The supermarket sector is once again proving its worth to design consultancy balance sheets, with a number of major projects in the offing. And more look likely to follow as the main shopping chains gear up for some serious changes to their own-brand packaging.
Earlier this year Tesco, and, less openly, Sainsbury’s spoke of a commitment to moving away from controversial copycat packaging in favour of providing their own-brands with something closer to individual identities of their own.
Tesco, as might be expected from the market leader, looks set to be first out of the starting blocks. Although it declined to comment on the project, the retailer is known to be seeking a design group to advise it on the development of its own-brand products. Pentagram and Coley Porter Bell, again both not commenting, are understood to be in the running for the job.
Both have the credentials for such a project, with Pentagram’s John McConnell acting as design manager for Boots on packaging and CPB having completed 1600 own-brand packs for French hypermarket PromodÃ¨s last year.
The key issue when a consultancy is appointed by Tesco will be a strategic one: whether to use a generic Tesco own-brand, or to follow a path more like that of Boots, with products across most of its range given their own quality-image brands while still undercutting independent brands on price. Priced a little higher than plain, own-branded lines, such products can yield higher profit margins to supermarkets. The latter strategy is, say those in the know, the most likely.
Market analysts are positive about Tesco’s plans. Mike Dennis, NatWest Securities’ food sector analyst, says quality brands linked to supermarket franchises “can’t help but build that franchise… You are creating a value image in the customer’s mind.”
But, cautions Dennis, “you have to be very careful to understand your category management chain”. This means pitching the brand at the right level, and not giving it too much prominence compared to the proprietary brands customers are more familiar with, which can be alienating to shoppers. This, says Dennis, is why design consultancies can be “quite crucial” to the process in helping the supermarkets to target the right customers.
According to a source close to Tesco, this could also explain changes within its internal design department. The source says the department is to be further slimmed down and become more closely linked to the chain’s buyers and category managers. Again Tesco declines to comment, but design manager David Arthern has left the company within the last two weeks after his contract was not renewed.
In a wider context, Tesco’s move may prove positive to the design industry. If other supermarket chains follow its lead in differentiating their brands (and experience suggests they will) there could be a packaging bonanza. And there could also be a marked reduction in copycat branding, a positive step for designers and independent brand-owners alike.
Even Asda – the dissenting voice when Tesco and Sainsbury’s were trying to distance themselves from the copycat furore, and the chain most often in the headlines when it comes to recent copycat allegations – may have to follow suit. Asda courts controversy purely for the headlines, says one retail analyst. “I think the way Tesco and Sainsbury’s are going is, in the long run, the best way forward,” he adds. He cites the now infamous Puffin vs Penguin case as a blot on Asda’s copybook, despite the media exposure it created for the chain.
Meanwhile, Tesco’s arch rival and the former market leader, Sainsbury’s, has been maligned in recent years for failing to keep up with the plot. But it too is known to be considering changes to its design in a bid to regain its slipping market share. Sainsbury’s remains quiet about a new store identity programme believed to involve Nucleus Design, while the main board considers it, but developments are expected soon (DW 13 June).