Interpublic to Compensate Tesco for £3m: Report

14 October 2005

Word on the UK adland grapevine is that Tesco, the nation's largest and richest supermarket group, is about to get richer yet - to the tune of £3 million ($5.3m; €4.4m) - courtesy of the decidedly non-rich Interpublic Group.

Within the environs of London's leafy Sloane and Eccleston Squares, the murmur is that IPG-owned Lowe UK and Initiative Media are discussing possible reparations with Tesco. These relate to previously undisclosed discounts received from media owners and other suppliers, and concern Tesco ad campaigns dating back to 2000.

Tesco's famed strapline sums up the payback rather aptly: "Every little helps."

According to one square-dweller, IPG ceo Michael Roth personally called Tesco marketing director Tim Mason to inform him of the group's intention to return the withheld doscounts.

There is no suggestion that the reparations relate to illegal or improper activity. Roth, however, is determined that IPG demonstrates its "commitment to the integrity of our financial statements and to a new level of transparency".

Both agencies continue to service the Tesco account.

Inevitably, the spotlight also shines on IPG's sibling London shops, McCann Erickson and Universal McCann. It is not known if the duo will make similar restitution to clients and neither was prepared to comment on the matter.

In the six months to June 30, Tesco, which commands over 30% of the UK supermarket sector, bucked the nation's declining retail trend by posting H1 pretax profits of £908 million ($1.64bn; €1.35bn) on sales up 14% to £18.8 billion.

For their part in achieving the latter figure Lowe and Initiative are due a well-deserved bow.

Data sourced from BrandRepublic (UK); additional content by WARC staff