NEWS: German discount chain splits account up in bid to cut costs

The German cut-price supermarket, Aldi, has split its pounds 3.5 million advertising account into three, appointing a separate production company and media agency to work alongside its incumbent creative agency in a bid to cut costs.

The German cut-price supermarket, Aldi, has split its pounds 3.5 million

advertising account into three, appointing a separate production company

and media agency to work alongside its incumbent creative agency in a

bid to cut costs.



Aldi’s decision means that Lansdown Conquest, which has handled the

supermarket’s full-service account since it launched in the UK in 1990,

will lose significant chunks of commission.



The media account will move from Lansdown Conquest into Media Campaign

Services. Print production will be handled by the studio, Carney

Richardson, using computer-generated advertising, which is thought by

Aldi to be more economical.



Bill Patterson, Lansdown Conquest’s chief executive, insisted his agency

will still have a big chunk of Aldi business. ‘We will continue to do

its strategic, creative and design work,’ he said.



Patterson added that Aldi’s decision to handle production and media

services separately was cost-based. ‘I understand its decision. Aldi is

geared to buying bananas at so much a ton. And it wants to buy

advertising at so much a ton as well. That doesn’t necessarily fit with

the way our industry works. We have done nice work for Aldi but it

thinks it can do it cheaper.’



Tony Abraham, the former creative director of what was then Lansdown

Euro, won the Aldi business in 1990. Abraham left the agency in December

1994, shortly before Bill Patterson was appointed the new chief

executive of the WPP-owned shop.



The decision to hive off media and production services has been driven

by Trevor Coates, Aldi’s managing director.



The food discounter has more than 200 stores in the UK and is set to

increase its presence in the market over the coming year. Founded amid

the austerity of post-war Germany, Aldi has developed into one of

Germany’s major food retailers with its strategy of rock-bottom pricing,

low staff levels and spartan design.



Brands are mainly obscure and exclusive to the store, with a sprinkling

of better-known lines. The UK stores conform to this approach - the very

few familiar brands include Kellogg’s Corn Flakes, Mars Bars and

Whitbread Bitter, all of which are heavily discounted. Only cash payment

is accepted.



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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).