Tesco promises more brand marketing as analysts lay in to its ‘insipid’ ads

Tesco CEO Philip Clarke has hinted it will launch more brand marketing and campaigns around reassuring customers of the quality of its food ranges this year, as retail observers question Tesco’s turnaround strategy and slam its marketing as “dull and insipid”.

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Tesco has promised more brand marketing to help reverse declining sales.

On a conference call with reporters earlier today (5 June) Clarke implied the horsemeat scandal had derailed a previously planned brand campaign, adding that there is likely to be brand activity later this year. Clarke had previously denied the horsemeat contamination had delayed planned marketing activity.

In response Marketing Week’s question about what had happened to the brand campaign expected earlier this year, Clarke said: “We had to really think very hard in January following the contamination of some of our products by horsemeat so a lot of our efforts in February were based around that. Then of course in March we pushed very hard on our price promise, and that was very important. We’ve been very pleased with how that advertising has been landed, and maybe we’ll be doing something more in the future.”

Clarke also told Marketing Week it is likely to run further marketing campaigns designed to communicate the commitments it has made to British sourcing and food quality since the horsemeat scandal, to restore trust in its ranges.

Clarke was talking following news Tesco sales slipped back into decline in its first quarter. Despite the performance, the supermarket claims marketing initiatives such as Price Promise are helping improve customer perception. 

Phil Dorrell, director of the retail consultancy Retail Remedy, says despite Tesco’s “relentless marketing and promotional campaigns” the supermarket still has an “image problem”. He adds its TV ads, Clubcard promotions and in-store activity are “dull … insipid … and don’t land with the fanfare of those of other retailers”.

He does, however concede that Clarke’s turnaround plan is likely to yield results “eventually”.

Dan Coen, director at advisory and restructuring firm Zolfo Cooper, however believes the strategy is “yet to look convincing”.

In the call, Clarke reiterated the chain’s strategy to revive performance by withdrawing from low-margin non-food categories such as electricals and focus on food, clothing and health and beauty is “on track”.

Speaking to journalists this morning, Clarke emphasised that the vision is long-term and the quarterly decline is not a sign that the turnaround is not working.

He says: “Our project is a long term project and we don’t judge it quarter by quarter. It would have been nice to have positive like for likes, but that isn’t the case. We expect to make progress this year and our pan is on track. We have 850 big stores we have to change and that doesn’t happen overnight. What’s great is customers are beginning to respond and perceptions are improving.”

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