Hostilities escalate over supermarket branding

As the leading supermarkets look set to consider strategic reviews and own-label revamps, Matthew Valentine and Clare Dowdy examine issues of divided loyalty among their designers

If rumours of a Tesco identity strategy rethink come to anything, supermarket giants Tesco and Sainsbury’s look set to clash again. Both are believed to be working on corporate branding as well as own-label packaging projects.

Over the last two years market leader Tesco has established a solid lead over Sainsbury’s, its biggest rival. It may now be preparing to diminish the effects of Sainsbury’s attempts at rebranding by working on a strategic programme of its own.

However, a Tesco spokesman denies that changes are afoot concerning the supermarket’s identity. The existing marque is still being rolled out, he says, and he “would be very surprised if a review was under consideration”.

Sainsbury’s is yet to make an appointment for its identity programme, although the process has moved forward, says a supermarket spokeswoman. Conran Design Group, 20/20 Design and Strategy Consultants, and Nucleus Design are among those believed to have been in discussion with the chain (DW 12 September).

Tesco has reportedly spoken to some of the major players about sorting out its collection of logos and sub-logos. The chances are that these two retailers would be chasing the same consultancies – the ultimate conflict of interest for any designers in the running.

On the packaging side, Tesco is understood to have hit problems in its search for a specialist because of branded rival companies exerting pressure on designers not to work on competing own-label products.

Tesco currently works with four groups on packaging: Rocket Design Consultants, IBH, Chen Tsoi Design and Pemberton & Whitefoord. And, the idea of one consultancy overseeing projects “Pentagram-style” would have advantages of consistency.

According to a source close to Tesco, the retailer’s plan to appoint a “heavyweight agency to handle the implementation” of new packaging ranges is stalling. “The big players are scared to touch it because of the big fmcg accounts,” he says.

One director from a consultancy understood to be involved in the Tesco packaging pitch says he has never experienced such pressure, partly through making sure the consultancy does not apply for conflicting work. But large projects for multiple product ranges create different problems, he says: “You couldn’t suddenly stop at the cream cleansers and say: ‘No’.”

There is often a clause written into contracts with roster clients deterring consultancies from dirtying their hands with the “big five” supermarket chains.

Colman Planet has experienced this with its client Nestlé. “Nestlé prefers it if you commit not to produce own-label work for the top five,” says consultancy creative director Bill Wallsgrove.

Colman Planet recognises the potential clash of interest for packaging designers, but says the situation “plays into our hands”.

“We focus on structural packaging, an area which supermarkets don’t go into. Brands are more innovative and have the spend, and they are the people we want to work with,” he says. “Own-label products by and large are not leaders, but followers.”

Metropolis 88, which works on Safeway packaging, does not see a clash of interest with brand clients. “We are very upfront about it and present Safeway work to prospective clients who sell through Safeway,” says group marketing director Matthew Bright, “[Our client] Unilever does not see it as a threat.”

Even if Metropolis 88 was in a position to work for Tesco, it wouldn’t. “From experience Tesco buys design on price,” and low prices at that, says Bright.

Another big hitter Safeway looks unlikely to start playing around with its image, as it only unveiled the existing logo by Sampson Tyrrell two years ago.

But there is no doubt that everyone is considering their positions. “I anticipate that all retailers are refreshing their identities and stores. The future of retailing is a developing one; brands must expand into more sectors [such as business and finance],” says Nucleus Design managing director Peter Matthews.

“It’s good housekeeping to review the brands,” he adds.

The industry is agreed that any branding war will be fought on the battlefield of own-label. Since the Eighties own-label has been used to build up the retailers’ brand names.

“Own-label has been used very aggressively to build up the importance of the retail brand for both Tesco and Sainsbury’s,” says NatWest Markets director of food retail research Tony MacNeary.

While hostilities continue, it will be some time before the fruits of any design offensive pay off.

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