When Safeway heralded its $100 million rebranding strategy last Tuesday, the news marked the struggling grocery industry’s largest effort yet to lure consumers away from robustly growing wholesale and specialty competitors.
Attempting to re-carve its place in the grocery store sector, Safeway presented itself as the $433 billion industry’s first “lifestyle” shopping brand. Safeway would be more than just a supermarket—it would “provide ingredients for meals, [and] for life,” said Brian Cornell, chief marketing officer for the Pleasanton, Calif.-based corporation, which reported 2004 revenue at $35.6 billion. An aggressive ad and branding campaign by Interpublic Group’s Dailey & Associates in West Hollywood, Calif., launches April 18.
The lifestyle approach is working for Austin, Texas-based all-natural supermarket Whole Foods. Its stores feature premium foods, classical music, ready-to-serve fare and, at some locations, Wi-Fi Internet access. Although the expanding chain had only 168 units in 2004, it reported $3.9 billion in revenue.
According to John Rand, senior analyst at Management Ventures in Cambridge, Mass., Safeway’s new campaign is meant to point out its differences, not only from traditional grocery competitors, but challengers such as Wal-Mart, Costco and Whole Foods. Now the grocery’s campaign, he said, is more of “a brand statement as opposed to a brand experience.”
News of the revamping efforts and first-quarter sales growth re- sulted in Safeway’s stock closing up 9 percent last Tuesday. But Rand said it was too soon to tell if its updated amenities would offset its well-documented decline. It “will get people in the door,” he said. “But is the rest … really different enough to charge a premium price?”
Safeway Embarks On Rebranding
