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Safeway has dealt at least a short-term blow to its advertising and

media agencies, Bates UK and Zenith, by pulling out of national

advertising for the foreseeable future and instead focusing on local

promotions.

The supermarket chain is dropping Bates’ ’Talking Toddlers’ advertising

campaign, which has run since 1994, and will concentrate its marketing

budget on targeted promotions on a store-by-store basis.

Prices will differ across the country, depending on local competition,

and individual stores may even create their own promotional material,

aimed at whoever the store manager decides is the target customer in

that area.

While Safeway will retain Bates UK for ’brand development’, local ads

for store openings, relationship marketing and new media, it plans no

above-the-line campaigns for next year. However, it refused to say how

long the strategy would continue.

The move is likely to mean a reduction of Safeway’s pounds 22m ad

account.

Bates UK may rejig the team working on its Safeway account as a

result.

The agency’s deputy managing director, Adam Leigh, said: ’It is a new

era but the relationship between us and Safeway is as strong as ever.

Obviously, the focus is shifting but we take a long-term view.’

Safeway’s decision, taken by its new chief executive, Carlos

Criado-Perez, came as the company announced profits down 20% to pounds

150m at last week’s half-year results, slashing its dividend by 40%.

Criado-Perez, a former Wal-Mart executive, joined Safeway in July and

replaced Colin Smith as chief executive in early November.

Criado-Perez said he hopes to turn around profits and sales by next

summer.

Safeway will keep its ABC loyalty card, also handled by Bates, and said

it did not believe that different pricing in stores would affect it.

Head of communications Kevin Hawkins said there would be some changes to

Safeway’s marketing team, but no major shifts.