Down, down but not out: Coles thinks it's onto a good thing with new ads
Coles has unveiled a new marketing campaign that departs radically from its long-running "Down Down" campaign, with the supermarket acknowledging it needs to fight on more than just price to win back customers from a resurgent Woolworths and cut-price marauder Aldi.
The supermarket wants customers to know that "Good things are happening at Coles" by spruiking its Australian produce sourcing policy, its support for charities and communities, and its sustainability efforts.
The "good things" campaign will compliment Coles' "Down Down" marketing and the accompanying giant red hand, not replace it.
"Down Down" launched in 2010 along with drastic discounting that sparked a ferocious price war with Woolworths.
Retail experts had previously said Coles' marketing efforts had become too focused on price at the expense of quality.
Unveiling the new ads at an event in Sydney on Tuesday, Coles managing director John Durkan said a survey of 45,000 of the supermarket's customers and employees had helped form the new campaign.
“It informed us on what they want to hear from us, and it’s way beyond low prices," he said.
"We've got to be beyond price - we certainly heard that around the country."
The change in marketing reflects what Coles is doing in stores, with a focus on making shopping easier and building customers' trust that they were receiving good value on price and quality, Mr Durkan said.
It was "hardly a delight to go shopping" for groceries, he said, and Coles' need to make it as easy and simple as possible.
"No one wants to go and have to buy their food and think too hard about it," he said.
"Customers want to be able to trust. They don’t want to think ‘I’m going to get ripped off?'"
UBS analyst Ben Gilbert told clients in January that Coles' marketing had "become reactionary, with an over-reliance on price-based promotions and not enough focus on other value measures," such as quality and its involvement in the community.
Coles' "Sport for Schools" campagin launched in early 2018 was a step in the right direction, Mr Gilbert said.
The new campaign comes as Coles looks for ways to regain momentum against Woolworths, which has out-performed it for the past five quarters.
Coles supermarket sales same-store sales grew at 1.3 per cent in the second-quarter compared to 5 per cent at Woolworths.
Earnings at Coles, owned by the conglomerate Wesfarmers, fell 14 per cent in the most recent half while earnings at Woolworths grew 11.1 per cent.