I wonder if the spirit of one of the early European discount supermarkets has risen again – at least in packaging terms, a new Co-operative repositioning of its discount range may suggest the answer is yes.

Lets go back a bit first though;

• Netto is an established European brand.
• It’s Danish
• It was formed as recently as 1981.
• It was arguably one of the earliest European discount supermarket entrants, I used to walk past one in Halifax in the mid 90s.
• It pre-dates the ever upward rise of ALDI and Lidl.
• It disappeared from the UK High Street in 2011 when ASDA, who bought it the year before for GBP 778m, finished their refurbishment of the UK stores

It’s brand and design ethic is simple : Yellow … and Black … and Bold … I think that covers it!

It had/has a distinctive (yellow and black) logo, which in fairness I have always liked – it exudes friendliness and the design is nice too!

It retains this look in Europe.

I was therefore very interested to see the new Co-operative packaging for its discount range when in an East of England Supermarket recently.

I think this is clear play by the Co-operative Group (see the LOW PRICE messages),  and its Trading Group arm in particular (they supply branded goods to most Co-operative food stores not owned by the Co-operative Group eg East of England, Lincoln, Mid Counties and so on) to capture what is the fastest growing sector in supermarkets at present.

The packaging is bold and eye-catching, and the colour combinations breed familiarity and play on past knowledge.

The unfussy design and colour leaves one instantly knowing it is the discount range. The colours strike a recognition chord that you feel must be intentional … look at Netto, and Lidl, by comparison.

The Co-operative has experienced many troubles recently, not least for the Food business the sheer scale of vacant stores eating profit and so making convenience pricing high by comparison to Aldi, Lidl and ASDA.  In the current environment that looks increasingly unsustainable.

This might be a clever ploy in packaging design that is undermined by pricing. That remains to be seen, but the packaging looks distinctive which is the first imperative in gaining cut-through in store. I wonder though if it will attract new customers, the “Here for you for Life” advertising now on TV does not play to this approach cleanly.  So, what I believe is at risk is a disconnection of advertising on TV and the packaging and in-store messaging and PoS.  This could ruin this strong discount approach before it gets started I think.

The bacon and bread ads are price led, and beautifully shot, with a  warm relaxed voice over from Katherine Kelly, but they just don’t imply discount strongly enough to make me change my habits.  Leo Burnett do make nice ads for TV. See what you think;

Who knows if I am right or not, its early days? If the local print and door-drop advertising pick it up confidently, and prices meet the consumer expectation, it might just go some way to restoring the Co-op’s fortunes. That though is a very steep hill for discount beans to climb !

I’m fond of the Co-op but this looks high risk … if existing customers are the only ones that see this range then at best it will fail to re-position itself, if that is what this is testing.  At worst it will erode margin by only presenting to existing customers who may choose it over their normal, higher priced range.

7/10 for the design though – I like it!

5/10 for the TV ad .. looks too soft to match the packaging and messaging

The Ad Critic

May 3rd ’14