The Grocer magazine ran an article last week highlighting a 9% drop in sales value for Hovis in the year to 19 February 2011. The report points out that this coincided with a decision by the brand to reduce advertising spend by 14%.
Marketing sceptics may suggest this is just be a coincidence, but in reality it’s yet another piece of evidence of the strong relationship between investment in good marketing and sales. There is a big difference between identifying and reducing / redirecting waste and just wholesale budget cutting.
I don’t know what the margins are on bread, but at the topline level, if my maths is correct, the drop in retail sales was £40M, the saving in advertising was £0.5M!