Large retailers are fighting to make moral as well as financial capital
from their marketing. Julian Lee and Harriet Marsh report on care in the
‘I have to recognise that we are not universally loved,’ admitted Terry
Leahry, deputy managing director of Tesco in his speech to the London
Economics conference on Retailing Key Strategy Issues last week. ‘Old
fashioned specialist food stores, the grocer, the wet fish shop, the
butcher - seem to inspire affection. The all-purpose village store
inspires affection. The urban corner store, open all hours, perhaps
inspires affection. But the large supermarkets do not.’
His speech highlighted a longstanding conundrum for the supermarkets -
they have captured the public’s wallets, but have yet to win their
With this in mind, retailers are increasingly looking to their marketing
departments to provide promotions that serve the dual purpose of
encouraging customer loyalty and enhancing their standing in the local
Sainsbury’s decision to extend its school equipment promotion, whereby
customers can collect vouchers for their local school on every re-used
carrier bag or pounds 10 spent in-store, and to support the move with
national TV advertising, shows that ‘social’ promotions can be highly
beneficial to the retailer.
Jonathan Smith, head of strategic marketing, anticipates a dual benefit
from extending the scheme, a perception that the retailer cares about
the community and a build-up in sales as parents are encouraged to spend
more at Sainsbury to benefit the local school.
Sainsbury is certainly not alone in realising the value of the ‘social’
pound. Tesco adopts a similar policy with its ‘Tesco Computers for
Schools’ promotion, which is to be run again between March 18 and May 26
this year. The scheme enables shoppers to collect one voucher for every
pounds 25 spent, which can be redeemed by the school of their choice
against computer equipment.
The promotion, which is currently in its fifth year, has resulted in
Tesco giving away pounds 22.4m worth of computer-related equipment to
schools. The scheme costs around pounds 7m annually, including the cost
of purchasing the equipment from Acorn and other suppliers, producing
and distributing information packs and delivering the equipment to the
‘‘Tesco Computers for Schools’ aims to encourage customers to shop at
Tesco for a ten-week period and to develop their loyalty, while
involving whole communities in an initiative which provides additional
resources to school-age children in their areas,’ says Jenny Gilmore,
national marketing controller at Tesco Stores. ‘This, therefore, raises
awareness of Tesco as a responsible contributor to the communities which
play such an important role in the company’s operations.’
Gilmore reports that it is ‘difficult to calculate’ the extra profit
made directly from the scheme due to crossovers with other in-store
The scheme has been popular with existing customers and has been
‘successful in attracting new customers to the store,’ she says. ‘It is
these additional customers that have enabled the scheme to break even.’
While these two schemes are the most grandiose examples of how retailers
are using promotions to put something back into the community, the
realisation that a community focus helps to boost staff moral and the
perception of the retailer as part of that community is growing.
Barclays staff were all approached to gauge their views of how its
annual pounds 1m charity budget was to be spent. The result was ‘New
Futures’, which offers schools professional support for the project of
their choice - be it anti-bullying or a scheme against crack addiction.
Asda also says staff involvement in local schemes helps the motivation
of colleagues, which is then recycled into the store to generate a
‘personality’ for that store. In turn, this helps sales and creates a
‘In the majority of the places we trade in, we are a major focal point
for the community,’ says an Asda spokeswoman. ‘As such our involvement
has reached a level where people expect us to take a part in what is
Such promotional schemes that are cloaked as ‘community projects’ are,
however, coming under fire. Educationalists argue the Tesco and
Sainsbury promotions breach the barely discernable line between
sponsorship and marketing and have often criticised schemes because not
only do they not fit into the teaching curriculum but, ironically, they
create more work. Barclays made sure it consulted teachers before it
went ahead with ‘New Futures’.
‘You have got teachers telling children to shop in one store or another.
They are actively directing people’s shopping habits,’ says one
consultant who wishes to remain anonymous. ‘Once that starts happening
you have got to start questioning, is that the role of teachers?’
As this field is relatively young in this country, we have to look to
the US to see the flipside of such schemes. The publicity that the
companies court with their community sponsorship programmes can
eventually end up working against them.
US broadcaster Channel One was recently criticised for an educational
scheme in which the company installed televisions in classrooms and
broadcast a number of educational programmes to children throughout the
day. It emerged, however, that the price to pay for such a service was
that the children would be exposed to advertising as part of their daily
In this country, McDonald’s education packs came under the scrutiny of
The Money Programme.
It questioned the educational worth of the pack’s word games which
included - rather conveniently - such words as burger and fries.
McDonald’s maintains the packs serve a useful purpose in the classroom
and are not just advertising.
Despite the pitfalls, sponsorship consultancy Kallaway, which runs,
among others, the Barclays scheme, says this area is a burgeoning area
for company marketing departments, as they see the worth of actively
participating in a community rather than just marketing to it.
‘It is about giving them a human face and distinguishing them from the
competition in a crowded market place,’ says Kallaway head of
communications Bea Malleson. ‘For these large companies it is often a
more effective way of saying to their customers, ‘we are interested in
you’, which goes beyond the normal exchange between you the consumer and
us the company.’