TUI revenues slump 98% as pandemic lockdowns wipe out sales
Europe’s biggest holiday company TUI’s revenues slumped 98% between April and June as pandemic lockdowns across the continent wiped out its sales.
The company says losses so far this year have totalled €2bn (£1.8bn), with more than half of that coming in the past three months. It is warning that the travel industry is unlikely to return to normal until at least 2022.
TUI does say that the revival in demand for holidays from mid-June has been encouraging. However, bookings are still down 80% compared to last year and while more than half its hotels have reopened, most are only averaging an occupancy rate of 23%.
Bookings for next summer are up 145% compared to last year although much of this is due to rescheduled bookings. TUI has cut its capacity for summer 2021 by 20%.
CEO Fritz Joussen says: “We acted very quickly at the beginning of the crisis in March and we responsibly mastered the new start in the summer – together with governments and partners. We will now sustainably reduce our costs and thereby strengthen our position in the market.”
John Lewis’s former marketing director leaves for Costa Coffee
John Lewis’s former marketing director Becky Brock is leaving to take up a role as commercial and customer director at Costa Coffee.
Brock joined the retailer in 2017 from Snow & Rock, reporting directly into then customer director Craig Inglis. She had previously worked at Unilever, Homebase and The Edrington Group, which produces spirits including The Famous Grouse and The Macallan.
Her departure is the latest in a number of changes to the marketing team at John Lewis as it restructures its business. Inglis and managing director Paula Nickolds have both left in recent months, Nickolds departing before she could take on a new role as executive director of brand across John Lewis and its sister retailer Waitrose.
Brock was most recently mission director on the strategy and commercial development team, a new role under the restructure. She will join Costa Coffee in November.
Epic Games portrays Apple as evil empire in parody of its ‘1984’ ad
Epic Games, the company behind the game Fortnite, has spooofed Apple’s most iconic ad as part of a lawsuit against the company.
The video game company released an ad called ‘Nineteen Eighty-Fornite’, a play on Apple’s ‘1984’ ad that was itself based on George Orwell’s novel Nineteen Eighty-Four.
In Epic’s ad, however, it is Apple that is portrayed as the evil empire, with a heroine wielding a unicorn pickaxe racing through a room full of drone-like viewers unable to stop watching an apple-headed dictator on-screen.
pic Games just declared war on Apple with a spoof of the company’s most iconic ad — and it’s chock-full of clever Easter eggs.
“Today we celebrate the anniversary of the platform unification directives,” the dictator says. “For years, they have given us their songs, their labour, their dreams. In exchange, we have taken our tribute, our profits, our control. This power is ours and ours alone. We shall prevail.”
While the ad is a parody of Apple’s, it is meant as a takedown of Apple’s sometimes controversial App Store policies. Epic wanted to offer players the option to pay it directly for in-game purchases rather than going through the App Store, which takes a 30% commission. As a result, Apple pulled its Fortnite game from the App Store, which in turn led Epic to release the video and sue Apple for what it alleges are monopolistic business practices.
Consumer magazines opt out of reporting circulation figures
Consumer magazine companies including Reach, Future, Hearst and Conde Nast have opted out of reporting their six month circulation figures because of the coronavirus pandemic.
ABC rules state publishers can choose to report either every six months or every 12 months. This year, less than half the number of publishers who last year published results for the six months have done so.
The companies do not believe the figures would be a fair reflection of their businesses given that sales have been impacted by high street and travel stores being shut. Although subscriptions and sales are convenience stores are up, this has not been enough to offset the losses elsewhere.
Instead, the companies will include the half-year figures in the full-year sales data, to be published in February 2021.
Hearst CEO James Wildman says: “We believe a six-month release will not accurately provide a robust view of our true circulation figures, particularly in comparison to January to June 2019.
“Instead, we plan to deliver an annual release in February next year, which will be more representative and, in the meantime, our customers can access our audience numbers as usual through the gold-standard PAMCo service.”
Among those that have opted to publish six monthly figures are Bauer Media and Immediate Media. Bauer’s UK CEO of publishing Chris Duncan says the company wanted to be transparent about the circumstances it found itself in, adding that distribution patterns are settling down and it remains “on track for robust recovery”.
He adds: “While our traditional supply-chain experienced massive disruption during lockdown, the demand for our products remained strong and even increased in some markets. We saw home-delivered and digital copies grow through our subscriptions channels, and sales in independent shops rise as more of our readers sought out copies closer to home.”
Cartier faces criticism over censorship of ad aired in China
Cartier is facing criticism for censoring an ad that viewers believe is meant to show gay couples as family and friends in China.
The 60-second video shows several groups of people, including a romantic moment between a man and a woman, two men cycling together, and two women. The only text shown during the ad is at the end, when it says: “How far would you go for love?”
Cartier’s Tmall store page also reportedly includes the campaign, which has an image of two women saying: “Mutual understanding beyond words. Witness our everlasting friendship.”
Another ad featuring the two men, who are very close in age, initially claimed they were father and son. When the age gap was pointed out, different wording was added to say: “Father and son are like brothers.”
However, viewers have questioned why a father and son or two brothers would use a ring to signify their relationship, claiming it is clear they are meant to be a couple. It raises questions over censorship of LGBTQ+ couples in China, where homosexuality is not illegal but where discrimination is still common.
A Cartier spokeswoman told CNN the stories were “inspired by love”.
“Each tells the story of romantic, friendship, or family love … As such, one of the stories features the unique bond between a father and his son, enjoying a joyful and playful bike ride together, symbolising the journey of life when there will be moments of parting ways.”
Thursday, 13 August
Just Eat to create ‘thousands’ of UK jobs as orders soar
Just Eat plans to create “thousands” of UK jobs and invest “tens of millions of pounds” in Britain as orders soar during lockdown.
Speaking to Sky News, chief executive Jitse Groen said Just Eat was in a “fortunate position” to benefit from the nationwide lockdown and wanted to maintain this momentum with an “aggressive investment programme”.
“We are convinced that our order growth will remain strong for the remainder of the year,” he added.
During the first half of 2020, Just Eat’s revenue increased by 44% to €1bn (£902m), while orders surged 32% to 257 million. Profits rose by 133% to €177m (£160m) in the first six months of the year. The delivery giant also grew the number of active customers using its app to 54 million, up 10 million on the same period last year.
This is a big year for Just Eat. The company’s £6.2bn merger with Takeaway.com was cleared by the Competition and Markets Authority (CMA) in April and it is also in the process of completing its $7.3bn (£5.6bn) takeover of US food delivery service Grubhub.
Amazon donates $6m to support film and TV production
Amazon Prime has donated $6m (£4.6m) to support theatre, TV and film production across Europe, as it pledges solidarity with the “creative community”.
The grants include £500,000 to a fund supporting theatre workers and freelancers set up by Fleabag star Phoebe Waller-Bridge, who signed an exclusive deal to create new programmes for the streaming service last year. Amazon Prime is also donating £1m to a grants scheme developed by the Film and TV Charity.
“The creative community in Europe has been vital to our success in producing high-quality Amazon original TV series and movies,” says Amazon Studios head, Jennifer Salke. “It is essential for us to help that community through this pandemic.”
Prior to this, Amazon Prime’s streaming rival Netflix donated £500,000 to a separate fund supporting theatre workers set up by director Sam Mendes.
Pubs, restaurants and bars hit by 50% sales slump
Sales across UK pubs, restaurants and bars fell 50.4% in July compared to the same period last year due to the impact of Covid-19.
Bar sales fell by 63%, restaurants by 60% and pubs by 45%, according to a survey of 49 group-owned and managed companies operating more than 7,500 sites nationwide, collated by the Coffer Peach business tracker.
Trading in London has been hardest hit, down 58% in July, compared with an average outside the capital of 48.5%.
The tracker found 94% of UK pubs and 62% of bars are now open following the lockdown, but only 36% of restaurants trading in February have reopened, pointing to further pain for the casual dining sector.
In June, for example, owner of Frankie and Benny’s, Garfunkel’s and Chiquito – The Restaurant Group – announced plans to shut 125 sites, a move that cut 3,000 jobs.
The stats reflect the gradual reopening of the hospitality sector and the fact that London, which was hardest hit during the early days of the pandemic, is slow to get back to normal levels of trading across restaurants, bars and pubs, says Karl Chessell, the director of CGA, the consultancy that produces the data with the Coffer Group and auditor RSM.
Dr Martens demonstrates ‘resilience’ as sales surge 50%
Sales at Dr Martens surged by nearly 50% in the year to June and profits almost doubled, as the footwear brand continued to prosper despite global lockdowns.
The company, which saw sales of sandals increase by more than 50% during the year, opened 16 new stores including five in the US, taking its total to 122. The business also experimented with branded areas in department stores.
Thanks to its “resilience in trading and financial strength” during the crisis, Dr Martens has now repaid the government money it used to fund staff on furlough between March and June.
Chief executive, Kenny Wilson, described the year to June as a period of “exceptional growth” and said that despite the “volatile and uncertain trading environment”, he believes Dr Martens has a clear strategy supported by a “strong brand and consumer connections”.
Baileys shines the spotlight on female authors
Baileys is launching a new campaign celebrating the contribution female authors have made to literature past and present.
Developed to mark the 25th anniversary of The Women’s Prize for Fiction, which Baileys sponsors, the ‘Reclaim Her Name’ campaign sees a collection of 25 novels previously published under male pseudonyms rereleased for the first time under the female author’s own name.
The collection includes Middlemarch by Mary Ann Evans (aka George Eliot) and A Phantom Lover by Violet Paget (aka Vernon Lee). The 25 books were selected by searching archives, online and university resources to identify female writers who disguised their gender with pseudonyms.
The book library, created in collaboration with brand and consumer agency VMLY&R, features newly commissioned cover artwork by female illustrators from Brazil, Russia, Jordan and Germany. The full collection is also available to download for free as e-books.
“The Women’s Prize for Fiction champions the power of female voices, something we care deeply about at Diageo,” says Adrienne Gammie, category marketing director – Gins, Pimm’s & Baileys.
“Through Reclaim Her Name we are excited for Baileys to extend this celebration of literary achievement to authors who concealed their gender on their work – shining a spotlight on these incredible female storytellers.”
Wednesday, 12 August
Ben & Jerry’s hits out at Home Secretary
Ice cream maker Ben & Jerry’s has taken on Home Secretary Priti Patel over moves to stop the flow of migrants.
The company challenged the cabinet minister on Twitter criticising the “lack of humanity” shown to those making the perilous journey across the channel.
But a Home Office source hit back, defending Patel’s handling of the crisis, adding if that meant upsetting the social media team “for a brand of overpriced junk food then so be it”.
Patel has been leading the government’s response to the increasing number of migrants making the hazardous voyage, including calling the navy to stop people, many of whom have young children, from trying to reach the UK.
Ben & Jerry’s has previously used its marketing to help migrants, launching campaigns to change the law and allow asylum seekers to work.
UK enters first recession in over a decade
The UK economy suffered its biggest slump on record between April and June as coronavirus lockdown measures pushed the country officially into recession.
The economy shrank 20.4% compared with the first three months of the year, with the the UK plunging into its first technical recession – defined as two straight quarters of economic decline – since 2009.
Officials said the economy bounced back in June as government restrictions on movement started to ease.
Britain has suffered one of the steepest slumps compared to other advanced economies as it imposed lockdown measures for longer than many other countries.
Debenhams cuts 2,500 jobs
Debenhams is cutting a further 2,500 jobs as it is hit by the impact of coronavirus.
The chain, which was already struggling from weak sales before the lockdown began in March, said it was taking the action as part of efforts to ensure the business had “every chance of a viable future.”
The company had previously announced in May that it would not be reopening five of its stores, with 1,000 members of staff affected.
Other measures included a decision in April to pull out of Ireland, with the loss of 1,200 jobs.
The new cuts mean 6,500 jobs have been lost so far this year in total – a third of its workforce – more than 5,000 of which are in the UK.
BP considers closing half of offices
BP is considering a radical reduction of its offices as it shifts to remote working in the wake of coronavirus.
The oil company could nearly halve its property portfolio in some locations, by shifting almost 50,000 employees towards flexible workplaces.
A review by the company’s senior leaders of the company also includes major staff cuts and a new approach to digital working.
One senior BP executive told the Guardian the ongoing workspace review is considering an exit from up to three-quarters of BP’s existing offices in some countries, in favour of smaller and more flexible workspaces.
BP has a 70,000-strong workforce across 79 countries. The company revealed plans earlier this year to cut its workforce by 15% by the end of the year, representing 10,000 jobs mostly from office-based roles.
The staff cull will effectively shrink the number of office-based employees by a quarter, while the remaining office workers will be asked to embrace a hybrid working arrangement which includes working from home and office-based hotdesking.
BP’s plans are part of a break-neck modernisation of the company under the leadership of Bernard Looney, who took over as chief executive in February this year with a promise to become a “net zero carbon” company by 2050.
Domino’s sees profit decline despite order increase in lockdown
Domino’s said costs resulting from Covid-19 caused its profits to decline despite a surge in orders generated by the lockdown.
Pre-tax profits fell by 4.6% to £47.6m in the first half of the year, compared to the same period in 2019, as the business was impacted by over £6m in charges related to the coronavirus. Like-for-like sales in Britain rose 5.5% in the 26 weeks ending June 28, but the company was set back by face-masks, gloves and other additional PPE costs.
Delivery-only orders jumped by more than a fifth, thanks to higher items per delivered order. Overall delivery orders leaped by 12% in the first half of last year.
It is the first set of results to be published under the new leadership of former Costa Coffee boss Dominic Paul. He said the firm’s “resilient” performance from January to June was aided by “encouraging’” trading in the following few weeks.
Paul was cautious about the future. He added: “While trading in the first few weeks of the second half has been encouraging, it is too early to conclude on how consumer behaviour will evolve.”
Tuesday, 11 August
O2 encourages nation to go green with living billboard
O2 has unveiled a living billboard to celebrate the network’s ‘Go Green’ initiative as a part of its four-week ‘Go’ campaign on Priority.
Located in Shoreditch, London, the billboard was created from hundreds of pistachio stems which will reveal an environmentally friendly ‘Go Green’ message over the course of its two-week placement.
Priority’s ‘Go’ campaign provides O2 customers with various experiences, both in the real world and digitally, by encouraging them to try something new as life slowly returns to normality after lockdown.
O2 customers have been offered a streamed virtual talk with a wildlife photographer and filmmaker, a dining experience with an overnight stay at a luxury hotel and, this week, the opportunity to learn how to grow their own living wall in their homes.
“Over the past few months, we’ve all seen the profound impact changing our behaviours can have on the environment,” explains O2’s head of partnerships and social impact, Tracey Herald.
“We want to encourage the nation to keep up the good work and return to the new normal in a more environmentally friendly way. Priority’s unique billboard, and the Go Green week of offers are designed to do just that, giving our customers a wealth of fantastic incentives to help them embrace both greener lifestyles and choices.”
Superdrug launches ‘Be Kind, Shop Kind’ initiative
High street retailer Superdrug has pledged to combat in-store aggression against staff as part of its ‘Be Kind, Shop Kind’ campaign.
The move follows on from its ‘Be Kind’ initiative, aimed at negative behaviour on social media and comes at a time when a rising number of Superdrug employees have been verbally abused over social distancing measures introduced as shoppers return after lockdown.
Aggression towards retail staff has been a growing issue across the whole sector in the past year, with the ACS 2020 Crime reporting finding that 83% of staff in the convenience sector experienced verbal abuse throughout 2019.
To combat this, Superdrug is adopting a zero-tolerance stance to any aggression shown towards their staff and will be actively encouraging shoppers to be mindful and respectful of staff.
Superdrug’s customer and people director Joanne Mackie, says: “At Superdrug, we are proud to be continuing to support our amazing store colleagues with the Be Kind, Shop Kind Initiative.
“The safety and protection of our store teams is our top priority, and we are focused on taking steps to ensuring that all of our valued store colleagues feel safe and happy when at work.”
Time Out produces print edition in tribute to founder Tony Elliott
Listings guide Time Out is producing a one-off print edition, available today, as homage to the brand’s founder Tony Elliot, who died last month.
The edition will come out nearly 52 years to the day since the first ever issue was published, back in August 1968.
Created as an eight-page handout with listings of events in the capital, Time Out developed over the decades into a global media platform, one that currently covers 328 cities in 58 countries.
The special issue will include a listings section inspired by the first 1968 edition, a Love Local section and Time In pages.
Time Out London editor Joseph Mackertich says: “This special edition is in honour of Time Out’s late founder, Tony Elliott who dedicated his life to opening up the world’s cities to locals and visitors.
“We’re excited to share the beloved and iconic magazine once again, which adds new, interesting content that reflects the times we are currently living in and the best of London this summer.”
BRC-KPMG retail sales monitor shows some recovery
The BRC-KPMG retail sales monitor for July shows that, on a total basis, sales increased by 3.2% last month, against 0.5% during the same time last year. It’s the second month of growth since the start of the pandemic.
UK retail sales increased 4.3% on a like-for-like basis from July 2019. However, over the three months up to July, in-store sales of non-food items fell by 29.3%, while food items increased by 8.2% on a like-by-like basis and by 6.1% on a total basis.
“July saw the second month of growth as lockdown measures eased and demand gradually began to return in some places,” says British Retail Consortium CEO, Helen Dickinson, before warning that recovery is still a long way off yet.
“While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures.
“The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales. Rents are also continuing to accumulate and the next Quarter Rent Day could see many otherwise viable businesses fall into insolvency, costing stores, jobs and economic growth.
“The government should adopt the proposal from landlords and tenants for a Property Bounceback Grant, which would deliver £7bn in tax revenue to the Exchequer and save 375,000 jobs.”
Coca-Cola gives away Premier League shirts ahead of new season
A special Coca-Cola on-pack promotion is offering football fans the chance to get hold of thousands of free shirts on the eve of the new Premier League season.
Running until the end of October, the promotion across selected packs of Coca-Cola Original Taste and Coca-Cola zero sugar gives fans the chance to enter an online prize draw with every purchase.
The campaign is being supported by radio, digital activity, out-of-home advertising, a partnership with Sky and point-of-sale material.
Senior brand manager at Coca-Cola Great Britain, Oliver Bridge says: “We recognise that every week, millions of people watch football from home, with even more so at the moment.
“With many Premier League fans unable to enjoy the matchday experience at a stadium, we want to help them create the best ‘home end’ atmosphere in their own homes.
“With the aim to make the experience even more special, we’re excited to offer fans the chance to win their team’s new shirt and proudly wear a sought-after piece of their club’s ID at the start of the new season.”
Monday, 10 August
Unilever brings Lifebuoy back to the UK with new campaign
Unilever’s hygiene soap brand Lifebuoy is returning to the UK as it looks to take advantage of the coronavirus pandemic to improve hand hygiene.
In a campaign to promote the relaunch called ‘Bish Bash Bosh’, the brand aims to raise awareness of the importance of hand hygiene and change behaviour, particularly among children and vulnerable groups. Unilever is investing £12m behind the campaign, which will run above-the-line and in stores.
The campaign, created by MullenLowe Group, is based on the insight that as the pandemic evolves, people may not keep up good hand hygiene practices. The animated activity shows moments such as going to the supermarket, catching a bus or paying for something in a shop as moments when people should wash and sanitise their hands.
Lifebuoy will also run a programme in schools to improve hand washing, distributing free hand hygiene kits and learning materials.
Unilever UK & Ireland’s vice-president of beauty and personal care, Chris Barron, says: “With many people feeling apprehensive about returning to their everyday lives, there has never been a more important time to educate people on the importance of good hand hygiene.
“Our aim with the Bish Bash Bosh campaign is to continue to support the significant increase in handwashing that we’ve seen over recent months, and firmly establish hand hygiene as a regular habit for everyone in Britain.”
One in three companies planning redundancies
One in three companies is planning to make staff redundant in the third quarter of the year as the government’s furlough scheme is rolled back.
Some 38% of private sector firms plan to make redundancies, compared to 16% of those in the public sector, according to research by the Chartered Institute of Personnel and Development (CIPD) and recruiter Adecco. That is a 50% jump compared to three months ago.
Overall, 33% plan to let staff go.
A further 49% plan to hire staff, up from 40% three months ago. However, that is “well below” previous levels. The proportion of employers planning to hire relative to letting staff go is at its lowest level since 2013 when the survey began running in its current form.
Tesco changes delivery fees in face of increased demand
Tesco is to charge a flat fee for grocery delivery and click-and-collect slots, rather than operating a peak and off-peak pricing model, as demand increases.
Previously, customers paid between £2 and £7 for deliveries and up to £2 for collection depending on the day and time they booked their slot. It has now moved to a flat pricing structure, with all slots costing £4.50 for delivery and £1.50 for collection.
Tesco says the changes have come about because it now faces constant demand for slots, rather than their being more and less popular times.
P&G increases annual ad spend for first time since 2016 despite coronavirus pandemic
Procter & Gamble increased ad spend by 8.5% year on year in the 12 months to the end of June to $575m, according to its annual report.
That is the first annual rise since 2016 and comes despite the coronavirus pandemic impacting countries around the world. The increase is in part because net sales were also up – by 6% – although this does suggest P&G increased ad spend ahead of business growth.
The report says P&G increased investment in media and other marketing spending but made savings on agency compensation, production costs and ad spend.
Speaking on its earnings call in July, CEO David Taylor highlighted the company winning Marketer of the Decade at the Cannes Lions Festival of Creativity this year, saying it pointed to “sustained excellence” and effectiveness in growing markets and building its business.
“We have raised the bar on all aspects of superiority – product, package, consumer communications, retail execution and value,” he said. “These superiority investments have yielded strong results and most importantly they have grown markets both before and after the pandemic.”
Twitter in talks to buy TikTok in the US
Twitter has reportedly approached TikTok’s Chinese owner ByteDance about the possibility of purchasing its US operations.
TikTok has become the talk of acquisition deals after US president Donald Trump ordered firms to stop doing business with it over security concerns about its Chinese ownership. ByteDance is reportedly looking for someone to buy it in the US, with Microsoft previously showing interest as well.
Twitter is though likely to face less regulatory scrutiny for the purchase than Microsoft. But Microsoft appears more able to afford it, according to a report in the Wall Street Journal
But it remains unclear whether Twitter can afford to buy TikTok from its Chinese owners and can complete a deal within the 45-day window, according to sources quoted in the Wall Street Journal.