H&M, energy drinks, Public Health England: Everything that matters this morning

Catch up on all the important marketing news from the last 24 hours with our morning round-up.

H&M shop window

H&M revenues up but weak in-store sales impact fourth quarter

H&M group saw sales increase by 4% to SEK231m (£222.8m) in its financial year ending 30 November. However, sales were down by 4% in the fourth quarter, “significantly below” the company’s own expectations.

The company credited the rise for strong online sales of the H&M brand and continued development of its other brand. However, it admitted that the fourth quarter in particular was “weak” for physical stores, which were impacted by reduced footfall and challenging market conditions. H&M now plans to accelerate its transformation, better integrating its physical and digital stores while also closing more stores and opening fewer.

Soft drinks industry dismisses renewed calls for ban on selling energy drinks to under-16s

The soft drinks industry has rebuffed calls for a ban on selling energy drinks to people aged under 16, saying the codes of practice already in place are vigorous enough.

The comments come after a study, carried out by researchers at Action on Sugar and published in the journal BMJ Open, analysed sugar, caffeine and carbohydrate content of energy drinks. It found that the average sugar content was more than the entire recommended daily maximum for an adult in the UK, leading to the calls for a ban.

“This study illustrates the huge contribution of energy drinks to sugar intake, which is linked to the development of obesity and various types of cancer, as well as type 2 diabetes and rotting our children’s teeth. They are completely inappropriate for children to consume, form no part of a healthy balanced diet, and should be banned for under-16s,” says the campaign group’s chairman and professor of cardiovascular medicine at Queen Mary University of London, Graham MacGregor.

However, the British Soft Drinks Association counters by saying there is already a voluntary code of practice that states most high caffeine soft drinks should not be promoted or marketed to those under 16, that the vast majority of product lines offer a low sugar variant, and that all energy drinks already carry an advisory note stating ‘Not recommended for children’.

Gavin Partington, director general of the BSDA, says: “Energy drinks and their ingredients have been deemed safe by regulatory authorities around the world.
“As an industry we recognise we have a role to play in helping consumers make informed choices which is why in 2010 we introduced a voluntary Code of Practice stating that high caffeine soft drinks should not be promoted or marketed to those under 16.”

Public Health England teams up with Durex for campaign to encourage condom use among 16- to 24-year-olds

Public Health England has teamed up with a number of partners including Durext, BASHH and the FPA for a campaign that looks to reduce the instances of sexually transmitted infections (STI) by encouraging condom use among young people. The campaign is the first of its type to target those aged 16 to 24 for eight years and comes after new research revealed that nearly six in 10 chlamydia and gonorrhoea diagnoses in 2016 were people in this age group.

The campaign will run across social and digital platforms including Instagram Stories and Snapchat Filters and feature real people talking about their personal experience of having an STI. Individuals will not be revealed, with their faces replaced by animal emojis. A PR push will include brands such as Durex as well as the bodies such as the Family Planning Association and the British Association for Sexual Health and HIV.

The campaign aims to change perceptions around condoms after a YouGov survey found that 47% of sexually active young people have had sex with someone new for the first time without using a condom while one in 10 say they never use a condom.

Sheila Mitchell, marketing director at Public Health England, says: “We’re really pleased to be launching ‘Protect Against STIs’, the first national public health campaign in eight 8 years and with the support of our partners across the country, this will help us bring the discussion of using condoms higher up the agenda for young people.”

Facebook overhauls video ad strategy

Facebook is changing its video ad strategy, allowing publishers to run pre-roll ads despite its previous reluctance to put ads in front of videos because it thought it might put off viewers. The social network plans to test pre-roll on videos that come under its ‘watch’ tab and in other places where users are “intentionally watching video”. That means pre-rolls won’t be seen in videos that appear in the news feed among friend updates.

The trial starts in early 2018 with six-second clips, with Facebook studying the results to analyse what works best for different audiences and videos. There are also plans for changes to how videos are prioritised in news feed to increase distribution of videos people are searching for and to keep people coming back to watch video on a more regular basis.

However, the changes risk increasing tensions with publishers already frustrated at how little money they earn from the platform. Earlier this week, Buzzfeed CEO Jonah Peretti called out both Facebook and Google for taking the vast majority of ad revenues.

READ MORE: Facebook will try running ads in front of Watch videos

Fresh fruit and booze drive grocery sales

Shoppers in the UK spend £176.4m more on fresh fruit in 2017 than the previous year, while sales of spirits and free-from products also soared. Sales of spirits hit £152.3m, while items without gluten or diary increased to £146.6m. Sparkling wine also proved popular, with consumers spending an extra £80.3m this year, as did bottled water and ale and stout.

The figures show a contrasting top 10, with a focus on health eating but also alcohol. The fastest growing product of the year was Budweiser, ahead of the energy drink Monster, avocadoes and Barefoot wine.

“Supermarkets have done a good job at protecting shoppers from the brunt of rising costs, however, it’s still been an anxious year for households about their grocery bills,” says Ian Mansley, Nielsen’s head of grocery analytics.

“Despite rising prices, shoppers still want to treat themselves with good quality and healthier food but also indulging and enjoying oneself by drinking and dining more at home, particularly if households look to cut costs by not going out as much.”

Thursday, 14 December

Tesco threatened with legal action for using ‘fake farm’ branding

You might have seen quaint farm brands at the major supermarkets, which make you feel slightly smug about buying British meat from small-scale producers. Well, prepare to have your illusions shattered.

Tesco, Aldi, Asda and Lidl are being urged to stop using controversial “fake farm” branding on own-brand meat products, with a food charity claiming they are misleading shoppers.

The Feedback charity is backing the owner of a genuine farm called Woodside Farm – a name Tesco has also used on its value pork range since 2016 – and is threatening legal proceedings if the retail giant does not drop the name Woodside Farms.

Its “Total Bull” campaign says it believes shoppers are being misled with “disingenuous” branding that gives the impression it comes from real farms.

“Let’s be clear – supermarkets are selling meat under fake farm names, deliberately encouraging consumers to believe that the meat is sourced from small-scale producers,” said Feedback’s campaign director, Jessica Sinclair Taylor. “We believe this is peddling a load of bull.”

Marketing Week columnist Mark Ritson has previously spoken out about Tesco’s fake farms causing a “real headache” for its own-label strategy.

READ MORE: Tesco faces legal threat over marketing its food with ‘fake farm’ names

ASA confirms commitment to introduce new rules on gender stereotyping

TV ad stereotyping

Earlier this year, the Advertising Standards Authority released a damning report which found that advertising affects people’s expectations of how others should “look or behave” according to their gender.

The review examined gender stereotyping across several areas, including body image, objectification, sexualisation and gender characteristics and roles.

At the time, the regulator said a tougher line was needed on ads that feature stereotypical gender roles or characteristics that could potentially cause harm, including ads that mock people for not conforming to gender stereotypes.

The ASA has now confirmed plans to introduce new rules in 2018. The Committees of Advertising Practice, which writes the advertising codes, will draw up new standards following the review, but said it was now developing a rule and guidance to help advertisers “know where to draw the line”.

For example, not all ads featuring women cleaning or men doing DIY will be seen as problematic. However, ads showing women having sole responsibility for cleaning up their family’s mess or men trying and failing to undertake simple parental or household tasks might be.

Facebook claims Russia spent 75p on ads during Brexit campaign

Another day, another headline for Facebook. This time it has had to face down claims of Russia meddling in the run up to the EU referendum. But the social media giant says it has found just three adverts posted by Russian accounts.

In a letter to the commission, Facebook said the trio of adverts had cost less than $1 (75p) in total to post and had been seen by no more than 200 UK-based viewers over a four-day period.

It added that the three adverts were in fact probably aimed at US viewers, and concerned immigration rather than the EU referendum directly.

“We strongly support the Commission’s efforts to regulate and enforce political campaign finance rules in the United Kingdom, and we take the Commission’s request very seriously,” wrote a Facebook spokesperson in the letter.

This follows the revelation that Russia-funded adverts placed on Facebook aiming to influence the US presidential election last year could have reached up to 126m Americans, according to a testimony prepared by the company for the Senate judiciary committee in October.

READ MORE: Facebook says no more than 200 UK viewers saw Russia’s Brexit ads

Water suppliers face tough new regulation to lower bills

Water regulator Ofwat has hit water suppliers with the industry’s toughest price control since privatisation to force household bills down.

Ofwat will shave at least £15 to £25 a year from the average water bill in the first half of the next decade by tightening the screws on water companies, whose revenues rely on the regulator’s approval.

Ofwat’s outgoing chief executive, Cathryn Ross, said the blueprint would push water companies to deliver more for customers through to 2025.

“We’ve said many times already that this will be a tough price review for companies. We will cut the financing costs they can recover from customers and, with this lower guaranteed return, they will need to be more efficient and innovative than ever before,” she said.

READ MORE: Water suppliers hit with toughest ever regulation in a bid to lower bills

Diageo renews commitment to fighting drink driving

Drinks giant Diageo, which owns brands such as Johnnie Walker and Smirnoff, has secured over 5 million pledges from consumers to never drink and drive through its global Johnnie Walker #JoinThePact programme.

It has beat its target a year ahead of its goal, and has now announced a tenfold increase in its next target, aiming to secure 50 million pledges by 2025 – with 2 million pledges already secured towards this goal thanks to recent activity in India.

Diageo started the #JoinThePact campaign in 2008 as part of its efforts to tackle drink driving around the world. The target of 5 million pledges has been reached early thanks to a global effort to secure pledges, with the #JoinThePact campaign already activated in over forty countries across five continents.

Meanwhile, over the Christmas period, Diageo GB is partnering with UK pub company Ei Group to encourage customers to make a pledge to never drink and drive and provide safe rides home over the festive period. The activity is timed to support the Department for Transport’s annual THINK! road safety campaign.

Wednesday 13 December

Disney tipped to buy Fox, including Sky shares

The long-running saga of Rupert Murdoch’s attempted buyout of Sky could be drawing to a close, with Disney instead buying the whole of his 21st Century Fox group, including the 39% of Sky it currently owns. A deal could be agreed before the end of this week, according to reports in the Financial Times and CNBC, thought to be worth around $60bn (£45bn). Disney would also acquire the 20th Century Fox movie studio and US broadcast network Fox as part of the deal.

Disney is still expected to pursue a purchase of the remainder of Sky’s shares, with less anticipated regulatory difficulty than Murdoch faced. 21st Century Fox’s bid to buy Sky in full is curently being assessed by the Competition and Markets Authority to determine whether Murdoch’s ownership of UK media companies would be too concentrated.

A 2011 bid fell apart when Murdoch’s News International operation, now known as News UK, was hit by the phone hacking scandal and subsequent closure of News of the World newspaper.

READ MORE: Disney set to seal $60bn 21st Century Fox takeover

Brands warn of Brexit counterfeiting threat

The deal between the UK and EU on the future of the border between Northern Ireland and the Republic of Ireland may be the most palatable outcome politically, but there is concern the new arrangements may create a market for criminals seeking to move goods between the two countries while bypassing the intellectual property rights of brands.

The UK’s Anti-Counterfeiting Group (ACG), which represents brands from across industries, has demanded that consumers and businesses be protected from fake or unauthorised products under the new regime. While it seems clear neither the UK nor Ireland intends to enforce customs checks at the border, uncertainty remains about exactly which regulations relating to brand licensing and ownership the UK and EU will share after Brexit.

“ACG members insist that the UK government must seek to fully protect UK businesses by ensuring that criminals are unable to use the ‘free border’ to rob us of our vital intellectual property rights and assets, which are essential to the UK economy,” the group says.

Negotiations on the border proved politically delicate, with the UK government unwilling to give Northern Ireland different customs requirements from the rest of the UK, while also avoiding a hard border that could reignite conflict between unionists and nationalists, or creating an open smuggling route.

Facebook responds to claims it is ‘ripping society apart’

Facebook has released a statement defending itself against the comments of a former employee who criticised the company for building tools that worsen social divisions. Former vice-president of user growth Chamath Palihapitiya suggested Facebook’s algorithms surface content that users want to see, regardless of its truth or harmfulness, to increase engagement.

“The short-term, dopamine-driven feedback loops we’ve created are destroying how society works,” he added in a speech last month that was reported by The Verge on Monday.

Facebook has responded by acknowledging some of Palihapitiya’s criticisms of its historical behaviour, but said he had not worked there for six years. “When Chamath was at Facebook we were focused on building new social media experiences and growing Facebook around the world. Facebook was a very different company back then and as we have grown we have realised how our responsibilities have grown too.”

The statement continued: “We’ve done a lot of work and research with outside experts and academics to understand the effects of our service on well-being, and we’re using it to inform our product development.”

READ MORE: Facebook hits back at former executive Chamath Palihapitiya

Dixons Carphone profits drop 60%, as it announces new model for mobile business

Dixons Carphone

Consumer electronics retail group Dixons Carphone, whose brands include Carphone Warehouse and Currys PC World, has announced a sharp drop in profits in its latest half-year figures, and says it will “reposition” its mobile phone business in response to its struggling profitability. While details are scant, it says it will make the division “simpler” and “less capital-intensive”, which could mean closing Carphone Warehouse stores and focusing increasingly on online sales.

Despite these struggles, Dixons Carphone says the profit slump was due mainly to one-off charges and that its performance in electricals remains strong, “growing revenues, profitability and market share”. It also claimed a positive start to the Christmas period with record Black Friday sales in all its markets.

READ MORE: Dixons Carphone to ‘simplify’ challenging mobile phone business

York bans Uber, putting UK future in further doubt

York has become the latest UK city to refuse Uber’s application to operate private-hire cars, following London and Sheffield, in a move that casts further doubt on whether the brand has any future in the UK. York council’s gambling, licensing and regulatory committee met to consider the application last night, but refused it partly on the grounds of Uber’s recently revealed cover-up of a 2016 data breach, the Telegraph reports.

Uber’s licence in York expires on Christmas Eve, and it has yet to decide how to respond. The company continues to operate in London while it appeals to the courts against Transport for London’s decision not to renew its expiring licence, after finding it was not a “fit and proper” operator. Those hearings commenced this week, but are not expected to be resolved until at least the spring of 2018.

READ MORE: 2017 year in review: It’s been a bad year for…

Tuesday 12 December 

NFL

Verizon renews $2.25bn NFL deal

Verizon has renewed its mobile streaming partnership with the NFL in the US in a deal worth $2.25bn over five years.

The arrangement means that the NFL cannot sell its mobile rights to digital platforms like Amazon, Twitter, Facebook and YouTube. However, Verizon has the rights to stream games to its Go90 mobile video app and Yahoo Sports arm. Verizon will stream national pre-season games, regular season games, playoff games and the Super Bowl to mobile phones, regardless of network.

The ability to stream NFL games continues to be a lucrative proposition brands are happy to compete for. Prior to its acquisition by Verizon, Yahoo paid $20m to stream a single game in 2015, while earlier this year Amazon paid $50m for the rights to stream just the Thursday night NFL games.

READ MORE: Verizon renews NFL deal 

SMEs face up to £17.6m fines if they fail to prepare for GDPR

Three-quarters of Britain’s small and medium-sized businesses (SMEs) could be fined up to €20m (£17.6m), or 4% of their annual global turnover, if they fail to prepare for GDPR.

According to a survey from bank Close Brothers, just one in four British SMEs have begun to prepare for the introduction of the new EU data laws in May, risking hefty fines. The research also suggests that just one in three SMEs are currently aware of GDPR’s implications. According to the study a major problem is that many small firms do not have a clear idea of what data they currently hold.

The number of fines for data protection breaches rose from 18 in 2015 to 35 in 2016, at a total cost of £3.2m, according to figures published by the Information Commissioner’s Office (ICO).

READ MORE: Three out of four small and medium-sized businesses not ready for new data laws face huge fines

Aldi backs local sourcing with Scottish suppliers scheme

Aldi

Aldi has launched a scheme to boost the profile of small-scale Scottish producers as it seeks to harness the continuing demand for local sourcing.

Producers chosen to take part in the Scottish Small Supplier Development Programme will have their Scottish origins marked out on the packaging with the Saltire and the chosen suppliers will also receive subsidised costs and assistance from Aldi’s quality assurance team. Each supplier is accepted onto the programme by merit and there is no fixed limit to the number of producers who can be accepted.

Aldi is keen to ramp up its investment in Scotland, announcing in May plans to increase its range of Scottish products from 350 to 400 by 2019. The discounter’s range is currently made up of 30% Scottish produce.

READ MORE: Aldi launches scheme to boost small-scale Scottish suppliers

Ryanair faces potential Christmas strike action

Ryanair flights to and from Dublin could be disrupted by strikes over Christmas as the airline’s Irish pilots vote for industrial action. The news follows on from similar ballots taken by pilots in Italy and Portugal over the past week.

The majority of pilots who voted were captains and without them on board planes cannot fly. The nature of the industrial action will be decided today, highlighting the worsening relationship between Ryanair and its pilots.

In September Ryanair cancelled more than 2,000 flights, admitting it had “messed up” over its pilots’ holiday roster. Then CEO Michael O’Leary was forced to apologise to the airline’s 4,200 pilots after saying they were “full of their own self-importance” for being unhappy with their treatment.

While the pilots feel they are in a strong position to fight the airline, arguing that it is short of qualified captains and first officers, Ryanair says it is recruiting pilots and there is no threat of a shortage.

READ MORE: Ryanair’s Dublin pilots threaten Christmas strike

Nestlé commits to tackling food waste

nestle kitkat

Nestlé UK and Ireland is committing to tackle the food waste crisis with a new partnership aimed at redistributing more surplus food for charitable and commercial use.

The company has teamed up with surplus food re-distributor Company Shop and circular economy experts WRAP to conduct detailed site assessments that will identify any opportunity to reduce food waste at source and find new ways to distribute part-processed products.

According to Nestlé, after being tested at a number of its factories the new scheme has proved to be an economically sustainable way to tackle operational food waste and will increase the charitable redistribution from its UK operations by two million meals per year.

READ MORE: Nestlé aims to tackle food waste with new UK and Ireland initiative

Monday 11 December 

Apple eyes £300m Shazam deal

Apple is on the verge of acquiring music recognition app Shazam for “nine figures” with estimates suggesting it will be around the £300m mark, according to reports in TechCrunch.

The potential price of the deal is significantly lower than Shazam’s most recent valuation of $1bn.

Shazam enables users to identify the name of songs and other media playing around them using the app. People are then able to buy the song from the iTunes store, which earns Shazam a referral commission. The move will effectively cut out the middle man for Apple.

Shazam launched in 1999 and was originally a text service.

READ MORE: Sources – Apple is acquiring music recognition app Shazam

Uber prepares for first London court hearing

uber

Uber’s first court hearing with Transport for London (TfL) is due to take place at Westminster Magistrates court today (11 December).

The legal battle will determine whether it is able to continue to operate in the capital. The preliminary hearing this week will lay out plans for the full case next year.

TfL said it would not renew Uber’s licence as it deemed the company not “fit and proper”. Uber lodged an appeal against the decision, and it can continue to operate until the matter is resolved.

READ MORE: Uber’s London licence appeal against TfL is set for first court hearing

Nissan takes on Google with ‘robotaxi’ trial

Nissan is set to starting trialling self-driving cars in Japan next year, in a move that will take on Google’s Waymo.

Nissan is teaming up with Japanese tech company DeNA Co to test ‘robotaxi’ brand Easy Ride, with a view to launch the ride-hailing service in the early 2020s, with completely driverless vehicles to be in operation by 2022.

Waymo began testing its driverless vehicles in Arizona in October, while Uber has said it will bring flying taxis to LA by 2020.

READ MORE: Nissan’s robotaxi field-test to be challenge to Waymo

2017 on track to be worst year for consumer spending since 2012

Consumer spending declined for a third consecutive month in November, meaning this year is likely to be the worst for spending in the UK since 2012, according to data from Visa.

It shows household spending is 0.9% down this November compared to 2016, following a 2.1% drop in October.

High street spending has also fallen for the seventh month in a row by a total of 3.5%. It follows a 5.1% last month and is one of the largest monthly declines over the past five years.

READ MORE: 2017 set to be worst year for UK consumer spending since 2012, Visa says

Government urged to improve digital skills for SMEs

The digital skills shortage in small businesses is at risk of stalling productivity, according to the Federation of Small Businesses (FSB), which has called on the government to step in.

More than a quarter of business owners in England apparently lack confidence in their basic digital skills, while more than a fifth (22%) believe the lack of basic digital knowledge among their employees is preventing them from increasing their online presence.

The FSB says many small businesses will be left behind as a result and has called for the National Retraining Scheme, which helps adults retrain for new jobs, to be redesigned to accommodate smaller firms too.

Mike Cherry, FSB chairman said: “[We need to] make sure that small businesses and their staff can access basic digital skills training that meets their needs through initiatives like the National Retraining Scheme.

“If we can harness the digital potential of small firms, we stand a real chance of creating more world-beating businesses and boosting growth.”

READ MORE: Business group warns on UK’s digital skills gap

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