Pak'N Save ditches mailers for big event

Foodstuffs says the events angle is working well for Pak'N Save. Picture / The Aucklander

Cut-price supermarket chain Pak'N Save will continue to develop the "event-based" advertising that last year replaced its product-and-price mailers.

Mark Baker, retail operations general manager of Foodstuffs, which owns Pak'N Save, said the shift from mailers was made last year after a national review.

Baker said Pak'N Save now ran advertised "events" about once a month based on categories, such as wine, meat and produce, instead of advertising products and prices.

The strategy would be further developed to include back to school, Easter and Mother's Day events, he said.

But the Business Herald was contacted by a reader "frustrated" that the supermarket pulled its advertising showing products and prices.

"In my household, we have traditionally looked at specials [and] did our weekly shopping according to what was on special."

Media Design School's David Bell said the shift in advertising strategy could pay off if it convinced shoppers the chain was the cheapest.

"As long as Pak'N Save can consistently maintain their no frills brand values, in the long run, it shouldn't matter that their ads don't feature prices," said Bell.

"I think low prices as a blanket policy is a far more attractive brand-building message than a short term, obviously loss-leader style price reduction. I guess the real question is, can event-based ads alone do this?"

The supermarket chain's events ads carry simple messages - such as Wine Sale Now On - and do not give details of the products on special.

Customers wanting specific information had complained about the change.

"Some people write in and say 'I know you've got a wine sale, that's all good, but have you got my Morton Estate on?'," said Baker. "We're saying 'come and find out'."

The approach allowed flexibility for different stores to discount different goods, he said.

The supermarket was known for having low prices, said Baker, and did not see a downturn in customers after stopping the product flyers.

"We certainly have no intention to go back to product and price," he said.

"All the events seem to hit the mark, we get a good lift in sales."

Pak'N Save introduced TV to its media mix when it launched the events-based campaign but, with reduced letterbox spending, its ad budget remained steady, said Baker.

It also ran full-page print ads, particularly in community newspapers with high readership.

Foodstuffs spent about $74 million on advertising in the year to June 30, according to Nielsen Media Research advertising information services, making it the nation's biggest advertiser. Pak'N Save advertising made up about $13.6 million of the grocery co-operative's total ad spend, a drop from $18 million for the year before.

New World made up the bulk of the company's ad spend.

Foodstuffs controls around 55 per cent of the country's supermarkets, including New World, Four Square and On The Spot outlets.

Big spender

Foodstuffs, which owns Pak'N Save, spent about $74 million on advertising in the year to June 30
$26.2m was on newspapers
$23.4m was on mailers
$17.6m was on TV
$7m was on radio
* Source: Nielsen Media Research advertising information services