Woolworths has initially called in Delaney Lund Knox Warren & Partners, TBWA/London, WCRS, Leo Burnett, Bartle Bogle Hegarty and McCann-Erickson for the first stage of the review.
It is understood that the six agencies will be trimmed to a shortlist of three, which will fight it out with Bates in a repitch for the business.
The review is being overseen by Octavia Morley, the marketing director, and Mark Trinder, Woolworths' head of brand communications.
The company said that the pitch will not affect the media planning and buying account, which will continue to be handled by Zenith Media.
"Bates has worked with us very effectively for many years and it will, of course, be at the top of our pitchlist," Morley said. "We are looking to refresh our brand identity in the year ahead and to reinvigorate it in the eyes of our customers. It is therefore essential that we consider all of the resources and creativity available to us."
She added that the process was expected to take about a month to complete.
Last week, the beleaguered brand posted better than expected Christmas trading results. These improved sales figures came on the back of Bates' £10 million pre-Christmas television campaign for Woolworths, fronted by Paul Kaye, the actor who plays the Dennis Pennis character. Kaye had criticised his involvement in previous advertising. The sales uplift was considered crucial to maintaining the City's confidence in Woolworths.
The retailer is in discussions about whether to renew Kaye's contract, which replaced the four-year "Don't forget what you came in for" push that featured celebrities such as Des Lynam.