also innovate on both packaging and advertising.
“You have to have a strong belief in your brand and make sure that when you are looking to innovate it will benefit the overall category,” she adds.
Don’t get complacent when it comes to marketing
A senior marketer of another well-known fmcg brand, which was de-listed by a big-four supermarket and asked not to be named, believes too many brands get complacent when it comes to marketing.
“You have to really believe in your brand as the supermarkets certainly believe in theirs”
Amanda Webb, marketing director at Saucy Fish Co.
“They want to know how you are supporting all of your products when it comes to advertising and to see evidence of a clear strategy,” he says.
“Not every brand can do above the line investments consistently due to budget, but they still want evidence of reach within your marketing and that you are active when it comes to social media.”
He adds: “If you are stagnant and don’t have a wide reach, you’ll find it extremely difficult to justify charging a premium price, especially with all the price cuts going on.”
Earlier this year, the Saucy Fish Co invested £2.5m in an 11-week TV ad campaign, featuring hip, colourful animation. And with supermarkets often featuring aisles and aisles of similar-looking, competing products, Webb says brands must find their character quickly.
She adds: “There’s a lot of competition on the shelves so you have to make sure your brand has a clearly defined character and individual qualities.”
Co-exist with own-label
Aldi and Lidl have managed to grow drastically despite featuring a clear majority of own-label items and only pockets of branded products. This is something that hasn’t gone unnoticed by the supermarkets.
The marketer of the high-profile brand, which was previously delisted, explains: “This is the toughest climate of supermarket retail I can remember as everyone has to justify their place, particularly ambient items, as space is a real issue.
They are all trying to copy Aldi and evoke a more simple system.”
However, Saucy Fish Co’s Webb, who controls the marketing of the brand, which is stocked in Tesco, Sainsbury’s and Ocado, says marketers must remain positive despite the competitiveness.
She adds: “You have to really believe in your brand as the supermarkets certainly believe in theirs.”
Yes, it is a competitive time in retail, but as brands there’s a lot we can do to establish personality and I think the supermarkets, especially Tesco with Dave Lewis coming from Unilever, still love to see brands do that.”
And with streamlining of brands likely to continue, marketers must wear more than one hat if they are to succeed, the de-listed marketer advises.
He concludes: “Supermarkets want brands that perform and our job as marketers is to wear two hats. First is the consumer hat, where you can identify trends and meets consumer needs and second is the retailer hat, so you can see things from their perspective.
You have to be aware of what your brand is doing to help get more people into store, to grow their business and drive spend within the overall category.”