Tesco not interested in ‘blockbuster’ ads as food boosts its Christmas sales

Tesco has given an insight into its advertising plans for 2017 as it capped off a year of recovery with a good performance over Christmas.

Tesco’s chief executive Dave Lewis says he isn’t interested in replicating the “blockbuster” Christmas advertising tactics used by rivals such as John Lewis and Sainsbury’s.

Tesco revealed its like-for-like sales grew 0.7% in the UK for the six weeks to 7 January, crediting its fresh food for “outperforming the market”. And Lewis insisted he was happy with the contribution of Tesco’s festive TV advertising to these numbers, despite some industry polls suggesting it had failed to resonate with consumers.

Speaking on a press call this morning (12 January), Lewis told Marketing Week: “I’m happy with how the TV campaign performed and how the brand is evolving given [the low position] it started from.

“Our take on Christmas ads is the more appropriate we can be, the more helpful we can be and the more real we can be is much more effective than reverting to blockbuster advertising.”

On the appointment of Unilever’s Alessandra Bellini as Tesco’s new chief customer officer, Lewis seemed to confirm her initial focus will be on food. He added: “We launched a new food campaign this week and you’ll see a strong focus on communicating that core in 2017. Our marketing core will evolve and I’m looking forward to a fresh pair of eyes as I’m sure she’ll have a big impact on our marketing.”

READ MORE: Tesco makes step change in how it talks about food with new campaign

Lewis was keen to point out Tesco’s fresh food performance, with like-for-like sales up 1.7% over Christmas. He said customers returned to Tesco over the festive period, driving its premium Finest wine sales up by 20% and party foods sales up by 24%.

There has been some speculation Aldi and Lidl struggled this Christmas, with both discounters’ inability to produce like-for-like sales seen as evidence of a decline. While Aldi claimed a record Christmas and Lidl said total sales were up 10% over Christmas, analysts have questioned why the German discounters are not using figures that are comparable to the big four or giving reporting periods.

Their struggles have come as both Tesco and Morrisons posted good results over Christmas, while Sainsbury’s saw sales grow albeit it by just 0.1%. Responding to another question from Marketing Week, Lewis claimed Tesco’s turnaround has resulted in much more loyal consumers.

He explained: “We have attracted customers back by doing a range of things. We started in terms of improving availability, service, range and price, and that continues. And on every single customer measure, over what was last Christmas also a very strong one for Tesco, we’ve improved in 2016. When you do that you are rewarded with customers staying more loyal.

“The important thing to remember is people never stopped shopping with us, they just did so with less frequency. Where we’ve improved the offer, they have rewarded us by increasing the share of shopping they do with us.”

Tesco also reported a 1.8% rise in UK like-for-like sales for its third quarter – the 13 weeks ending November 26. As a result of its positive festive performance, Lewis says Tesco is now in line to add “slightly more” on top of its previously predicted £1.2bn in pre-tax profits for the year.