Safeway Splits With Longtime Agency Dailey, Opens Review

Says It May Divide $200 Million Account Between Multiple Shops

By Published on .

COLUMBUS, Ohio (AdAge.com) -- As it tries to stay above the price-war fray sweeping the grocery industry, Safeway is tossing its $200 million account in review and ending nearly a decade-long relationship with Interpublic's Dailey & Associates, West Hollywood, Calif.
Dailey's work for Safeway helped fuel a sales turnaround for the 1,771-store chain.
Dailey's work for Safeway helped fuel a sales turnaround for the 1,771-store chain.

The move comes a little more than a year after Dailey helped Safeway reposition itself in the marketplace with the tagline "Ingredients for Life," credited with raising brand awareness and fueling the second year of a turnaround at the Pleasanton, Calif., chain.

'Never forever'
"Agency relationships are never forever," said Michael Minasi, senior VP-marketing at the $38 billion chain of 1,771 stores. "There's always a point where you want to change and move into a new direction."

The review is being handled by Boston-based Pile & Co. Dailey will not participate, but will handle the account through the end of the year.

Mr. Minasi said that strategy has not changed and will not. "We believe we need to evolve the campaign and the end of 2006 is a natural break in the action to evolve it to a different level."

Mr. Minasi said the repositioning campaign was successful and 12-month brand awareness and recall studies since the campaign launched in April 2005 tracked higher. Dailey has "done a great job," he added. "Ours is an incredibly complex account and we really believe at this point it's an opportunity to move in an entirely direction."

Sales on the rise since campaign
In 2005, Safeway's sales rose 7.2% to $38.4 billion and comparable-store sales climbed 4.6% for the year. The chain posted two years of red ink in 2002 and 2003.

Safeway began working with Dailey in 1997 following its acquisition of regional grocery-store chain Vons. The shop eventually was awarded the retailer's entire broadcast creative and media account.

Mr. Minasi said the retailer is looking at a long list of potential candidates, but would not disclose names. The former Toys 'R' Us executive, however, said he would not dip into the agency roster from his days at the toy retailer because "nearly a decade had passed."

CMO Brian Cornell
Safeway Chief Marketing Officer Brian Cornell is not so far removed; before joining Safeway two years ago he served as president of PepsiCo's North America food-services division, where he previously held marketing positions as well. "He certainly has agency relationships from those days," Mr. Minasi said.

Mr. Minasi said he is not ruling out splitting the account between multiple agencies or even separating the media planning and buying. "We also have a large in-house group," he added. "We are still not sure on how we will structure this relationship. It's very early in the process."
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