Tesco has credited its Christmas ad campaign with helping to boost perceptions of quality and value, but says the advertising is nothing if its offer and execution are not up to scratch.
Speaking on a press call this morning (9 January), CEO Dave Lewis said that when the supermarket thinks about how to market to consumers around Christmas (and the rest of the year), it is thinking not just about advertising but also how it executes in-store and online. That is why measures around ease of shop, colleague helpfulness and availability are just as important as if an ad campaign has resonated.
He told Marketing Week: “The most important part of our Christmas marketing campaign is the quality of the offer and the execution. If that comes together with great advertising, that is brilliant.
“But if you have great advertising and you don’t have the executional excellence, then great advertising doesn’t cut it for you.”
Trying to get into the mindset of customers is also key to a successful Christmas, he added. That allows Tesco to plan a promotional campaign that mirrors what customers want and think about at different times in the lead-up to Christmas.
“That is playing into our thoughts as we put a campaign together,” explained Lewis.
Tesco called out the success of its Christmas marketing in helping the supermarket “perform well” despite a subdued festive season for spending. Like-for-like sales increased 0.4% year on year in its UK and Ireland business for the six weeks to 4 January.
That meant Tesco beat growth in the wider market, which increased by just 0.2% according to Kantar data – the lowest level since 2015.
“In a subdued UK market we performed well, delivering our fifth consecutive Christmas of growth,” said Lewis in a statement.
“In our Centenary year, our customer proposition was compelling, our product offering very competitive and thanks to the outstanding contribution of our colleagues, our operational performance was the best of the last six years. As a result, this Christmas we had the biggest ever day of UK food sales in our history.”
Lewis in part blamed lower prices for the lack of growth in UK grocery over Christmas. He highlights that a typical basket of festive products was £2.28 cheaper this Christmas than in 2018, while promotions such as its ‘Festive 5’ vegetable offer proved popular.
“Our Christmas lines were cheaper, that has an impact on sales,” he says.
“[Plus] going into Christmas, sentiment trackers show people were uncertain, unsure and that does translate into people being cautious about how they spend money at Christmas. But it is more a feature of the investments us and others made [in price].”
This was the first Christmas since Tesco launched its Clubcard Plus subscription loyalty service, which for £7.99 offers customers 10% off two big shops and savings on Tesco brands, as well as double data on Tesco Mobile.
While Lewis said it is still “early days” for the monthly subscription (it launched two months ago), the business is pleased with its adoption so far and is starting to see a shift in consumer behaviour around increasing basket size and more loyalty to Tesco.
“The early signs are positive,” said Lewis.