Tesco set for major re-brand
Tesco is set for a major overhaul of its brand and image, according to The Guardian. The supermarket said it is reviewing its brand communications and has put its multi-million pound advertising account up for grabs.
The news follows Tesco’s poor results announcement at the start of the year – the supermarket suffered its worst Christmas in decades, with almost £5 billion wiped off the company’s stock market value two weeks after Christmas. It was the retailer’s first profit warning in 20 years – and was blamed on weak Christmas sales and the failure of its Big Price Drop campaign.
Tesco had announced plans to continue its Big Price Drop campaign into 2012 with another wave of price cuts across the UK before its results announcement. The supermarket claimed that a trolley shop containing a selection of 50 of basic item products would be reduced in price from £64 to £56 – a saving of £8. This represented an overall cost to Tesco of more than £500 million, according to Starcom MediaVest Group’s Steve Smith.
At the time, Tesco’s UK CEO Richard Brasher said: “As we look ahead to 2012 people across the country are saying they need more help with the cost of living… Big Price Drop is not a one-hit wonder. It is a rolling campaign to help customers save more money every day at Tesco on the essentials they need the most.”
In response to the latest news, Smith said: “Research we have done at Starcom MediaVest Group shows that Tesco has to make clear to its customers what the Tesco brand stands for, and act on it. By focusing on price alone to the detriment of communicating quality and some of the more pleasurable aspects of shopping, eating and drinking, the supermarket has been missing out on delivering to some of the core values of many of its shoppers.
“However, it is evident that Tesco has begun taking some of these into account by revamping its value range. The news about the advertising review shows that the value revamp is part of a strategic overhaul of its brand. I would therefore be surprised if this review did not include its Finest range and its Tesco Metro stores. These local stores offer the supermarket considerable opportunities to deliver to local communities. Tesco also needs to make greater use of Clubcard data and other resources to more carefully understand its customers and target them.”
Smith suggests ‘Seven things supermarkets need to do in 2012’ to acclimatise to changing financial conditions, new consumer demands and emerging behaviour around technologies, but also maximise opportunities around the year’s highlights, such as the Olympics, Diamond Jubilee and Euro 2012. He also thinks Tesco can learn from its Fresh & Easy experience in the US.