Tim Mason – end of the road for the other half of the Tesco dynamic duo

December 6, 2012

Tim Mason, former chief executive of Tesco's Fresh & EasyChief executive Philip Clarke’s ruthless dispatch of his number two, Tim Mason, is a final reminder – if any were needed – that the past is another country, so far as Tesco is concerned. They did things differently there; they will never do them the same again.

Eventually, someone had to pay the price for Tesco’s enormous strategic folly in setting up – from scratch – the ironically-named Fresh & Easy retail venture in California. One thousand stores were promised in 2006, when the initiative was hatched; 200 have actually opened and nothing but a £1bn loss has been banked. By rights, the faulty judgement was Sir Terry Leahy’s (as he himself has admitted). But Leahy has long since departed as chief executive; while Mason fronted it and is still very much in the public eye. Mason offered to conduct the strategic review into Tesco’s US operation himself, but Clarke needed a scapegoat and declined the offer. Mason had to go.

Arguably, however, Mason set himself up for a fall with his own poor judgement call in 2006. He should never have allowed Leahy to prevail upon him to undertake mission impossible in the first place. The USA – even in the heady early noughties – was widely perceived to be a graveyard for aspirant UK retail brands. Marks & Spencer, Sainsbury and several others had broken their back on the same reef – and paid the price in years of dysfunction. But Tesco, at the time, was in the grip of advanced corporate hubris: as the head of world’s most successful retailer, Leahy was convinced he would be the one to buck the trend.

And who better to lead the vanguard than his most trusted lieutenant, Mason? Mason and Leahy were the dynamic duo at the heart of Britain’s most successful retail story. Leahy was the sharp business brain, and Mason the marketing man with an uncanny, intuitive feel for what the customer wanted. Together they had not only assured Tesco’s dominance in the UK retail market, but put an unchallengeable distance between Tesco and all its competitors – encapsulated in a single, extraordinary, statistic: By 2005 £1 in every £8 spent in Britain’s shops went to Tesco.

The feverish back-story to all this success was more disquieting. What would happen, in the not-too-distant future, when Leahy retired? Leahy clearly supposed that Mason could make the leap from marketing to corporate leadership that he himself had so effortlessly executed. Mason, who joined Tesco in 1982 and had headed marketing since 1997, was desperate to prove him right, and eagerly clutched the poisoned chalice of Fresh & Easy.

The transition fatally upset the balance of power at Tesco. Mason may have had his fair share of bad luck in California, but his operations skills were clearly inferior to those of Leahy. With the result that, as US losses inexorably mounted, he was passed over when the succession issue finally came to the fore. Not only that. Mason’s marketing nous was sorely missed back home, just when Tesco’s UK operation most needed it.

When Mason – then group marketing chief – decamped to America, he took with him his head of UK marketing Simon Uwins. Their UK successors lacked finesse. High turnover of subsequent personnel did not help. But something other than stability was missing – that old Tesco marketing magic. Marketing became too formulaic, and too sales-obsessed.

While Tesco struggled to find a new compass-bearing in post-recession Britain, it let its competition off the back foot. Asda, Sainsbury’s and Safeway (now recast as Morrisons) began to catch up. The Tesco offer, by contrast, began to look tired and over-extended (particularly in non-groceries). The retail behemoth was engaged on too many fronts at once and it showed – in declining profits and advertising campaigns that lacked the common touch.

Would this have happened if Mason had actually been chief marketing officer in more than name? That’s the thing about subjunctive history – we will never know. An easier lesson to draw from the Mason story is one about symbiotic work relationships. Corporate success is rarely the product of a unique talent. Would Mason and Leahy in their heyday ever have succeeded to the extent they did without each other? I suspect they would not.

Jamie Oliver – the ingredient brand that became the whole meal

July 14, 2011

So farewell, Sainsbury brand ambassador Jamie Oliver. You were the exception that proves the rule – the celebrity endorser untouched by scandal or degrading personal conduct. The ultimate ingredient brand that spiced up Sainsbury’s fare without overcooking it.

Oliver’s uncompromising stand on food and animal welfare gave Sainsbury’s brand an unimpeachable wholesomeness at a time when its reputation and performance were being winded in the solar plexus by Tesco and Asda. Like all such felicitious relationships, an element of luck was involved. Right at the beginning of his tenure in 2004, chief executive Justin King was advised to drop Oliver from the advertising (agency, AMV BBDO), on the grounds that his reputation was overexposed and past its sell-by date. How wrong that judgement was, and how wise King to ignore it. One year later, Oliver was leading the charge as the great white knight of children’s healthy nutrition in the School Dinners TV series.

There was, of course, rather more to the success of the 11-year marriage than Jamie’s teflon-coated moral demeanour. In truth Oliver’s crusading fervour could be very trying; several times, he seems to have entirely forgotten who was paying £1m a year into his bank account for services rendered.

Five years ago, King must have been sorely tempted to fire Oliver when he condemned parents for putting junk food (for which read typical Sainsbury products) into children’s lunchboxes. Two years later, Oliver drew even closer to the line when he very publicly condemned Sainsbury’s refusal to take part in a television debate on battery-farmed chickens during his programme Jamie’s Fowl Dinners.

To the credit of both parties they twice pulled back from the brink, rightly judging the overall benefits of the relationship to be more important than the occasional tiff.

However wayward Oliver can be, it’s worth reflecting for a minute on what he is not: Marco Pierre White. MPW epitomises the once great chef whose celebrity has fallen on hard times. Seemingly, no brand endorsement is anathema –  Knorr and Bernard Matthews spring to mind – so long as it fends off the next alimony demand.

With Oliver, the problem is the polar opposite. His brand value has waxed to the extent that it now threatens to eclipse that of the product he is endorsing. Analysts were quick to point out that Oliver’s latest book – 30 Minute Meals, the fastest selling non-fiction book of all time – played a major role in boosting Sainsbury sales by over 10% last Christmas. No doubt, but the ingredient has now become the meal and it’s time to move on – for both parties.

None of this detracts from the Oliver/Sainsbury partnership being one of the most successful endorsement relationships of all time. As a brand ambassador only Gary Lineker – who began fronting Walkers ads in 1995 and continues to do so to this day – bears comparison.

Hugh Curly-Whirly’s TV campaign single-handedly triples Sainsbury’s sales of Colin

January 18, 2011

Oh, the awesome power of celebrity endorsement, especially when it is attached to a good cause. Our local fish-lady (stockist, not mermaid) reckons that Hugh Curly-Whirly, as she insists on calling the eminent TV chef, is now revered as a latter-day saint by fisherman at the Cinque Port of Hythe.

Fearnley-Whittingstall recently devised and fronted Channel 4’s three-parter Fish Fight campaign, which appears to have had a galvanic impact on national fish-consumption.

Curly-Whirly’s purpose was to highlight our over-dependence on certain edible fish, namely cod, tuna and salmon. That and the inanity of current EU regulations which, in seeking to inhibit over-fishing, actively promote “discards” (dead and dying fish thrown back into the sea) on a biblical scale – playing no small part in the destruction of our marine fishing industry while they’re at it.

The net result (if you’ll forgive the pun) has been shoals of consumers shimmying around all our best known supermarkets, in a desperate effort to buy up every available “alternative” fish and seafood species. Words rarely heard outside angling circles, such as “coley”, “whiting” and “dab”, have now become the common currency of over-the-counter exchanges with baffled in-store fishmongers.

What Sainsbury’s persists in calling “colin” (that’s pollack to you, with a French accent) is now going out of its doors three times faster than last week, when the programmes were aired. And Tesco, the country’s biggest fish retailer, claims that sales of fresh sardines, coley, brown crab, sprats and whiting have grown between 25% and 45% over the same period.

Mind you, one of the things you won’t hear Tesco trumpeting is sales of its tuna. The saintly Hugh used one of his programmes to excoriate the supermarket’s antediluvian attitude towards netting its own-brand stuff. Whereupon – Hey Presto! – Tesco instantly dropped its attachment to the wasteful but cut-price “purse seining” technique of slaughtering millions of innocent fish. It was a move cynical enough to leave Princes stranded at the bottom of the tuna eco-league table but, in the event, did not elevate Tesco further than fifth place.

So, nice one Mr Curly-Whirly. Just a single piece of advice from our local fish-lady and the good fishermen of Hythe, if I may. Before you direct consumers on an indiscriminate trawl for every available alternative edible fish species, do you think you could do something to educate them on their seasonal availability? All this demand at once – it’s simply unsustainable.

I’m dreaming of a John Lewis Christmas

November 14, 2010

Christmas is terribly important. And I am not talking about the Season of Cheer and Goodwill to All Men. Oh no, this is something much more fundamental: the rush to get punters into the shops with their wallets open for a last hurrah spending fest.

Up to 25% of UK retailers’ annual business is generated in the narrow period from the Christmas run-up to the end of January. And this year could well be a bonanza. Retail expert Verdict reckons it’s going to be the best time to pluck the goose since 2007, if only because a massive hike in VAT will make all of us feel much poorer by the end of January. Verdict is not alone in this opinion.

So, why do retailers saturate television air-time with so much boring, formulaic, rent-a-celeb advertising that largely fails in its primary objective of distinguishing one brand from another? With so much at stake, you’d think they’d try a little harder than throw lots of money at a small idea with big production values.

Tesco received a lot of stick for its feeble Amanda Holden vehicle. Admittedly the Belcher/Belle Chère gag isn’t that funny, but it’s a smidgin more memorable than Peter and Danii not putting a foot wrong over at M&S; Hester and Delia mouthing off at Waitrose; or the lovely Coleen prancing about like a demented fairy in the Littlewoods Christmas mansion. If you’re looking for meaningful, branded, celebrity, there’s still nothing to beat Jamie at Sainsbury’s. But that’s not saying much these days. Who wants to watch him doling out another stuffed turkey – even if it is in Halton Gill, Yorkshire’s prettiest hamlet?

One or two retailers have taken the hint and steered away from celeb culture. Asda has focused on its suppliers with a well-shot cameo of Young Farmer and Farmer of the Year Adrian Ivory and his beautiful Asda-bound Charolais. Pity he’s so wooden speaking to camera. Morrisons has been trying to teach kids the nutritional value of brussels sprouts; meagre fare – good luck to them with that one. Boots has injected a little more personality into its long-serving ‘Here Come the Girls’ theme with some slice of life stuff from five comediennes. And there’s the twinkle of an idea in Argos’s ‘Crooner’ – extinguished the moment Bing picks up the microphone and attempts to ‘update’ a White Christmas. Dream on. No amount of “Argosing” can improve on a classic; and any way, Volkswagen did it so much better with Gene Kelly Singin’ in the Rain.

The big present at the bottom of the tree must surely go to John Lewis’ Crimble effort, which just manages to veer clear of the saccharine, while reminding its audience – now here’s a lovely touch – that Christmas is as much about giving as taking. There’s even an oh-so-tasteful nod to celeb culture in there: Critics Choice 2010 BRITT Award winner Ellie Goulding backs the ad with a singalong rendition of Elton John’s ‘Your Song’.

Shame on the rest of the field for allowing that johnny-come-lately to TV advertising, John Lewis, to upstage them.

Diageo scores Pyrrhic victory against Sainsbury’s in copycat tussle

October 1, 2009

PimmsWhat a pity. The Diageo/Sainsbury’s copycat dispute has ended in a whimper, not a bang. Still it’s a result of sorts for brand-owners.

Under the terms of the out-of-court settlement, Sainsbury’s will be forced to modify its Pitchers label, so it looks less like Diageo’s Pimm’s brand, on which it is so obviously based. Likewise, Sainsbury’s has agreed to make its own branding more prominent, lest there be a suspicion of passing off.

Diageo is to be congratulated on its pluckiness in taking on the all-powerful supermarket bullies in the first place. And we should of course be mindful that prolonged legal proceedings against one of its principal customers might a) have led to considerable collateral damage and b) knowing the asinine legal system, have produced a negative result. Nevertheless, this is far from a conclusive victory. Sainsbury’s gets to keep the label; still less has it been forced to withdraw the product.

It remains to be seen how much of a shot across the bows this will be for future transgressors.

Why Diageo needs to sue the socks off Sainsbury’s

August 18, 2009

Oh no (yawn!), not another supermarket copycat product. The owner of Pimm’s is getting nasty with Sainsbury’s over something called Pitchers, which looks disturbingly similar – but is notably cheaper. Goes on all the time doesn’t it?

Well, yes it does. It’s the way you tell them, though. Let’s try again.

Spot the difference

Spot the difference

Diageo, the world’s most powerful drinks company, is taking Sainsbury’s to court over what amounts to alleged criminal theft. It marks the first time in 12 years that a brand owner has felt sufficiently aggrieved, and sufficiently invulnerable, to mount a legal challenge against a supermarket over the defence of its intellectual property rights. There, that’s more interesting isn’t it?

Last time, in the case of Penguin v Puffin (as it came to be known), Penguin’s owner United Biscuits successfully sued Asda for “passing off” its brand with a cheaper supermarket imitation. Asda was allowed to keep the own-label brand name temporarily, but forced to change the packaging – a decision which effectively neutered the purpose of the copycat in the first place.

Before moving on to how Diageo intends to ‘neuter’ Sainsbury’s, perhaps we’d better tackle an elephant lurking in the room. How come, if UB was so successful and created a legal precedent, that supermarkets have largely ignored the implications of the court ruling and blithely continued with imitations that are a hair-split away from the branded originals? I call to witness, for example, Tesco Temptations crisps, a flattering tribute to the success of Walkers Sensations (2003). Then, let me see, there’s Asda’s ‘You’d Butter Believe It’ margarine, spookily similar to Unilever’s ‘I can’t Believe It’s not Butter’; and Lidl’s ‘Jammy Rings’, so comfortingly close to Burton’s Biscuits ‘Jammie Dodgers’.

The supermarkets do it because they can. In the first place, the law on passing off is weak and ambiguous. Any brand owner taking a supermarket to court could not, heretofore, be certain of a positive outcome.

And that neatly brings me on to a second explanation. Which brand owner in its right mind would dare to do so? Answer: only a very powerful one. The reason is not hard to find. Supermarkets have an ambivalent relationship with brand owners. They  are at once principal customers and competitors (as own-label producers). Offend them, and you risk destroying your distribution.

Indeed, one way of viewing the copycat issue is that it is a symptom of the abuse of market power by our retailers. When I last checked, Tesco held about 31% share of the UK grocery market, and the next three grocers a further 45% between them. Supermarkets may be the main abusers, but they are not unique. Consider, for example, Boots Alliance. Are we seriously supposed to believe that Boots Foot Survival is not a rip-off of Scholl Party Feet? In short, copycatting is arguably as much of an issue for the competition authorities as it is for the passing-off specialists.

But I digress. We’ve looked at why brand owners fear challenging powerful retailers, but not whether, outside the interests of their own shareholders, they are right to do so. Surely we could turn the whole copycatting argument on its head and lionise the supermarkets. Are they not championing consumer interests against greedy manufacturers by producing own-label versions of desirable products at a more affordable, accessible price?

Well, no they are not – whatever they may say. While it is true that the consumer benefits in the short term from a lower price, in the longer run he or she is just as much of a loser as the brand owner. In effect unfettered copy-catting coat-tails on the success of brand-owners at a fraction of the original investment. But the easy ride comes at a high cost. That cost is the chilling effect on future product development by brand owners. If, after years of expensive product development, they are going to be ripped off and their brand premium undermined, why bother? Indeed, some may conclude that it’s better to get into generic production straightaway and form an explicit own-label alliance with the supermarkets; which at least has the merit of keeping the factory production line rolling. It is a process that Andy Knowles, founding partner of design consultancy Jones Knowles Ritchie, has dubbed “brand commoditisation” – the slow death of the brand premium.

Will the Diageo court case make any difference? Surprisingly – given the background – it may. The rights and wrongs of intellectual property law in this area have been left in a mess after a High Court judgement handed down by Lord Justice Jacob in December 2006. This particular case centred not on supermarket “knock-offs” but a dispute between two brand owners, Procter & Gamble and Reckitt Benckiser. Briefly, P&G claimed RB had copied its Febreze air freshener design. Despite the fact that there was an uncanny similarity between the two products (other than the price, that is), P&G lost. And it lost on the curious grounds, according to the judge, that because the RB product was a manifestly cheap imitation, it didn’t deceive anyone. It was the first time a UK court had been asked to decide the scope of a new piece of EC regulation, the so-called Registered Community Design (RCD), and by common account it fell down on the job – creating instead a “Charter for Copycats”.

So, why does Diageo think it might get lucky? Probably because there has been yet another subtle shift in the law that may allow it to have a shot at the problem from a different angle. Last May new consumer protection regulations came into force banning lookalike products which are packaged and marketed with the intention of misleading consumers.

So far they are untested. In the words of Nina Best, an expert in advertising and marketing law at legal practice Browne Jacobson: “…If Trading Standards were to decide to investigate this potential breach of the regulations, it would undoubtedly strengthen Diageo’s case as well as give them the right to apply to the criminal courts for the forfeiture of Sainsbury’s Pitchers.”

Sainsbury’s would enjoy that experience about as much as Admiral Byng his execution. Others, however, might be suitably encouraged.

Is Sainsbury’s boxing too clever by half?

June 22, 2009

I’m not convinced the banishment of the humble cardboard cereal box – after a century of iconic logo exposure – is such a good idea. The proposal comes from Sainsbury’s, which means to exchange it for the sort of packaging normally encasing crisps. But it’s also being mulled by the company that began it all in 1906, Kellogg.

In taking the initiative, Sainsbury’s merely claims to be environmentally progressive. And on one level, it is entirely right. Customers, as its own research makes clear, are heartily sick of too much packaging. Cereals are contained in one bag too many, so something will have to go.

imagesComing up with a unstructured, vulnerable, solution like a crisp package doesn’t seem entirely practical, however. Can’t the supermarket think of something better? I also suspect Sainsbury’s may be missing the point of its own research. Sure, people hate excess packaging. But their main bugbear is usually the fact that it makes the goodies inside inaccessible without the aid of a Kanga Drill. The supermarkets’ own fresh fruit and vegetables packaging are a good case in point. But they pale into insignificance when compared with the Herculean strength and endurance required to break into a new electric torch and arm it with some common-or-garden alkaline batteries. Does the operation really have to be that difficult?

Another point. Less may be better, but not necessarily if the less turns out to be more unbiodegradable plastic. I note the revulsion towards plastic milk pouches expressed by commentators on the Sunday Times article.

And finally… Could this be another dastardly supermarket own-label plot? Less packaging, less structured packaging, means fewer design opportunities for brands – whose ability to create shelf-awareness (eg advertising budgets) is already under huge pressure. I’ll leave that one hanging in the air.

Is Sainsbury’s King’s crowning achievement?

May 19, 2009


Justin time?

Justin time?

Another set of dreadful results from Marks & Spencer: annual pre-tax profits down nearly 40%, and the dividend sliced by a third.

Could anyone else, in the circumstances, be doing a better job than executive chairman and retail doyen Sir Stuart Rose, who must shortly retire from M&S? Headhunters are actively putting together a list of potential successors. Strongly favoured is Justin King, who has turned around the once-hopeless case of Sainsbury’s. King says he’s not for sale, at the moment. All the same, he’s beginning to look like the uncrowned monarch of British retail.

More on King’s reputation in this week’s column, out tomorrow.

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