Supermarkets stick by comparison strategies

LONDON - Tesco, Britain's self-proclaimed 'biggest discounter', last week had its wrists slapped by the Advertising Standards Authority (ASA) over comparison ads deemed 'misleading'.

The ASA had received complaints from Asda, and a member of the public, that Tesco did not always compare like-for-like products.

The ads are at the forefront of a supermarket price battle, which began before the global economic downturn. However, since the onset of the recession, such comparison marketing has become more prominent.

Tesco and Asda, the UK's biggest supermarkets, are making near-identical claims in their advertising. These ads could, then, raise the issues of consumer trust and confusion.

After the ASA's ruling, Asda wasted little time in deriding its rival's marketing. 'The ASA ruling proves what we've known all along - Tesco's "real baskets" aren't so real after all,' it said in a statement.

Tesco, though, intends to hold fast. A spokeswoman for the retailer says the comparison ads will continue, albeit with minor amendments.

In recent months, the supermarket has changed the way it compares prices. Its 'real basket' campaign uses the purchases in every Clubcard customer's basket to determine the products compared; Asda, meanwhile, uses independent price-checker mysupermarket.co.uk.

Tesco's approach has its critics, other than Asda. Malcolm Pinkerton, senior analyst at Verdict Research, believes its ads amount to a tacit admission that its rivals are cheaper. 'It has shot itself in the foot with its price-comparison strategy. Its method isn't independent,' he says.

In the past year, Asda has significantly outspent Tesco on TV price comparison ads. Asda invested £11.2m in such campaigns, or 33% of its TV adspend from July 2008 to the end of June 2009. Tesco invested £4.5m, or 13% of its TV adspend over the same period, according to Ebiquity.

Britain's third-biggest supermarket, Sainsbury's, has, for the most part, left its rivals to slug it out. Although it has compared itself with Tesco in some recent activity, Gwyn Burr, Sainsbury's customer director, says the ads are part of a wider push to change consumer perception.
'We ran a "spot the difference" campaign against Tesco on brands, because research told us that it was one of the areas where customers felt we weren't competitive,' she explains.

The ads showed that on the selected branded items, Sainsbury's prices were the same as Tesco.

Sainsbury's activity is part of a turn-around programme it began to roll out five years ago. One area it has aimed to address is price perception.

'We have invested £450m in price over that time,' says Burr. 'We have genuinely moved our price position, and customers have noticed that. We've bolstered our communication on price, so that we're clear about how competitive we are.'

Supermarket price comparison ads will no doubt continue well after the recession has passed. However, how they are conducted in the future will be under greater scrutiny than ever before.

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