Asda appoints Saatchi & Saatchi as parent Walmart takes tighter control of marketing

Asda has appointed Saatchi & Saatchi as its lead advertising agency, replacing VCCP after three years as parent Walmart takes more control of the struggling UK supermarket after growing impatient following a period of poor sales.

According to Asda, the appointment of Saatchi & Saatchi as its lead creative agency and Zenith (replacing Carat) as its media agency is part of Project Renewal, an 18 month plan which involves generating greater cost-efficiencies internally and lower in-store prices. As part of the plan, Asda revealed it would make an additional £500m in price cuts over the next 18 months, to add to the £1bn it pledged back in 2013.

Asda’s recently appointed chief customer officer Andy Murray said today’s move represented a “big commitment” to the Asda brand.

He said: “We’ve made a big commitment within Project Renewal to our brand and we are making changes at pace that will differentiate Asda with our customers both in store and online. I look forward to the new partnership and the leadership, creativity, and effectiveness that Saatchi & Saatchi will bring to the business.”

Asda’s links to Saatchi & Saatchi

The move is perhaps unsurprising given Murray’s history with Saatchi & Saatchi. The former Walmart marketer was founder of shopper marketing agency Saatchi & Saatchi X, which has worked with Walmart since 1996.

During his previous role as Walmart’s senior vice-president of creative and customer experience, Murray also aligned the US retailer’s marketing with the agency, working on high-profile campaigns around events such as the Winter Olympics with Saatchi & Saatchi.

And it isn’t uncommon for supermarkets to stick to what they know. Tesco boss Dave Lewis, for example, quickly moved to make BBH its chief ad agency after dealing with them during his time with Unilever.

An inside source told Marketing Week: “Andy founded Saatchi & Saatchi X and spent a great deal of time working with Publicis Groupe in the US so this isn’t as surprising as it looks.”

Sending in the ‘Walmart troops’

In particular, the source claims Walmart has had enough of Asda’s poor performance and has “sent in the Walmart troops” to clean things up.

Asda saw its sales fall 5.6% over Christmas, marking its sixth consecutive quarter of declines.

It has also lost its place as the UK’s second biggest supermarket, with its market share falling by 0.9 percentage points to 16.2%, according to the latest data from Kantar Worldpanel.

READ MORE: ‘Our advertising is not to blame’ insists Asda as sales fall for a sixth consecutive quarter

The source said that cost-cutting is high on Walmart’s agenda and that Asda will move to a global model, where its parent’s marketing is most likely filtered down and then applied to the UK market. Walmart is saying “enough is enough” and sending its “own troops” such as Andy Murray to “clean things up” at its UK business.

The source added: “The issue is these people are coming in from the US where Walmart is the cheapest but in the UK Asda has lost that position to Aldi and Lidl. It will need to accept that and adapt its brand messages.”

Growing synergies between Asda and Walmart

Over recent years, Asda has become more closely aligned to its parent Walmart. In February 2015, for example, Asda adopted Walmart’s ‘Save Money, Live Better’ slogan while also taking up the US retail giant’s sunshine logo.

However, TCC Global’s global insights director Bryan Roberts says Walmart cannot afford to make too many changes to the Asda brand.

He told Marketing Week: “Asda is a brand worth keeping. But what aligning with Walmart does do is shift the focus away from price and attract a more aspirational customer.

“Asda will welcome anything it can to broaden appeal right now.”

TCC Global’s Bryan Roberts

This also isn’t the first time Saatchi & Saatchi has worked on the Asda account, having lost it to VCCP back in August 2013. And during the time away, Marketing Week understands it maintained a close relationship with Asda by working with Walmart as a roster shop agency.

VCCP’s most recent campaign for Asda was the Giant Hen activity over Easter – a period where Asda credited the ad for helping it to sell out of Easter Eggs.

VCCP will stop working on the Asda account and hand it over to Saatchi & Saatchi by the end of June.

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