The agency, which was the smallest of those on the shortlist, was appointed after a round of pitches a fortnight ago. The win will trigger expansion plans at CHI, which has also picked up the Heineken and Tango accounts this year. The agency is expected to start recruiting for a separate fast-turnaround operation to handle the Safeway business.
The review of Safeway's creative account, which was called in May and handled by the AAR, has fuelled speculation of a return to TV advertising for the supermarket chain. Safeway once spent £35 million on advertising in the UK but currently posts around 10 per cent of that in billings through Bates and Zenith Media. The bulk of its spend goes through Bates' below-the-line operation, 141.
Zenith's hold on Safeway's media buying business is also under threat after the media account followed the creative business into review. The agency is defending its account along with Bates UK, which is the incumbent on the planning business. BBJ Communications and Manning Gottlieb OMD are also pitching for the account.
Although Safeway has denied that it is planning a return to TV, the twin reviews are expected to trigger regional test campaigns. Safeway last used the medium in 1999 with Bates' "talking toddlers campaign. The ads were ditched in favour of tactical press work under the newly arrived Argentinian chief executive, Carlos Criado-Perez.
The refitting of stores has been a crucial to Safeway's revival strategy over the past two years. The chain is currently engaged in launching new mega-stores, with areas dedicated to pharmaceuticals, health and beauty, electrical and homeware.
An extensive store refurbishment programme has been blamed for the slowdown in like-for-like sales growth that was revealed in Safeway's annual results in May. However, this blip in performance will increase the pressure on Safeway to raise brand awareness with consumers.