Tesco drops TV ads in Christmas push

TESCO is to forego TV advertising this Christmas in favour of a direct-mail campaign. The pounds 3m to pounds 4m it normally spends on mainstream television commercials will be used to woo its 7 million loyalty card holders with a magazine and other promotions.

The decision marks the beginning of a significant shift in the supermarket group's marketing mix. Chairman Sir Ian MacLaurin is delighted with the huge take-up of the loyalty card and sees the resultant vast database as a marketing goldmine.

The company is putting the finishing touches to a boardroom revamp, in which marketing director Terry Leahy is expected to be named in the new post of chief executive. An announcement is expected imminently.

Sir Ian will confirm his retirement in June 1997. David Malpas, managing director, is also expected to announce his retirement. David Reed, the finance director, will continue to play a key role.

The centrepiece of the direct marketing campaign is a glossy magazine produced by The National Magazine Company, publisher of Good Housekeeping. Some cardholders will also be invited to a special evening in the stores on 5 December, where they will be regaled by carol singers and plied with mince pies. Stores will stay open till 11pm.

Tesco is working on plans to exploit its database and roll out other direct-marketing campaigns. These include;

o A "gold" Clubcard. High-spending customers would be eligible for bigger discounts than ordinary Clubcard holders.

o Product-specific campaigns. The Tesco computer will identify from its records, say, customers who never buy wine, and offer them a money-off voucher to try Tesco wines.

o Spoiler campaigns. Here Tesco would identifying cardholders in the catchment area of a newly opened rival supermarket and woo them with special offers.

Clubcard has been the main driving force behind Tesco's above-average sales growth. Tesco was the first of the big five supermarket groups to launch a card, giving it a significant edge.

Cardholders get a 1 per cent credit on money they spend in the stores. This is sent to them in the form of redeemable vouchers.

Meanwhile Sainsbury is winding down its own loyalty card and sticking to a Christmas catalogue backed up by conventional TV advertising. It promises a "comical spoof" commercial in its series of celebrities' recipes.