MAIN FEATURE: War of the aisles - Supermarkets face more complex and numerous PR issues than ever before in their battle for supremacy

Beef wars, Rip-Off Britain, genetically modified foods, bankrupt farmers, the death of the high street, ethical trading - supermarkets have hardly been out of the headlines this year, and mostly for the wrong reasons. As if that wasn’t enough, two firm favourites - Marks and Spencer and Sainsbury’s - have obligingly kept the spotlight on the sector as the media decries their so-called falls from grace.

Beef wars, Rip-Off Britain, genetically modified foods, bankrupt

farmers, the death of the high street, ethical trading - supermarkets

have hardly been out of the headlines this year, and mostly for the

wrong reasons. As if that wasn’t enough, two firm favourites - Marks and

Spencer and Sainsbury’s - have obligingly kept the spotlight on the

sector as the media decries their so-called falls from grace.



The ripples have even spread to board level, as supermarkets become

painfully aware of the importance of having someone at the top who is

seen to be driving positive change. Sainsbury’s chief executive Dino

Adriano kept his title, but relinquished control of the stores this

autumn to his deputy David Bremner, and Safeway abruptly replaced chief

executive Colin Smith after 20 years at the company with Carlos

Criado-Perez at the beginning of November, in a bid to boost its

flagging performance.



So when news of Wal-Mart’s takeover of Asda hit the media this summer,

you could forgive any supermarket corporate affairs director for crying

into the till, as the press trumpeted the end of British supermarket

retailing as we know it.



Wal-Mart is not the first cut price retailer to set foot in the UK - the

likes of Aldi and Netto have been quietly increasing market share since

they arrived in the early-1990s. But the entrance of Wal-Mart isn’t

simply one more cut-price retailer on the scene.



Wal-Mart is the biggest retailer in the world, renowned for sourcing

pretty much anything from anywhere, at the cheapest price for its

consumers.



What’s more, it does not gather market share by stealth but is ready to

shout long and hard about what it does best in order to blast away its

competitors. And, in this case, Wal-Mart’s strength is the Achilles’

heel of UK supermarkets - low prices in ’Rip-Off Britain’.



Mike Godliman of retail consultancy Verdict Research believes that the

flat-footed reaction to this tag when it first became popular meant that

retailers had already lost the initiative on the price issue before

Wal-Mart arrived.



’The UK supermarket retailers have not been good at speaking for

themselves. They could have argued a good defence on UK costs, but they

have missed a trick,’ he says.



No UK supermarket chain had strong ownership of the price issue, so when

Wal-Mart announced its purchase of Asda, it scored a double PR

whammy.



It revitalised Asda as a fresh new player, distinct from the old guard

of supermarket retailers, and cashed in on all the PR capital that

surrounded its media perception of being the saviour of overcharged

consumers.



Asda’s head of PR Nick Agarwal claims this helped to keep its edge over

Tesco and Sainsbury’s, providing a further platform for its value

message.



’The deal with Wal-Mart has shaken up the industry and has been a

talking point. We may not be number one in terms of volume but we are

number one in terms of public perception,’ he asserts.



Other retailers are working on developing their media strategies, now

that Asda seems to have taken ownership of pricing - an extremely

important issue for consumers. The significant players in the market are

fighting back by finding out what customers want and then promoting it

back to them.



’We have interviewed consumers and our results show it’s not just about

price. First is range, second is convenience, and price is third. The

customer wants a total experience and won’t be fooled by just one part

of that,’ says Godliman.



This, according to Jane Howard, director of consumer specialist Jane

Howard PR, is where PR should come into play: in encouraging consumers

to scratch below the surface of the price message and look at the other

elements of what is on offer. ’Retailers need to make a bold move away

from price in their PR,’ she says.



This was quite obvious in the case of Sainsbury’s, which declined to

comment on PR strategy for this article, but had its fingers burnt over

the whole price issue. Its John Cleese-led ’Value to shout about’

campaign was widely-criticised in the media and was even perceived to be

offensive to Sainsbury’s staff. Accordingly, Sainsbury’s new ad campaign

’Making life taste better’ is a complete shift away from price, focusing

instead on quality.



But Tesco corporate affairs manager David Sawday says there has been no

change in the supermarket’s PR strategy of communicating on value,

quality, ’Britishness’ and service with personality. Although Tesco has

probably received more good publicity than its competitors, with its

high-profile battles in the European Court over the provision of branded

goods at cheaper prices, its message seems to have lost some strength

and direction.



It is on this kind of evidence that Robert Phillips, founder partner at

Jackie Cooper PR, believes supermarkets have struggled to cope with

their new, high public profile. Their accountability is far removed from

the relatively genteel days of the early-1990s, and means coping with a

value-conscious public and a media which is all too ready to put the

boot in.



In Phillips’ opinion, the best challenge to Asda’s supremacy so far has

come from the unlikely direction of erstwhile food retailer Iceland,

which he believes is at the top of the class in terms of its PR

strategy.



Hilary Berg, Iceland’s new head of PR says this has been down to

recognising the importance of price but not letting it lead the debate

at the expense of all else.



’Wal-Mart’s appearance has put us in the middle of a supermarket price

war and means that we constantly have to reassure consumers that we

remain competitive on price. But we have been very careful to keep

long-term strategy in mind and to avoid being distracted by a

tit-for-tat exchange on pricing,’ she says.



And in formulating the long term strategy of building a brand which

encapsulates trust for the consumer, Berg has taken the lead from

consumers. ’The challenge is not so much communicating with the customer

as listening to the customer,’ she says. Much to the envy, no doubt, of

the PR strategists at its bigger competitors, Iceland has neatly

side-stepped the price war and started to set its own agenda while

building a new identity through PR (Analysis, 19 November).



Godliman says that to survive the supermarket battle beyond the price

war, this type of strong brand differentiation is key, and there is a

real danger for those in the market who do not sharpen up the message

they are sending to the customer - be it on price or on other

issues.



’The important thing for supermarkets is differentiation either towards

quality or value. Waitrose isstill sitting pretty, but it is the likes

of Sainsbury’s, Safeway and Somerfield who are stranded in the middle

and will have problems,’ Godliman warns.



Others point out that while it is the UK retailers who have suffered

miserably so far this year there is plenty of scope for Wal-Mart to

suffer at the hands of the same press that has welcomed it as the

messiah, especially in the media-conscious UK. Pundits with this view

include Bob Ortega, formerly of the Wall Street Journal and author of In

Sam We Trust, an expose of Wal-Mart.



Ortega points out that allegations of the use of Third-World sweat shops

(despite a ’Made in America’ campaign), court appearances for brand

piracy, and its love of massive, out-of-town development have all made

the headlines for Wal-Mart in the US.



But whatever strategy the supermarkets try to adopt, it appears they

have at last received a wake-up call from the new breed of demanding UK

consumer. And maybe when they reflect on it they will see the irony in

the fact that it has taken a former nation of shopkeepers to teach the

new generation of grocers what matters most.



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