Morrisons boosts its ad spend to gain ground in market share

Morrisons has ramped up its advertising spend as it boosts its battle against rival supermarkets. It out-spent Tesco by more than £2m in the busy Christmas shopping season last year.

Morrisons’ £29m investment in advertising in the final quarter of 2007 was also nearly a third more than Asda and Sainsbury’s, according to AC Nieslen data for the period.

The result saw Morrisons win the Christmas battle and significantly lift its market share, which rose to 11.4% in the 12 weeks to December 30, compared to 11% in the same period in 2006, according to TNS Worldpanel data.

This was not only the highest growth for any grocery retailer in the period, but also the highest growth since the company’s £3bn takeover of Safeway in 2004 (MW.co.uk, January 10). The most recent TNS data reveals Morrisons’ market share continues to grow, now at 11.6% in the 12 weeks to February 24; while Tesco has fallen to 30.9%, down from 31.3% in the corresponding 2006 period.

Morrisons also reported that it almost doubled its profit to £612m in the year to February 2008 (MW.co.uk, March 13).

Edward Garner of TNS says Tesco has been most affected by Morrisons’ growth, but another industry source believes Sainsbury’s and Asda have taken an even bigger hit.

The major boost in Morrisons’ advertising spend formed part of its £450m brand makeover last year, with an ad campaign created by Delaney Lund Knox Warren, featuring celebrities including Lulu, Denise Van Outen and football pundit Alan Hansen.

Tesco retaliated with Christmas ads featuring the Spice Girls. Retail analysts at Verdict Research revealed that the UK’s biggest supermarket chain increased its market share by just 0.8% last year, the smallest margin it has recorded since 2002 (MW.co.uk, February 22). Tesco continues to rule out promotion-driven advertising.

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