MARKETING FOCUS: PR - The new retail battleground/Supermarkets are harnessing PR as they battle to become the definitive champions of the consumer. Robert Gray assesses what lies behind the retail charm offensive

Supermarkets used to battle for the lowest prices, the freshest produce and the shortest till queues. But now these trusty weapons have been joined by that familiar late 90s phenomenon: spin.

Supermarkets used to battle for the lowest prices, the freshest

produce and the shortest till queues. But now these trusty weapons have

been joined by that familiar late 90s phenomenon: spin.



Barely a week passes without the national press serving up stories such

as: ’Sainsbury’s vows to save village shops’, ’Asda’s World Cup hunks’

or ’Rebels of Tesco protest by slashing Levi prices’. We have even been

treated to a BBC docu-soap called Superstore, which ventures behind the

aisles at Tesco to show us what a fantastic organisation Britain’s

biggest supermarket chain really is.



Championing the consumer



PR has become the new retail battleground, as the big four UK

supermarkets slug it out in an attempt to become the definitive

consumer’s champion.



It’s no coincidence that Asda’s Archie Norman, who first harnessed the

power of PR in supermarket retailing, is now applying the same formula

to the political equivalent of Tesco circa 1975: the Conservative

Party.



With or without Norman’s continuing influence, Asda has recently raised

the PR stakes even higher. Its carefully orchestrated introduction of

cut-price designer goods at its Wakefield store in August was lapped up

by the media. It cheekily laid on a coach to take shoppers from outside

the Harvey Nichols department store in Leeds to its own less chichi

retail environment, where shoppers snapped up ’bargains’ from

prestigious names such as Gucci, Versace, Christian Lacroix and Nina

Ricci.



This was the latest in a line of PR-driven coups that have kept the Asda

brand in the news. Last Valentine’s Day every Asda store staged a

singles night, spawning headlines such as ’Asda’s sex and shopping plan’

and, during the World Cup, it laid on hunky men to accompany lonely

’football widows’ up and down the aisles. Asda has adopted a two-pronged

PR strategy, running gimmicky stunts in parallel with more serious

cost-cutting publicity.



This, says Nick Agarwal, Asda PR manager, is designed to illustrate

Asda’s proposition of ’service with personality’.



’Asda uses these promotional things to make sure its image is that of

the consumer’s friend,’ says Roger Cowe, retail business correspondent

of The Guardian. ’It’s cheaper than advertising. And partly because of

Asda’s success, Tesco has upped its promotional response.’



Like Asda, Tesco’s ’consumer’s champion’ strategy has focused on

discounting designer brands. Last July it made great play of the fact

that it was selling thousands of Levi’s 501 jeans at a huge discount to

the recommended retail price. Both stores have flaunted the fact that

they have bought supplies from the ’grey market’, either from retailers

in the US (where retail prices for designer goods are often

substantially lower than in the UK) or from distributors around the

world looking to off-load excess stock.



Sainsbury’s, meanwhile, blazed an entirely new and fruitful PR trail

recently with its plan to sell own-label goods in village stores. What

is essentially a ploy to increase the pressure of own-label on branded

goods, was portrayed in some of the UK press as a life-saving mission by

the UK’s ’favourite’ supermarket. ’Sainsbury’s rides to the rescue of

the village shop,’ said the Daily Mail, while not mentioning that

Sainsbury’s and other out-of-town retailers created the need to rescue

the village shop in the first place.



Sainsbury’s has also sought to exploit the designer goods sector, and is

poised to do battle with Nike in the courts over claims that it is

selling counterfeit goods.



As these battles in the name of the consumer fill more and more headline

space, suspicion is mounting that the retailers are employing a

proactive PR offensive to deflect attention away from an investigation

by John Bridgeman, of the Office of Fair Trading, who is focusing on the

profits the big four make on grocery products. The OFT probe was

prompted by complaints from suppliers that the low prices forced on them

by the buying power of the big chains are not reflected on the

shelves.



These suspicions gained credibility two weeks ago when a survey by The

Sunday Times revealed that British supermarkets charge consistently

higher prices than rivals in Europe and the US. It found that an pounds

82 basket of goods at a UK Sainsbury’s costs pounds 60 in France, pounds

53 in Germany, pounds 50 in the Netherlands and pounds 56 in the US. The

UK retailers argue that the strong pound makes the price comparisons

meaningless, but the fact that VAT is not added to most food in the UK,

whereas tax is added in France Germany and the Netherlands, surely

cancels out most of this difference.



Champions or fat cats



The coincidence of the timing of the UK retailers’ PR offensive is not

lost on Stephen Lock, Ludgate Public Affairs managing director, who has

been working for clothes manufacturer Tommy Hilfiger on a case against

Tesco, in which it alleges that the retailer has sold counterfeit

Hilfiger product. Lock thinks the strategy is a cynical move: ’It’s

difficult to portray the supermarkets as consumer champions when they

are the fattest of fat cats,’ he says.



That said, Lock concedes that the supermarkets have been very successful

at getting positive coverage for the fight to stock designer brands at

low prices. He thinks this is due partly to PR mistakes made by the

brand owners. ’The arguments that Levi’s and Adidas used at the

beginning of the year about appropriate retail environments may indeed

have been valid but it made them look stuck-up and that made the media

hate them,’ he says.



Bill Myers, retail sector analyst at stockbroker Williams de Broe,

considers the branded goods issue to be a ’no-lose situation’ for the

supermarkets.



’They’ve got masses of publicity from saying ’we look after the consumer

and we break cartels’, but we’ve seen similar things with Resale Price

Maintenance and the Net Book Agreement,’ he says. ’What’s driving it is

the need for the big operators to offer things other than price. They

are mopping up more and more corners of the market as food has become a

more mature business.’



Rebels with a cause



PR experts agree that the way supermarkets have transformed themselves

from retailers into multi-faceted service providers has driven them into

PR-intensive territory. PR has become a key retail marketing tool for

servicing multi-faceted retail brands in a highly fragmented media

market.



And it’s being used effectively. Mike Purdy, principal policy researcher

for the Consumers’ Association, doesn’t think the designer goods issue

is being used as a charm offensive to deflect attention away from the

OFT probe. On the whole, he approves of what the supermarkets have done

to ’highlight the discrepancies’ between the prices of designer goods in

the UK and other countries.



But what do the supermarkets say? ’We know what our brand stands for and

one of the key things is value,’ says Asda’s Agarwal. ’Where our

customers are getting a raw deal, we want to challenge that.’



Asda has certainly been consistent. In October 1995 it cut prices on

branded vitamins and supplements in contravention of the Resale Price

Maintenance agreement governing over-the-counter pharmaceuticals. Its

actions were challenged by the manufacturers and it has been fighting

for the right to cut OTC prices since. It also played an aggressive part

in the downfall of the Net Book Agreement.



Tesco believes offering consumers value for money is an essential part

of its corporate culture, and points out that its founder, Jack Cohen,

was attacking price fixing in the 60s. Corporate communications manager

Andrew Coker bridles at the suggestion that the coverage Tesco has

received on cost-cutting is the result of a PR positioning. ’It’s about

doing what’s right for the customer,’ he says. ’It’s about business

strategy. It’s not about positioning.’



One PR agency head, who represents a host of clients in the food and

drinks sector, thinks Tesco’s PR is streets ahead of its rivals because

it is ’culturally driven’, that it is is fired by a genuine belief in

what the company is doing. ’Everything they do is very well researched;

they are very good at PR,’ says Ann Fossey, deputy managing director of

Tesco’s PR agency Bell Pottinger Good Relations.



Multi-faceted brands



Praise such as this is normally taken with a pinch of salt, but in PR

terms Tesco has arguably the most successfully managed image of any

company in the UK (see graph). Serving 11 million customers a week and

as the largest private sector employer in the UK, with 160,000 staff, it

can’t afford to appear in a bad light. Supporting education has been a

key plank of its PR strategy: first with Computers for Schools and now

with SchoolNet 2000, a pounds 6m idea for schools to create ’snapshots’

of their local communities and post them on the web. Tesco hopes the

combination of technology and community will strike a chord with the

millennial zeitgeist.



There is no doubt that PR has become a key tool in the management of the

new multi-faceted supermarket brands and, used wisely, it has served

them well so far. The real test will be if the big four emerge badly

from the OFT’s investigation; then we will see what lies beneath the

gloss.



TESCO WINS CHARM OFFENSIVE



Of the big four supermarkets, Tesco’s PR strategy appears to be reaping

the most dividends. Every financial quarter, reputation analysis company

PressWatch tallies and assesses the articles written about more than

1000 of the UK’s leading companies. Scores are given for favourability

of content as well as frequency of coverage. Over the past five

quarters, Tesco’s rankings have been second, first, third, sixth and

third again. It is a remarkable achievement; Marks & Spencer is the only

other company to come close.



During the same 15 months, Asda made the top 10 just once. Sainsbury’s,

although enjoying a consecutive second and first place at the end of

1997, fell to 54th and 53rd spots for the first two quarters of 1998.

Safeway’s highest finish was 39th - rather better than the dismal 1338th

it achieved six months later for the last quarter of 1997.



DESIGNER CLOTHES, HUNKS AND VILLAGE SHOPS: WEAPONS IN THE PR WAR



- Asda has been opposing Resale Price Maintenance on pharmaceutical

products since October 1995, when it fell foul of manufacturers for

cutting the price of branded vitamins and supplements. It memorably

described price fixing as ’a health tax on every man, woman and child in

this country’.



- Asda has held singles nights since 1995. In addition, this year’s

’Shop with a Hunk’ campaign offered ’World Cup widows’ the opportunity

to ’get a nice big hunk to take them around the aisles while their

19-stone husbands are slouched in front of the telly with a can of

lager. It will be a cross between personal shopping and the

Chippendales’, said a spokesman. More reverently, the chain has also

piped church services into its stores using its Asda FM radio

station.



- Tesco’s campaign against overpriced branded goods has seen it offer

discounted Adidas, Nike, Sony, Levi’s, Calvin Klein and Tommy Hilfiger

products. ’We aim to make prestigious brands more accessible and

available to ordinary people at reasonable prices,’ said John

Gildersleeve, Tesco’s commercial director. He describes Ralph Lauren’s

criteria for selling goods as ’socially discriminatory’. This and other

media-friendly campaigns - especially cause-related marketing - have put

Tesco ahead of Asda and Sainsbury’s in terms of PR.



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