Tesco, Facebook, McDonald’s: 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.

Tesco sales up 3.5% in the first quarter

Tesco’s like-for-like sales for the UK and Ireland rose 3.5% during the first quarter of 2018/19, with group sales increasing by 1.8%.

During the period Tesco continued the process of re-launching over 10,000 own brand products, with 2,850 ranges completed to date, ramping up investment in its exclusive fresh food brands.

The supermarket also hailed the closure on 22 May of its non-food website Tesco Direct as an “essential step towards establishing a more sustainable non-food offer”.

Like-for-like sales at food wholesale Booker, acquired by Tesco for £4bn on 5 March, rose by 14.3% during the first quarter. More than 3,000 Booker products are now fulfilled from Tesco’s distribution centre in Magor, Wales. Tesco described the “positive initial response” to the introduction of a Booker wholesale store for professional caters – known as ‘Chef Central’ – at its Bar Hill supermarket in Cambridge.

The supermarket also reported progress in its foreign markets, with like-for-like sales of its fresh food up 1% in Central Europe and 4.5% in Asia.

“Our growth plans are on track and we are pleased with the momentum in the business,” said chief executive Dave Lewis.

“We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions. We are delighted with initial progress on Booker and are focused on delivering the synergy benefits that our merger brings.”

Facebook head of communications steps down after a decade

Facebook’s head of communications and public policy Elliot Schrage is to step down after a decade at the social media giant.

Schrage led the company through the fallout of the recent data privacy scandal, following revelations that data from 87 million Facebook users had been harvested by political consultancy Cambridge Analytica. He is expected to stay on as an adviser to his successor and assist with “special projects”, with no immediate plans to take on a new role.

It is thought Schrage had originally wanted to leave in 2016 ahead of the US presidential election, but was persuaded to stay on by Facebook CEO Mark Zuckerberg. He previously served as vice president of global communications and public affairs at Google from 2000 to 2008.

Schrage is the third high-level executive to announce their departure from Facebook this year. In April Jan Koum, co-founder and chief executive of Facebook-owned WhatsApp resigned, while chief security officer Alex Stamos is expected to leave in August.

READ MORE: Facebook’s head of communications to step down after decade-long tenur

McDonald’s to ditch plastic straws in the UK and Ireland

McDonald's

McDonald’s will replace plastic straws with paper ones in all its UK and Ireland restaurants from September.

The fast food giant, which uses 1.8 million plastic straws a day in the UK, said in the statement that it was responding to a desire amongst customers to see McDonald’s “move on straws”, reflecting the broader public debate around single-use plastic. This decision comes after a trial of paper straws in selected restaurants earlier this year.

McDonald’s joins the likes of Waitrose and Wagamama who have already begun phasing out this form of single use plastic. All JD Wetherspoon pubs stopped using plastic straws at the beginning of the year, while All Bar One began introducing eco-friendly versions in 2017.

Environment Secretary Michael Gove has described the move by McDonald’s as a “significant contribution” to helping the environment and a “a fine example to other large businesses”.

READ MORE: McDonald’s to ditch plastic straws

WeWork values itself at $35bn as sales more than double

WeWork

Sales at shared office space provider WeWork have more than doubled in the first quarter of 2018 to $342m, according to reports in the Financial Times.

An internal memo seen by the FT shows WeWork’s earnings before tax rose by 137% to $26m in the three months to the end of March, with occupancy at its offices up 82% at the end of the first quarter. By the end of May WeWork boasted 256,000 members, suggesting the growing popularity of a cultural shift to flexible working.

WeWork is now looking to take part in a new funding round which would value the company at $35bn, according to reports made by investor Rajeev Misra, chief executive of the Vision Fund. This valuation would make WeWork the world’s second most valuable startup after Uber.

The Financial Times reports that WeWork is attempting to expand its membership away from freelancers and entrepreneurs, to larger companies that are prepared to take out tenancies of three to five years. At the end of the first quarter these “enterprise” members reportedly made up 24% of WeWork’s customer base, a rise of 14%.

READ MORE: WeWork more than doubles sales in first quarter

Co-op launches football themed summer campaign

Co-op-football

The Co-op is hoping to tap into World Cup fever as it kicks off its summer campaign with a footie focused ad.

Screened for the first time during ad breaks in Coronation Street and Love Island on Wednesday 13 June, the advert shows a group of friends cheering on their football team whilst enjoying the supermarket’s new pizza and beer super saver deal.

A continuation of the Co-op’s “year of eating together” strategy, the campaign will run throughout the World Cup across TV, outdoor, press and radio, before being followed by a barbecue themed ad in July.

The Co-op has also secured a deal with TalkSPORT to be featured during coverage of all 64 World Cup matches. The 10 second adverts, created by creative agency Forever Beta in collaboration with TalkSPORT, will highlight the supermarket retailer’s summer deals and products.

“With two thirds of the games being played during working/commuting hours, radio is a huge opportunity for us and we’re really excited about the partnership,” said Amanda Jennings, Co-op director of marketing communications.

“Summer is bigger than Christmas for us and we think our summer adverts encapsulate how our customers shops with us.”

Thursday, 14 June

The FA virtual signage

The FA and ITV trial virtual perimeter ads during England match

The Football Association and ITV trialled virtual replacement technology on the LED perimeter signage during the recent international match between England and Costa Rica. The technology enables a broadcaster to show different ads and brand messages to those being shown in the stadium, and to create different markets by overlaying the perimeter boards.

In the England game there were two concurrent virtual feeds running – one for those watching in the Americas and another for those viewing the game in Asia, Australasia and parts of Europe. The implementation, delivered by Supponor, which has developed the technology, and stadium technology company ADI is now expected to roll out across other top tier sports markets.

“The potential for Virtual Replacement Technology is substantial. Perimeter LED displays have become a fundamental platform for activating brand partnerships in sport, so the ability to change that message to make it relevant for different fans around the world is hugely appealing for us and our partners,” says the FA’s senior broadcast manager Tom Gracey.

Deliveroo steps up battle with Just Eat

Deliveroo is to allow restaurants to use their own riders for orders placed through its app for the first time as it looks to boost the number of deliveries it can make and compete more directly with rival Just Eat.

Currently, Deliveroo orders are made by one of the firm’s 15,000 riders, while Just Eat works with restaurants that supply their own drivers. But the changes mean that from next month restaurants will be able to choose whether to use their own drivers or Deliveroo’s.

“Traditionally we’ve been unable to work with [some] restaurants … because they already have their own delivery fleet and so they thought ‘well we don’t really need Deliveroo,’” Deliveroo CEO Will Shu said, according to Reuters. “We’re changing the game. We’re enabling these restaurants to tap into our delivery fleet.”

READ MORE: Deliveroo steps up Just Eat battle, letting restaurants use own riders

The NHS brings back ‘Missing Type’ campaign in bid for new blood donors

NHS Blood and Transplant Missing Types campaign

The NHS Blood and Transplant service is bringing back its ‘Missing Type’ campaign for the third year to mark World Blood Donor Day today as it looks to build on the success of the activation and sign up more blood donors.

In a sign of the international support for the campaign, the Sydney Opera House, IBM, American Red Cross, Boots and Dropbox have all lost the As, Os and Bs from their logos and social media handles. Having first launched in the UK in 2015, it now runs across blood donor organisations in 30 countries and has attracted 55,000 new blood donor registrations.

However, NHSBT needs 6,000 new donors a day to keep up with demand. It is particularly in need of rare blood types such as O negative and B negative, although all donors are welcome.

Mike Stredder, director of blood donation at NHSBT, says: “We are overwhelmed by the success of the campaign and the participation across the world to help us share a very important appeal. Every donation can help or save up to three patients and if rare blood groups, like O negative and B negative donors come forward it will make a huge difference. Blood donation is a necessity and it helps patients with cancer, blood disorders and new mums after childbirth.

WPP defends handling of Sir Martin Sorrell’s exit

WPP has defended how it has handled Sir Martin Sorrell’s departure, insisting it was not able to stop the former CEO walking away with a £20m pay package because of a lack of proof of misconduct.

Speculation has mounted over the details of why Sorrell left WPP, with both the Wall Street Journal and Financial Times alleging there was concern over how he used company money and his conduct while boss of the ad group.

However, chairman Roberta Quarta told shareholders at WPP’s AGM yesterday that Sorrell’s contract required him to be treated as retired unless it had evidence of “gross misconduct”. Nevertheless, 30% of shareholders refused to support the company’s remuneration report and some voted against the reappointment of Quarta.

READ MORE: WPP chairman defends handling of Sir Martin Sorrell’s departure

Volkswagen pays £880m fine over emissions scandal

Volkswagen is to pay a €1bn (£880m) fine in Germany over the emissions scandal in 2015 that found the group had cheated on diesel engine emissions tests in the UK And Europe. The German public prosecutor imposed a maxium penalty of €5m and a further €995m for the “disgorgement of economic benefits”, which refers to repayment of profits accrued through illegal or unethical means.

VW accepted the fine and said it would not be lodging an appeal, with the hope that by accepting the ruling further legal proceedings would be “finally terminated”. “Volkswagen, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome,” the group says.

However, VW still faces fallout, with its former boss Martin Winterkorn charged with conspiracy to defraud the US government under an investigation into the scandal. Former VW exec Oliver Schmidt has already been sentenced to seven years in prison for his role in the scandal.

READ MORE: Volkswagen to pay €1bn fine over emissions scandal

Wednesday, 13 June

WPP CEO Sir Martin Sorrell

WPP boss sends company email reminding employees of business’s “values”

WPP boss Mark Read has sent an email to staff reminding them of “company values” amid reports in the mainstream press of former chief exec Sir Martin Sorrell’s alleged use of sex workers.

The joint chief operating officer wrote in a memo to staff that despite not being able to comment on the allegations he wanted to: “remind ourselves of and reinforce the kind of values we want and need to have within every part of our business: values of fairness, tolerance, kindness and – again – respect.”

WPP will host its annual general meeting tomorrow shareholders expected to raise the issue of Sorrell’s depature.

READ MORE: WPP boss tells staff to ‘expect respect’ as group launches review

Dixons Carphone admits data breach affecting 5.9m customers

Millions of Dixons Carphone customers have been affected in a hacking scandal with customers card and personal details compromised.

The company said 5.9 million cards were affected by the data breach of one of its processing systems for Currys PC World and Dixons Travel stores. However they say there is currently no evidence of any fraudulent use of the information due to chip and pin protection.

In addition 1.2m customers had non-financial personal data hacked such as their name and address. The electrical retailer said it would also be contacting those affected.

Chief executive Alex Baldock said: “The protection of our data has to be at the heart of our business, and we’ve fallen short here….We’ve taken action to close off this unauthorised access and though we have currently no evidence of fraud as a result of these incidents, we are taking this extremely seriously.”

READ MORE:Dixons Carphone admits huge data breach

Snapchat introduces marketing mix modelling to the UK

Diageo Snapchat

Snapchat is introducing marketing mix modelling to the UK allowing brands to measure the impact of their campaigns.

MMM will mean that markateers can compare the success of Snapchat for campaigns alongside other marketing channels including TV, radio, print. Currently Snapchat offers measurement solutions in the UK across verification, viewability, reach, resonance and reaction but this will provide more detailed and comparable data.

The social media platform has partnered with 8 leading measurement companies for MMM in Europe. Including Kantar, Nielsen, Analytic Partners, Neustar and Ninah (Publicis).

Andy Pang, Snapchat’s head of international measurement says: “Snapchat ad products are not only unique, but they are driven by the same innovation that drives our consumer products which is great for clients and advertising partners.

“Understanding their impact on product sales therefore requires a deeper understanding of our advertising solutions, the campaign delivery information we provide and how to work with us to generate deeper learnings.”

Snpachat has already launched MM in the US in July 2017.

Comparethemarket.com hires new marketing director

Comparethemarket.com has appointed Liz Darran as marketing director and will be responsible for developing brand strategy, integrating communications campaigns and output.

Darran is a former director of brand marketing at Sky UK and is joining the website’s team from agency Intuit.

Darran says: “Exciting times are ahead in the changing world of price comparison and there is a huge opportunity to drive further brand growth. I’m looking forward shaping and delivering a marketing strategy that continues to ensure comparethemarket.com stands out in consumers’ minds.”

Darran will join comparethemarket.com in June and will report to Mark Vile, chief marketing officer of the brand.

Vile says: “We have ambitious plans to build on our successes by creating a better connected digital ecosystem while retaining our brand competitive advantage, so experienced hires such as Liz will help us to reach these goals.”

UK motor industry faces extinction over customs union says CBI boss

Sectors of the UK car industry face extinction, according to the president of the CBI, unless the UK stays in the EU customs union,

Speaking to Radio 4 today Paul Dreschler said: “If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct.”

He added: that there there was “zero evidence” that trade deals outside the EU will provide any economic benefit to  the UK.

Dreschler, who is due to step down from his role next week, said that by leaving the customs union the entire car manufacturing supply chain will be compromised due to trade tariffs and delays at the border.

READ MORE: CBI chief: ‘Car firms face Brexit extinction’

Tuesday 12 June 

HSBC’s new boss to return the bank to ‘growth mode’

HSBC’s new chief executive John Flint told investors he promises to return the bank to “growth mode” by investing $15-17bn (£11.2-12.7bn) in “growth and technology”.

In his first strategy update since being promoted to the top job in February, Flint says his plan is intended to drive HSBC’s return on tangible equity above 11% by 2020. For instance, in 2017 the return was 5.9%.

Some of his eight strategic priorities include: speeding up the pace of expansion in the Pearl River Delta region of China and in its Asian wealth businesses, plus investing more in technology, turning around HSBC’s US business and getting more revenue from its international network.

At the beginning of July HSBC will undergo a restructure to comply with state ring-fencing rules meaning it will launch a standalone UK retail bank with its own capital reserves.

It is understood shares in HSBC dipped on Monday (11 June), likely in response to the unveiling of its plans.

READ MORE: Flint sets new course to return HSBC to top-pine growth

Poundworld could be rescued by its founder

Struggling discounter, Poundworld, has entered administration after failing to secure a buyer.

Though its stores are expected to trade as normal according to the company’s administrator, Deloitte, which says: “Like many high street retailers, Poundworld has suffered from high product cost inflation, decreasing footfall, weaker consumer confidence and an increasingly competitive discount retail market”.

However, joint administrator at Deloitte Clare Boardman believes a buyer will be found for the business or at least part of it.

And now, reports suggest the company’s founder Christopher Edwards – who sold the business for £150m to TPG Capital in 2015 – is considering buying back some of the retailer’s stores.

He founded the firm in 1974 and claims the management team has not adjusted to rising cost pressure and that selling items for various price has confused shoppers. Poundworld had spent 20 years only selling products for one pound.

“B&M Bargains hasn’t gone, Home Bargains hasn’t gone, Wilko hasn’t gone. So for every store that goes down others are still thriving. It’s about management style, that is what makes the business work,” Edwards told the BBC.

READ MORE: Poundworld could be rescued by founder from administration

Production of Jaguar’s Discovery model moved from UK

Jaguar Land Rover (JLR) will move production of its Discovery SUV to Slovakia from the UK next year, putting hundreds of jobs at risk.

However, its Solihull plant in Birmingham will reportedly be upgraded to build a new generation of electric models with JRL confirming it is “committed to the UK” and there would be a “significant investment and technology upgrade”.

Previously the company promised there would be an electric or hybrid version of all of its models by 2020.

“The decision to move the Land Rover Discovery to Slovakia and the potential losses of some agency employed staff in the UK is a tough one but forms part of our long-term manufacturing strategy as we transform our business globally,” JLR says in a statement.

The company, which is owned by Indian Group Tata Motors, also says the move is unconnected to Brexit.

READ MORE: Land Rover Discovery model moved to Slovakia from the UK

Starbucks introduces a prepaid card for collecting reward points

Starbucks digital

Starbucks is joining forces with Chase Bank to introduce a prepaid Visa debit card which is linked to the coffee chain’s loyalty programme, Starbucks Rewards.

The prepaid card allows consumers to rack-up rewards points called ‘Stars’ with any purchase, even outside Starbucks so long as the vendor accepts Visa debit cards. The card has no annual or monthly reload fees and is designed for customers “looking for alternative tools for money management”, according to the company.

Those who opt in to the Starbucks Rewards programme will automatically be elevated to Gold Status meaning they can collect points to become eligible for birthday rewards and free food and beverage items from Starbucks.

“As we continue to expand and strengthen our digital relationships with customers, we want to make sure we’re providing choices that are both rewarding and meet their preferences in how they engage with us,” says Starbucks’ CMO Matt Ryan.

“This reloadable Visa Prepaid card is a unique and modern option that gives customers one more way to earn more Stars and Rewards through everyday spend, in a way they haven’t been able to before.”

Currently the scheme is available in the US and Canada, and it is not yet known if a similar partnership will be struck in the UK.

READ MORE: The latest brew from Starbucks and Chase

Google reveals its Cannes YouTube Ads Leaderboard

YouTube

YouTube has revealed its Cannes YouTube Ads Leaderboard which celebrates the most popular adverts on the video hosting platform since the last edition of the festival in April 2017.

The collection of 10 ads represent a cumulative 563.5 million minutes of viewing time plus 465.6 million views.

In terms of global success the most prominent ad campaigns belong to India, Finland and France – followed by the US and the UK. While the brands which offered the most “moving messages” are LG, Budweiser and John Lewis.

Gaming adverts have also found a place in the top 10 through the likes of Lego, Nintendo and Clash of Clans.

Director of agencies and branding at Google Spain, Silvia Velasco Praga, says they analysed some of the strongest signals on YouTube in relation to its users such as viewing time, views and a combination of paid and organic views to determine the most popular videos since the previous Cannes Advertising Festival.

“From that moment, we saw that brands like LG, Budweiser, John Lewis and many others created moving ads that do not only generate impressions, but also leave viewers impressed. These are some examples of brands that use the enormous power of YouTube to tell stories,” she says.

“We congratulate all the brands, creative agencies and media agencies included in this list for creating ads that we saw, shared and remembered.”

The YouTube Ads Leaderboard Cannes 2018:

LG – Life is Good
Clash of Clans – How do we get over there?
Miss Dior – The new Eau de Parfum
Amazon – Alexa Loses her voice (Super Bowl LII)
Samsung Galaxy – Growing
Apple – Meet iPhone X
Super Mario Odyssey Musical – Jump Up, Super Star!
Budweiser 2018 – Stand by You (Super Bowl LII)
John Lewis – Moz the Monster (Christmas 2017)
Lego City – A Slimy Situation

Monday, 11 June

vegetarian

Lab tests find meat in vegetarian meals at Tesco and Sainsbury’s

Traces of meat have been discovered in vegetarian and vegan products sold at two of the UK’s leading supermarkets.

An investigation by The Daily Telegraph has found traces of pork in Sainsbury’s own-brand ‘meat free’ meatballs, while traces of turkey were discovered in Tesco’s BBQ Butternut Mac, part of its newly-launched plant-based Wicked Kitchen line.

The Food Standards Agency is now investigating the findings, while Jewish and Muslim groups have said consumers will be “distressed” to learn they may have inadvertently eaten pork, and have called for the affected products to be removed from shelves.

Sainsbury’s meat-free meatballs product has been accredited by the Vegetarian Society and in a statement it confirmed these products are produced at a meat-free factory, and that both it and the Vegetarian Society carry out regular checks.

It says no problems have ever been found but it has launched a “comprehensive investigation” with its supplier to determine the source of the pork DNA.

Tesco, meanwhile, admits the product is made in a factory which handles meat, but claims “strict controls” are in place.

A Tesco spokesman says: “We take the quality and integrity of our products extremely seriously and understand that our vegan and vegetarian products should be exactly that. Our initial DNA tests have found no traces of animal DNA in the BBQ butternut squash product available in stores today.”

It adds that no turkey is handled at the manufacture site.

It’s not the first time supermarkets’ products have been found to contain rogue ingredients. In 2013, ready meals and burgers at supermarkets including Tesco were found to contain horse meat, which led to a huge drop in consumer trust.

Supermarkets have been steadily ramping up their vegetarian and vegan offers as more consumers opt to for a ‘flexitarian’ or meat free diet.

READ MORE: Supermarket scandal: Pork and turkey found in vegan and ‘meat free’ meals

Sorrell ‘strenuously’ denies paying for prostitutes with WPP cash

WPP CEO Sir Martin Sorrell

Former WPP boss Sir Martin Sorrell has “strenuously denied” using the firm’s money to pay for a sex worker, after an investigation by the Wall Street Journal on Saturday claimed this was one of the matters being explored prior to his departure.

Sorrell stepped down as CEO of the world’s largest advertising group eight weeks ago, but his departure was confirmed before the investigation into alleged personal misconduct and misuse of company funds could be concluded.

Sorrell’s spokesman said on Sunday (10 June): “Sir Martin signed a non-disclosure agreement when he stepped down which precludes him from discussing any of the circumstances surrounding his departure. He has rigidly adhered to this obligation and will continue to do so.

“As regards the allegations which have appeared in the Wall Street Journal, Sir Martin strenuously denies them. He will be making no further comment at this time.”

A spokesman for WPP adds: “WPP has been advised that it cannot disclose details of the allegations against Sir Martin Sorrell because it is prohibited by data protection law from giving such details. Sir Martin chose to resign at the conclusion of the investigation by independent legal counsel.”

READ MORE: Martin Sorrell denies paying for sex worker using funds from WPP

High street footfall decline slows

Footfall on the UK high street fell at a slower rate in May compared to previous months, declining by just 0.4% versus the same month last year, according to the British Retail Consortium (BRC).

It is an improvement on April, which saw a 3.3% drop and March, which saw a 6% year-on-year decline. But given May 2017 was a particularly bad month and the good weather this year led to growth in in-store sales it is still disappointing.

Helen Dickinson, CEO of the BRC, says: “May’s better weather resulted in a marginal improvement in footfall across the nation’s high street and out-of-town shopping areas, but it wasn’t enough to overcome the long-term trend of declining visits to physical stores.”

It was been a particularly bad year for retailers so far with stores including Toys R Us and Maplin going out of business and other high street stalwarts such a Marks & Spencer and House of Fraser announcing store closures.

Dickinson continues: “Consumer behaviour is changing and retailers are continuing to adapt their stores to their customers’ requirements by investing in the integration of their online and bricks and mortar businesses, increasingly allowing customers to pick up in stores items purchased online.

“Policy makers can help to ease the pressure on both retailers and high streets by addressing the burden of business rates and adapting planning laws to support the successful reinvention of empty retail space.”

Facebook shared users’ data with companies after it says it cut access

Facebook shared users’ personal information with certain advertisers after the date executives at the company said this information was no longer available to third parties, according to a Wall Street Journal investigation, in the latest privacy-related embarrassment for the brand.

The social network created customised data-sharing deals with some companies including Nissan and the Royal Bank of Canada, giving them special access to additional information about users’ Facebook friends, including details such as phone numbers and a metric called ‘friend link’ which is used to measure how close users are with others in their network.

These ‘whitelist’ deals were forged with companies that either advertised on Facebook or were valuable to the social network for other reasons, according to those close to the matter.

READ MORE: Facebook Gave Some Companies Special Access to Additional Data About Users’ Friends

Consumers urged to think about their legacy in latest Save the Children ad

Save the Children has launched a campaign asking people what they want their legacy to be.

The ad stars Liberian midwife Alice Sumo, who has had more than 800 babies named after her during her 30-year career. It shows how Sumo has continued to deliver babies safely despite the unrest in Liberia, from the civil war to the Ebola crisis, thanks to support from Save the Children, which built the White Plains Clinic in 2014 funded by a Capital Appeal by UK supporters.

Jonathan Jacques, head of legacies at Save the Children, says: “We wanted to tell a really unique and engaging story that our supporters could get behind. By inspiring our supporters with Alice’s legacy, we hope to emphasise what their legacy can be and to encourage them to download a free will-writing guide to find out more”

The ‘What do you want your legacy to be’ campaign was created in-house with guidance from the agency Consider Creative. It follows the charity’s first TV campaign under the ‘legacy’ umbrella, which launched in 2017.

View more on these topics

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