Sainsbury’s is in talks with a number of top creative agencies as it considers ending a near 40-year relationship with AMV BBDO, The Drum understands.
The retailer has quietly held chemistry meetings with a handful of agencies in a review that’s being led by recently promoted marketer, Mark Given. The account is estimated to be worth £60m.
It comes amidst a challenging time for Sainsbury’s which today (8 June) reported a fall in like-for-like sales, bringing an end to two years of modest sales increases.
A spokesperson told The Drum: “Sainsbury’s and AMV have a well-established relationship that stretches back over 35 years and, as you would expect, from time to time it’s important for us both to take a fresh look.”
Last of Big Four to review
It’s perhaps unsurprising given that all of Sainsbury’s ‘Big Four’ grocery competitors have overhauled their agency rosters in the last 18 months.
First up, Tesco unceremoniously dumped Wieden + Kennedy and moved its £110m creative account to BBH at the height of its troubles in January 2015.
One year on, Morrisons cut ties with agency of nine-years DLKW Lowe in favour of Publicis London and in April this year Asda’s newly instated marketer Andy Murray moved the retailer’s £73m creative business from VCCP to his former agency Saatchi & Saatchi.
Consequently, although Sainsbury’s relationship with AMV BBDO has resulted in many successful campaigns – usually around Christmas – it has undoubtedly been at risk of the creative output becoming stale.
This is particularly true of late as the grocer culled many of the services which formed the backbone of its customer facing comms, including its Brand Match scheme and other price-promotions.
Shake-up of the marketing team
A review of the creative business has also been on the cards since last August when its marketing team was restructured. Morrisons, Asda, and Tesco similarly reviewed after an overhaul to their respective marketing teams, inevitably leading to speculation of on the fate of AMV BBDO.
Former head of brand communications Mark Given – who The Drum understands to be leading the review – was promoted to director of marketing planning and propositions while the role of head of brand communications was scrapped in favour of a newly formed head of campaigns role in order to streamline the marketing function.
As the dust settles on the marketing team’s overhaul and it looks forward to the coming year one major landmark on the horizon is the merger with Argos.
Sainsbury’s £1.4bn bid for Argos-owner Home Retail Group has been driven purely by the retailer’s desire to better align its on and offline offerings to serve customers “whenever and wherever they want to shop.”
Little has been said on what this would mean for its marketing output, or that of Argos, but an agency that can draw on the vast data reserves the merged entity will have to gain insights on how to advertise to the expanded customer base is sorely needed.
Argos currently works with WPP-backed CHI& Partners.
The review does not affect PHD, which retained Sainsbury's media planning and buying account last year.