Sainsbury’s, Britvic, Nestlé: Everything that matters this morning

Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.

Sainsburys Asda brand architecture

Sainsbury’s won’t back down over pay dispute

Sainsbury’s won’t back down over a pay dispute which could see workers out of pocket by £400 a year.

Reports suggest some of the chain’s 13,000 staff will be affected if the company’s wage restructure goes ahead.

Sainsbury’s has invested £110m in pay-rises for 93% of its 130,000 shop workers, resulting in a pay increase of 9.3%.

But Sainsbury’s could face legal action from the union ‘Unite’ after the supermarket said it would go ahead with plans to slash paid breaks, annual bonuses and penalty rates on Sundays. This means 7% of Sainsbury’s staff, or about 9,000 people, will suffer an average pay cut of £400 a year.

The supermarket says it will review its policy in March 2020.

READ MORE: Sainsbury’s to cut pay by £400 per year on average for 9,000 staff

Wesfarmers sells struggling retailer Homebase for £1

Australian-based Wesfarmers has sold troubled British DIY chain Homebase for £1.

Wesfarmers, which is one of Australia’s biggest and most successful companies, is predicted to post £200m-£230m in losses after acquiring the hardware chain two years ago.

It has been now purchased by Hilco, a restructuring specialist which saved music chain HMV in 2013. The deal is said to be completed by June.

It is not yet known if any Homebase stores will close as a result of the deal, but it currently employs more than 11,500 across the UK meaning thousands of jobs are at risk. Five Homebase stores closed between July and December last year.

Rob Scott, managing director of Wesfarmers, says the investment has been disappointing, with the problems arising from poor execution post-acquisition being compounded by a deterioration in the macro environment and retail sector in the UK.

READ MORE: DIY retailer Homebase sold at a huge loss for just £1

J2O campaign asks consumers to find their ‘social mojo’

An alpaca named Mojo stars in Britvic’s latest campaign for adult soft drink, J2O

Using the slogan, “find your mojo”, the colourful alpaca will become the face of J2O and J2O Spritz, and will encourage people to seize the moment with his pearls of wisdom.

Through a TV advert Mojo helps a hapless barbecue host with a motivational speech which encourages him to dream big and “master the grill” with the help of J2O.

Brand director for adult socialising at Britvic, Annabelle Cordelli, says: “We all have a fun-loving, social side [and] sometimes we just need someone or something to help bring it out. Mojo’s cheeky one-liners and fun-loving attitude will resonate with our audience, reminding consumers why J2O is at the heart of key social moments at any time of day and at any time of year.”

World Cancer Research Fund highlights link between diet and cancer risk

The World Cancer Research Fund (WCRF) is using seductive footage of models to highlight the link between junk food and increased cancer risk in its new campaign.

The organisation has partnered with renowned photographer and director Rankin to create a series of images and short films, promoting its ‘Cancer Health Check’ – a five-minute test aimed at informing people that diet and cancer risk are linked.

Created by Arthur London and shot by Rankin, the campaign looks like a fashion shoot, however, models are seen flirting with different types of food and drink that increase cancer risk.

Using the tagline, ‘Are you making yourself attractive to cancer?’, the campaign aims to dispel the myth that cancer risk is completely unavoidable when in fact it is linked to lifestyle and diet.

Director of communication and marketing at the WCRF UK, Jane Heath, says: “We are hugely excited about this campaign and what it could achieve. Around one in six deaths annually worldwide are due to cancer. However, we face the issue that the public are tired of hearing what often seem to them contradictory health messages and there is a risk that people are no longer listening.”

The campaign launched last night (24 May) and will run across social media, out of home and press.

Nestlé quizzes consumers about their morning moods

Are you an “AM athlete”, an “early hours snoozer” or a “sunrise chatterbox”? Nestlé is asking consumers what type of morning person they are through its multi-channel integrated seasonal campaign, which pokes fun at the nation’s various morning personality types.

Using consumer conversations and research, the Nescafé team identified six common morning traits that many people will instantly recognise in either themselves, their friends or their colleagues.

They include: The AM athlete, the early hours snoozer, the sunrise chatterbox, the morning zombie, the pre-noon grouch and the morning rusher.

Each of the morning personality types will be brought to life on Channel 4 each morning until September. The quirky adverts will also be shared on Twitter alongside a quiz encouraging its UK viewers to share their own morning personality with friends and family.

“We all know at least one of these morning personalities, that’s what makes this so much fun. We hope our campaign will provoke fun conversations in the office kitchen, cheeky nudges at friends and family online, and hopefully make mornings a bit more fun,” says Annika Adler, senior brand manager for Nescafé Original.

Meanwhile, a series of six limited-edition Nescafé Original jars – each one featuring a morning personality – will hit the supermarket shelves across the UK while 116 Tesco stores will play host to experiential days, celebrating the morning personalities and giving away free personality branded coffee mugs.

Thursday, 24 May

Volvo and Amazon to offer test drives in UK

A partnership between Amazon and Volvo means motorists in the UK can now book test drives through Amazon’s delivery service for the first time.

The Prime Now test drive initiative, which will run for a limited time, allows customers to book a time that works for them, with the car delivered to their home or workplace by a trained expert.

If the customer is interested in purchasing the car following the test drive, they will be directed to their local Volvo dealer.

“At Volvo Cars, we aim to make people’s lives easier. Our ‘Prime Now Test Drive’ offer does just that, allowing potential customers to try our V40 on their terms and in familiar surroundings,” says Jon Wakefield, managing director at Volvo Car UK.

“We’re proud to team up with Amazon to deliver this unique initiative, the first of its kind in the UK and the latest in a range of offerings from Volvo designed to take the hassle out of running a car.”

The offer applies to the Volvo V40 hatchback and is available to customers in London, Birmingham, Manchester and Edinburgh.

Viagra makes UK TV debut

In a UK TV first, an advert for Viagra will air on Channel 4 at 11.15pm this evening (24 May) – marking the first time an ad for a medicine to treat the symptoms of erectile dysfunction has ever been broadcast on British television.

Created by Y&R London, the advert tells the story of a man who is moved to dance after getting his love life back on track, set to Steve Harley’s famous song ‘Make Me Smile (Come Up and See Me)’.

It is the latest development in a wider marketing campaign for the brand, which rolled out across print and outdoor last month.

The brand hopes the campaign will help to “normalise erectile dysfunction and encourage men to seek advice and solutions”.

Samsung to ‘turn off’ millions of TVs

Millions of TV sets across the UK will appear to turn themselves off this weekend as part of a world-first marketing campaign for Samsung, which aims to showcase the evolution of TV and its role within our homes.

The ad, created and produced by Taylor Herring, launches on Friday (25 May) with a 20-second spot which has been designed to trick viewers into thinking their devices have been switched off, leaving a blank screen.

Text will then emerge saying: ‘This is your TV screen…most of the time; a void full of nothing,’ before giving some details about a Samsung TV and its ‘ambient’ technology.

Samsung UK’s marketing director, Rebecca Hirst, says the campaign has been designed to underscore the brand’s messaging “in the most dramatic way possible” to remind the public that their TV is “simply a boring black screen for 90% of the time”.

It will run across 221 TV spots across 18 channels – including ad breaks on ITV, Channel 4 and Sky – and in cinemas throughout the UK during Pearl & Dean’s theme tune.

Sky Sports to run first Indian brand campaigns

Sky Sports is set to launch its first ever Hindi language ad campaign during the Indian Premier League cricket tournament, as it looks to mark a “significant uplift” in British-Asian viewers for the tournament.

Featured brands include luxury property developer Lodha, travel agent Star Tours, mobile provider Lycamobile and Indian channel streaming services Lyca TV and Eros Now. The campaigns are the first for all brands to feature on mainstream TV.

Debarshi Pandit, head of multicultural business at Sky, says: “British-Asians are watching more mainstream channels than ever and this year even more are watching the much anticipated IPL cricket matches.

“The IPL ad breaks this year mark a milestone for ethnic brands. Many brands are missing out on lucrative opportunities by not considering mainstream TV advertising, which provides brand-safety and cost effective targeting to reach the right audiences at the right time.”

TalkTalk slides into the red

TalkTalk, which has been struggling to compete with rivals Sky and BT, has seen its profit wiped out after shouldering a string of turnaround costs.

The company posted a pre-tax loss of £73m for the year ending 31 March, down from a profit of £70m the previous year, after forking out £119m in turnaround costs.

Talk Talk has been struggling to compete with market leaders Sky and BT and has been forced to slash the price of its packages in order to compete, putting further pressure on profits. Around half of its customers are now on one of these low-price deals.

READ MORE: TalkTalk suffers the costs of turnaround plan

Wednesday, 23 May

Marks & Spencer

M&S profits take a hit as it confirms more store closures

Marks & Spencer (M&S) has seen a steep decline in annual profits, after shouldering a one-off charge of £321m to cover the cost of closing and reorganising stores.

Its pre-tax profits dropped by 62% to £66.8m, down from £176.4m the previous year.

M&S confirmed yesterday it will close more than 100 clothing and home stores by 2022 as it looks to become more relevant to customers and take at least a third of sales online.

The struggling retailer has already closed 21 stores, with the next 14 due for closure before the end of next year. Through these closures and a number of relocations, conversions, downsizes and the introduction of concessions, M&S hopes to “radically reshape” its clothing and home space.

Sacha Berendji, retail, operations and property director at M&S, says: “We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans. Closing stores isn’t easy but it is vital for the future of M&S. Where we have closed stores, we are seeing an encouraging number of customers moving to nearby stores and enjoying shopping with us in a better environment, which is why we’re continuing to transform our estate with pace.”

Data from analytics company GlobalData suggests more store closures will mean M&S loses its status as the number one clothing retailer to Primark, unless it can shift consumers online.

Maureen Hinton, group retail research director at GlobalData, says: “Marks & Spencer has dominated the UK clothing market for decades, but its lead as number one is perilously close to being lost to Primark this year. The closure of yet more stores will hasten the decline unless it can shift the lost sales to its online channel and transfer to its other stores. But it also has to start growing total non-food sales to stem the overall decline.

“M&S has been losing share for more than two decades. In 1997 it achieved its peak clothing market share of 13.5% in the UK. Its position seemed unassailable, but since then its market share has been on a declining trend.”

Zuckerberg accused of avoiding questions at European parliament hearing

mark zuckerberg

Mark Zuckerberg has apologised for Facebook’s role in the Cambridge Analytica scandal and the spread of fake news on the platform at a European Parliament hearing but the format of the meeting has been criticised by politians.

During the 90-minute meeting, MEPs fired 60 minutes of questions at him, some of which overlapped, meaning Zuckerberg had just 30 minutes to answer questions and was able to “cherry-pick” which ones he answered.

Conservative MP Damian Collins, who chairs the Commons digital, culture, media and sport select committee, which Zuckerberg has refused three times to appear before, described the hearing as a “missed opportunity”.

“Questions were blatantly dodged on shadow profiles, sharing data between WhatsApp and Facebook, the ability to opt out of political advertising, and the true scale of data abuse on the platform.

“Unfortunately, the format of questioning allowed Mr Zuckerberg to cherry-pick his responses and not respond to each individual point.”

Zuckerberg did say Facbook would follow up with written answers as he acknowledged there were “a lot of specific questions that I didn’t get round to answering”.

READ MORE: Complaints that Zuckerberg ‘avoided questions’ at European parliament

Man Utd tops list of most valuable European football clubs

Manchester United is worth €3.25bn (£2.9bn), making it the most valuable European football club, putting it ahead of Real Madrid (€2.92bn), Barcelona (€2.78bn) and Bayern Munich (€2.55bn).

The study by KPMG is based on profitability, broadcasting rights, popularity, sporting potential and stadium value, to give an ‘enterprise value’.

In the analysis of 32 major teams, six Premier League clubs have made it to the top 10. Manchester City (€2.16bn), Arsenal (€2.10bn), Chelsea (€1.76bn) and Liverpool (€1.58bn) take places five to eight, followed by Juventus (€1.30bn) and Tottenham (€1.29bn).

West Ham, Leicester City and Everton also made it into the top 20.

The study looked at the 2015-16 and 2016-17 seasons, during which time Manchester United won the FA Cup, League Cup and Europa League, but the club failed to pick up a trophy this season.

READ MORE: Manchester United ‘remains most valuable club in Europe’

New standard for broadband ads introduced

Brands advertising broadband speeds will face tougher regulation from today as the Advertising Standards Authority (ASA) looks to clamp down of misleading claims and make it easier for consumers when making a decision.

From now on all numerical speed claims must be based on the download speed available to at least 50% of customers at peak time (8pm-10pm) and described in ads as “average”. Previously, broadband providers could advertise “up to” speeds were if they were available to at least 10% of customers. The new standard applies to ads across all media including online and social.

To help consumers better understand what might affect the broadband speed they actually get, the new standard also recommends advertisers promote speed-checking facilities, such as those provided on internet service providers’ (ISPs’) websites in ads wherever possible.

Guy Parker, CEO of the ASA, says: “From today, consumers will see a difference in broadband ads that make claims about speed as this new, tougher, standard is enforced. We’ll be making sure consumers aren’t misled by speed claims in ads, not least because choosing the right broadband deal has become such an important part of running a household or business.”

Food industry fails to hit sugar reduction target

unhealthy food ad rules
Just three food categories have hit their target of cutting sugar by 5% over the past year, according to a progress report by Public Health England (PHE).

Of the eight food groups measured just sweet spreads and sauces, yogurts and fromage frais, and breakfast cereals have achieved the target reduction. There has been no sugar reduction in biscuits and chocolate bars, although people are consuming less as they have become smaller. Puddings, however, have actually become sweeter.

PHE wants manufacturers to cut the amount of sugar in products we buy to take home and eat in cafes by 20% by 2020, with 5% in the first year. The report shows food manufacturers and supermarkets have cut out 2% over the first 12 months, but some categories and companies are doing more than others.

READ MORE: Food industry in England fails to meet sugar reduction target

Tuesday, 22 May

sky

Government paves way for Comcast’s Sky takeover bid

American company Comcast is unlikely to face a regulatory review of its £22bn takeover bid for Sky — removing a huge hurdle in the group’s plan to acquire the media group.

Culture Secretary Matt Hancock says he is “not minded” to refer the bid to the Competition and Markets Authority (CMA). Hancock says he did not believe the proposed merger raises any public interest concerns “which would meet the threshold for intervention”.

The decision will not be welcomed by Rupert Murdoch, whose company 21st Century Fox is also trying to buy Sky. 21st Century Fox has faced questions over competition and is still waiting for the government to say whether it should be allowed to buy Sky.

Hancock says he will give interested parties until 5pm on 24 May to respond to this annoucement. His final decision on whether Comcast should be reviewed by the CMA is due by 4 June.

READ MORE: UK likely to clear way for Comcast to bid for Sky

M&S hires new talent to the board increasing gender balance

Marks & Spencer

Marks & Spencer has appointed two women as independent directors, increasing its female board representation to almost 45%.

Katie Bickerstaffe and Pip McCrostie have joined the high street retailer’s board as non-executives. Bickerstaffe was previously the UK and Ireland chief executive for Dixons Carphone, while McCrostie spent 29 years at EY most recently as global leader of corporate finance. 

The addition means M&S is doubling its female representation from two to four women on its nine-strong board.

READ MORE: Another reshuffle at Marks & Spencer as former Dixons chief exec Katie Bickerstaffe is appointed to the board

MPs criticise Sainsbury’s cut in staff pay

Sainsbury's

More than 100 MPs have signed a letter criticising Sainsbury’s for proposing a cut in staff pay after its merger with Asda.

MPs have written to the prime minister, urging her to take action over proposed changes to contracts at Sainsbury’s after the retailer said it wants to equalise pay among its employees.

The letter, written by Labour’s Siobhain McDonagh and signed by MPs including shadow business secretary Rebecca Long-Bailey, claims the new pay deal could lead to as many as 13,000 Sainsbury’s employees losing up to £3,000 per year.

Sainsbury’s is already facing a parliamentary enquiry over its merger with Asda.

READ MORE: Sainsbury’s tie-up under new scrutiny

Sony buys EMI Music Publishing for £1.4bn

Sony is to buy EMI Music Publishing in a £1.4bn ($1.9bn) deal, as it looks to become “one of the biggest music publishing companies”.

The purchase will add a catalogue of more than two million songs to Sony’s books, including artists both old and new such as Queen and Pharrell Williams.

The agreement marks CEO Kenichiro Yoshida’s first major deal since he joined last month.

He says :“[Sony] is becoming one of the biggest music publishing companies, both in name and reality and I believe this acquisition will be a particularly significant milestone for our long-term growth.” 

Yoshida also notes that the music business has enjoyed a “resurgence” in recent years thanks to streaming services such as Spotify.

READ MORE: Sony buys controlling stake in EMI record label

Google accused of failing to protect rape victims

Google is helping users find the identity of rape victims whose anonymity is protected by law, according to a report by The Times.

Searches for attackers and alleged attackers automatically reveal the names of women involved in the case and vice versa with names of victims also flagging up their alleged abusers identity.

This includes identity of vulnerable defendants who are protected with anonymity by law. The error is a result of Google’s ‘related search’ and ‘autocomplete’ functions but will be a blow to the tech giant over rules of privacy.

READ MORE: Google ‘identifies rape victims’

Monday 21 May 

ryanair

Ryanair profits surge 10% despite turbulent year

Ryanair profits rose by 10% to €1.45bn in the full year to 31 March 2018, despite the budget airline experiencing one of its most turbulent years to date.

Revenue rose by 8% to €7.151bn as the number of passengers swelled by 9% to 130 million, helping Ryanair reach 95% capacity. The growth in revenue comes even after the airline reduced fares by 3%, to an average cost of €39.40.

In a statement CEO Michael O’Leary described these results as an indication Ryanair has recovered from the “September 2017 rostering management failure”, which saw the airline cancel flights affecting more than 700,000 customers and engage in a dispute with pilots over pay and conditions.

During the period Ryanair created 1,500 new jobs and grew its Ryanair Labs arm. There are currently three Ryanair Labs development offices in Dublin, Madrid and Wroclaw in Poland, employing a total of 600 digital specialists.

The company reports that Ryanair Labs, which is designed to deliver improvements in customer service, mobile and digital platforms, helped increase ancillary spend by 4% per guest to over €2bn. Ancillary spend, such as passengers paying for reserved seating, priority boarding and car hire, currently accounts for 28% of revenue.

There are now 43 million people signed up to MyRyanair membership, while the airline’s website and app has over 1 billion visits a year.

Bracing itself for a “hard Brexit”, however, the airline describes its outlook for 2019 as the “pessimistic side of cautious”. The company expects to grow traffic by 7% to 139 million, in the face of rising staff costs and oil prices.

Marks & Spencer poised to reveal further store closures

Marks & Spencer

Marks & Spencer (M&S) is set to reveal which stores will face the chop as the retailer progresses with its plan to close 100 large clothing and food shops following weak sales and profits.

The high street retailer has already closed 20 under-performing stores across the UK, affecting 900 jobs, as part of a restructuring plan announced 18 months ago to slash the amount of floor space devoted to clothing as sales move online. This news follows the departure of marketing boss Patrick Bousquet-Chavanne in April.

Six months ago new company chairman Archie Norman stated his aim to speed up the store changes and revitalise the food business, after claiming M&S has been “drifting” for more than 15 years.

According to reports in the Guardian, analysts expect M&S to report a second year of falling profits, down from £614m in 2017 to £573m, when its annual results are presented on Wednesday. Furthermore, clothing and home like-for-like sales are predicted to decrease by 1.1%, with food sales down 0.2%.

READ MORE: Marks & Spencer to reveal dozens of store closures

Co-op members vote 96% in favour of responsible advertising

Coop

Some 96% of members have voted in favour of the Co-operative Group reviewing its current advertising policy in response to concern some UK media outlets are fuelling a rise in hate crime.

The decision at the Co-operative Group’s annual general meeting (AGM) on 19 May comes as a result of concerns raised by the United Nations, and activist organisations such as Stop Funding Hate, that various media outlets are legitimising prejudice.

As far back as 2015 the United Nations described it as “deeply shameful” that the UK press has used racism and xenophobia in order to “sell newspapers”. Speaking at the Co-operative Group’s AGM, Stop Funding Hate board member Colin Baines singled out The Sun, Daily Mail and Express for specific criticism.

The Co-operative Group’s response to the issues raised is to introduce an advertising policy that “challenges those views expressed in print which we and many of our members believe are incompatible with our values”, with the group pledging to use its “contacts with publishers at every level to make the case for change”.

The board is being asked to review the current advertising policy and report to members on the specific issues publications have been engaged on, the impact of this engagement and how the impact is monitored. If the board is unable to report the impact the Co-operative Group will ask it to prepare an ethical advertising policy that puts controls in place to ensure adverts do not appear in media that is “incompatible” with its ethics, values and principles.

Progress will be reported at the group’s next AGM in 2019.

Sky launches campaign to support women’s sport

Womens sport

Sky Sports has teamed up with the Women’s Sport Trust on a new campaign to encourage Britain to support women’s sport by watching, attending or playing.

Launched yesterday (20 May), the multi-platform #ShowUp campaign will support the diverse range of women working in sport, both on the field and off.

Today the Sky Sports Mix channel will dedicate the entire day of programming to women’s sport, with a special #ShowUp collection available on-demand. Sky is also giving away 5,000 tickets to women’s sports events this year to encourage attendance as part of its Sky VIP loyalty programme.

The campaign is asking athletes, fans and the general public to pledge their support using #ShowUp across social media to document their experiences of women in sport. Recipients of thousands of free #ShowUp hairbands are also being encouraged to share pictures of their hairbands on social.

GoCompare pushes for all-female shortlist for new CMO

Price comparison site GoCompare has asked headhunters to select a female-only shortlist to fill its ongoing CMO vacancy.

This is part of the wave of new measures the company is implementing to attract more female staff, including introducing a blind CV process where details such as the applicant’s name, age and schooling are removed. The price comparison company is also using software to scan its job adverts for any bias.

GoCompare is expected to report its gender pay gap figures in 2019 following its acquisition of MyVoucherCodes in December for £36.5m, which takes the number of staff working across the group to more than 250.

READ MORE: GoCompare introduces all-female shortlists and cuts names from CVs to beat gender bias

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