LONDON: Retailers in the UK spent more money on traditional media advertising than the country's FMCG brands for the first time in 2010, a new report has argued.
Trade title The Grocer commissioned research firm Ebiquity to analyse expenditure levels in these categories.
Overall, the retailers assessed directed a collective £1.73bn ($2.8bn; €2bn) to TV, press, radio, outdoor and cinema advertising in 2010, a 17% increase measured against 2009.
Brands in the fast-moving consumer goods sector raised their outlay by 7.9% during the same period, posting £1.69bn across the 12 months as a whole.
The UK's ten largest supermarket chains combined expenses climbed by 10.4% compared with 2009, to a total of £417m.
Tesco, the biggest player in this segment, heightened its investment by 9% on an annual basis, lifting budgets to £102m.
Waitrose, a premium supermarket operator, saw an 84% uptick, reaching £22m, as it attempted to enhance price perceptions and leverage tie-ups with chefs Delia Smith and Heston Blumenthal.
Press titles took 52.4% of supermarket spending, with mid-market and tabloid publications receiving a 20% share, rising from 10% in 2007.
Elsewhere, high-street giant Marks & Spencer generated a 59% improvement, particularly focusing on its apparel range, and hit £62m.
"These figures represent a huge shift in power from brand owners to grocery retailers," Richard Buchanan, director at branding agency The Clearing.
According to Buchanan, a vital advantage retailers enjoy is the information yielded by customer transactions and loyalty card programmes.
"Brands are still driving growth in grocery. Even so they've lost power and are one step away from customers as retailers now understand their customers better," he said.
Promotions were a major tactic adopted by supermarkets since the downturn began, and are likely to retain a central role.
"The very aggressive buying strategies of the supermarkets are not going to swing back at any point soon," Claire Wood, an associate planner at the Leith Agency, said.
Shoppers remain in a frugal mood due to uncertain economic conditions, making special offers a key marketing tool.
But many manufacturers tempted to discount their goods in this way are concerned about possible damage to brand equity.
"Suppliers have a twofold challenge," Paul Gaskell, senior consultant the Value Engineers, the branding consultancy, said.
"Promotions can yield enormous spikes in volume. But they have to get a balance because they can't be in a position where they run promotions all the time."
Just as brand owners are often required to co-fund such initiatives, it is also increasingly the case that they deliver resources supporting retailers' ads in which their products feature.
Danny Donovan, managing director of MediaCom, suggested that Tesco, Asda, Sainsbury's and Morrisons have all employed this model.
"For the big four this makes up a significant chunk of their press ad budgets," he said.
Trade title The Grocer commissioned research firm Ebiquity to analyse expenditure levels in these categories.
Overall, the retailers assessed directed a collective £1.73bn ($2.8bn; €2bn) to TV, press, radio, outdoor and cinema advertising in 2010, a 17% increase measured against 2009.
Brands in the fast-moving consumer goods sector raised their outlay by 7.9% during the same period, posting £1.69bn across the 12 months as a whole.
The UK's ten largest supermarket chains combined expenses climbed by 10.4% compared with 2009, to a total of £417m.
Tesco, the biggest player in this segment, heightened its investment by 9% on an annual basis, lifting budgets to £102m.
Waitrose, a premium supermarket operator, saw an 84% uptick, reaching £22m, as it attempted to enhance price perceptions and leverage tie-ups with chefs Delia Smith and Heston Blumenthal.
Press titles took 52.4% of supermarket spending, with mid-market and tabloid publications receiving a 20% share, rising from 10% in 2007.
Elsewhere, high-street giant Marks & Spencer generated a 59% improvement, particularly focusing on its apparel range, and hit £62m.
"These figures represent a huge shift in power from brand owners to grocery retailers," Richard Buchanan, director at branding agency The Clearing.
According to Buchanan, a vital advantage retailers enjoy is the information yielded by customer transactions and loyalty card programmes.
"Brands are still driving growth in grocery. Even so they've lost power and are one step away from customers as retailers now understand their customers better," he said.
Promotions were a major tactic adopted by supermarkets since the downturn began, and are likely to retain a central role.
"The very aggressive buying strategies of the supermarkets are not going to swing back at any point soon," Claire Wood, an associate planner at the Leith Agency, said.
Shoppers remain in a frugal mood due to uncertain economic conditions, making special offers a key marketing tool.
But many manufacturers tempted to discount their goods in this way are concerned about possible damage to brand equity.
"Suppliers have a twofold challenge," Paul Gaskell, senior consultant the Value Engineers, the branding consultancy, said.
"Promotions can yield enormous spikes in volume. But they have to get a balance because they can't be in a position where they run promotions all the time."
Just as brand owners are often required to co-fund such initiatives, it is also increasingly the case that they deliver resources supporting retailers' ads in which their products feature.
Danny Donovan, managing director of MediaCom, suggested that Tesco, Asda, Sainsbury's and Morrisons have all employed this model.
"For the big four this makes up a significant chunk of their press ad budgets," he said.
Data sourced from The Grocer; additional content by Warc staff
