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The shift in ad strategy comes as the frozen food retailer moves toward an everyday low pricing (EDLP) strategy. It blamed its sales slump of 8% during the first three weeks of July on its moving too quickly toward EDLP.

Iceland, owned by The Big Food Group and cash-and-carry retailer Booker, has focused its marketing for the past couple of years on a combination of buy one get one free and meal-deal offers.

Its current TV ads, created by HHCL and Partners, emphasise the great value deals to be had at Iceland stores, with the strapline, 'Are we doing a deal or are we doing a deal?'

Although Iceland insists it is not abandoning promotions, the company claims it is moving toward an EDLP strategy that will allow it to offer consistent good value across consumers' core shopping baskets.

HHCL is working on a broader brand campaign, due to break in the autumn, that is likely to encompass other elements, such as the range and quality of products, its 'shopability', and its level of service.

Deals would continue to play an important role, said marketing director Sara Jamison, but a key task was "making sure customers know why they should shop at Iceland".

Jamison said: "Iceland is about much more than deals, and marketing will take centre stage in communicating this to customers."

COMMENT

Iceland needs to find the right balance in its marketing strategy after a dismal two years in which its emphasis on 'buy one get one free' did not produce the required results.

In 2000 Iceland was judged a marketing success story, winning accolades for its focus on issues such as GM food and internet shopping. At the time, its decision to rebrand its stores as iceland.co.uk was hailed as an innovation in tune with the aspirations of consumers. However, its shift upmarket failed to convince its core customers and sales plummeted.

It has since relied on promotional deals, but in order to increase its 3% market share it has chosen to move toward EDLP. In the meantime, it has to give customers a reason to shop at its stores other than their low prices, and its marketing needs to reflect that.