Sainsbury's set to slash £40m from marketing

Sainsbury's is to cut £40m from its marketing war chest over the next three years as part of its bid to get 'back to basics'.

Chief executive Justin King told Marketing that of the retailer's total annual marketing budget of £240m, more than half is currently spent on the Nectar loyalty programme, and it is now reviewing its link with the scheme.

'Customers clearly value Nectar, but we have to justify the investment. Points mean prizes for members and we want greater results at less cost,' he said.

At last Tuesday's strategy presentation, King outlined plans to establish Sainsbury's as the destination supermarket for quality food, saying its Taste The Difference range would be key.

'We're better than Tesco and Asda on quality, and I don't know why Waitrose or Marks & Spencer should be a benchmark when we could beat them,' he added.

Sainsbury's has refused to commit to extending celebrity chef Jamie Oliver's ad contract, which runs out in July 2005.

However, King said Oliver 'did a great job' and his role had already been modified to reflect the supermarket's refocused strategy on 'good food costs less'.

The future of Sainsbury's 'Making life taste better' strapline is in doubt, with the supermarket reluctant to commit to keeping the slogan for the next 12 months.

Last week Sainsbury's revealed it was to cut 750 head office jobs, with at least 70 of 300 marketing jobs expected to go (Marketing, 20 October).

It is also recruiting 3000 store staff and overhauling its troubled supply chain.