Convenience stores put emphasis on value as consumers grow more price conscious

Thu, Feb 4, 2010, 00:00

MEDIA & MARKETING:Centra’s tie-in with ‘Emmerdale’ is a first on Irish TV for own-brand merchandise, writes SIOBHÁN O'CONNELL

CONVENIENCE STORES typically charge more than supermarkets for household necessities, with consumers prepared to pay the extra cost for the convenience of local shopping.

But the recession has made shoppers much more price conscious and, in response, Centra, the largest of the convenience retailers, has switched its marketing focus to a value message.

This week Centra began sponsorship of the Emmerdalesoap on TV3. It is a three-year deal believed to be costing the chain €400,000 a year. The “stings” around the programme advertise Centra’s own-brand range and the sponsorship is a first for own-brand labels on Irish television.

According to Ray Kelly, Centra’s marketing director: “The sponsorship of Emmerdalewill allow Centra to communicate our own-brand range to an audience of between 230,000 and 250,000 viewers five days a week, 52 weeks a year. There are over 790 products in the range and our challenge is to get across that message of the good quality of the own-brand product at cheaper prices.”

Allied to the Emmerdalesponsorship, Centra will be introducing a Free Friday promotion where every Friday own-brand products will be given away for free across Centra’s network of 470 stores to get shoppers to sample the goods.

As with advertising, sponsorship spend on TV programmes has been hit by the recession, with the annual spend reduced by an estimated 20 per cent. The market is also much more competitive than it used to be, with TV stations seeking sponsors for scores of programmes across their schedules.

On TV3, its motoring programme, Xcellerate, is available for sponsorship, while Living TV Ireland, the cable channel, recently announced six shows seeking a sponsor. Current sponsorship opportunities on RTÉ television include Home and Away, Neighbours, The Good Wife, Raw and the new Saturday Night Show, for which RTÉ has a guide price of €120,000.

Setanta Sports would like a sponsor for its coverage of the RBS Six Nations Rugby while RTÉ is looking to line up a sponsor for the World Cup in South Africa this summer.

With so much choice on offer, Nick Slaymaker, head of TV buying with ad agency Mindshare, says TV stations have to work harder to make the sponsorships more accountable. Slaymaker negotiated Kellogg’s €1 million Fair City sponsorship in 2008 and his client Nestlé used to sponsor Emmerdale.

“At the moment there are lot of TV sponsorship opportunities available,” says Slaymaker.

“There is an element of clients holding back, waiting for the right price, but demand is down too.

“Taking on a programme sponsorship requires production costs for the sponsor stings around the ad breaks. Better awareness and sales tracking provided by third-party independent bodies would help a lot.”

Slaymaker describes the Centra sponsorship of Emmerdaleas “curious”. He adds: “To my mind Centra is a more urban-centric retailer frequented by younger shoppers. The profile of the Emmerdaleaudience is not that urban.”

Centra’s decision to sponsor Emmerdalewas primarily driven by its Consumer Insights market research, which showed shoppers’ perceptions of own-brand products has turned a corner.

“We spent a lot of money on TV advertising in the second half of last year. We will spend as much on advertising again in 2010, on top of the Emmerdalesponsorship. Our research tells us that we are starting to differentiate ourselves from the other convenience stores,” says Kelly.

It is estimated that convenience store sales fell by about 10 per cent last year as shoppers flocked to discounters and breakfast-roll man disappeared into the annals of Celtic Tiger history. City and town centre locations have taken the biggest hit, with footfall down by as much as 15 per cent.

While typical grocery items usually cost less in the larger supermarkets, Kelly insists that Centra’s own-brand products match or better the competition on price. Many leading brands are producing the own-brand ranges for convenience stores and large multiples, with the brand and its own-brand equivalent coming off the same production line.

Thanks to the power of advertising, consumers used to prefer the brand they recognised, but shoppers habits are changing as the recession continues to bite.

“Sales of our packaged own-brand products are growing at over 30 per cent year per annum and now represent 17 per cent of overall sales,” says Kelly.

“The smart shoppers understand that own brands are of the same quality as the leading brands and are up to 33 per cent cheaper.”