Co-op, EE, Philip Morris: 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.

Co-op criticised for Amazon tie-up

Co-op has been criticised for partnering with Amazon Prime for online deliveries given its position as an ethical and sustainable retailer.

The GMB trade union says it is “really disappointing” to see Co-op, which has a “proud ethical heritage”, team up with the tech giant as it has been accused on not paying its fair share of tax in the UK and treating staff poorly.

“Amazon has made billions throughout the pandemic. Bosses won’t even recognise a union to improve the health and safety of their beleaguered workforce,” says Andy Prendergast, national officer of the GMB.

Co-op CEO Steve Murrells defended the move, describing the partnership as a “good joining of bedfellows”, although underlined that he wasn’t “here to defend Amazon”.

“We have been working with Amazon for many years. From our point of view it allows us to get more ethically sourced products to more homes,” he says.

In a separate statement, the Co-op adds: “We aren’t compromising our ethics and principles.”

The brand says the extension of the partnership “reflects the support Co-op members have shown for Amazon’s products by using its lockers and click and collect services through hundreds of our stores for a number of years”.

The tie-up with Amazon will enable Prime customers to order groceries from Co-op for same-day delivery with a two-hour delivery slot. Co-op hopes the deal with help it double online sales.

Philip Morris bolsters ‘Beyond Nicotine’ strategy with inhaler maker deal

Cigarette firm Philip Morris International (PMI) has been given the green light to acquire UK inhaler maker Vectura after 74% of the company’s shareholders agreed to the deal.

The maker of Marlboro cigarettes is now urging remaining shareholders to accept the offer, although as it has surpassed the 50% mark the £1.1bn deal is now unconditional and will go ahead regardless.

The deal has been criticised by both medical groups and charities which have warned the board against selling to a tobacco firm.

PMI has pointed out that it already has expertise in areas like respiratory medicine and CEO Jacek Olczak says the deal will play a “critical role” in the company’s ‘Beyond Nicotine’ strategy.

However, PMI still currently generates the majority of its income from cigarettes.

John Lewis charters ships to avoid Christmas supply disruption

John Lewis is chartering a fleet of additional ships to help ensure it has stock in time for Christmas as it looks to get ahead of supply chain problems such as driver shortages and shipping delays.

John Lewis chair Sharon White says the retailer has taken a number of steps and is working hard to ensure Christmas is not disrupted.

“We’re acting hard and we’re acting fast to make sure we can still deliver a fantastic, sparkly Christmas to our customers,” she tells the BBC.

She also outlined the measures the retailer has taken to help address driver shortages, including the fact it has raised wages for HGV drivers, adding “we’re really beginning to see the results of that”.

Pre-pandemic the total number of HGV drivers in the UK was around 600,000, but there is currently a shortage of more than 100,000 drivers in the UK, according to a Road Haulage Association survey of its members.

Marketing Week published an analysis of the ongoing supply chain challenges earlier this month, looking at how marketers can best manage customers’ expectations around shortages.

The John Lewis Partnership revealed it had cut its losses over the first six months of 2021 to £29m, helped by its strategy to bring the John Lewis and Waitrose brands closer together.

EE becomes latest brand to open a store on Coronation Street

EE is set to open a store on ITV soap Coronation Street as part of a product placement deal that will see it become the connectivity partner of Weatherfield.

As well as the store, EE staff and shopping bags will be integrated into episodes of the long running show.

The store will first appear on 20 September but will initially be covered by EE branded hoarding as the shop is fitted out. It will be unveiled later this year.

Mark Trinder, director of commercial sales and partnerships at ITV says: “The shopfronts in Coronation Street are the pinnacle of product placement on British TV and I’m thrilled to have EE’s newest retail store on the cobbles. While we can’t see the full shopfront on-screen just yet, the team are working hard to build it for the ‘opening’ later this year.”

EE follows in the footsteps of Co-op and Costa, which both have stores on the cobbles.

Odeon launches campaign to get people back to the cinema post-Covid

Odeon Cinemas Group has unveiled a new purpose and marketing campaign across Europe and the US as it looks to encourage cinemagoers back through its doors post-pandemic.

‘We make movies better’, by Elvis, aims to remind people that films are best enjoyed on the big screen rather than the sofa.

The campaign, which is fronted by actress Nicole Kidman, highlights four key areas where Odeon believes it can improve the movie watching experience, suggesting it makes the event more immersive, memorable, delicious and seamless, alluding to the investment it has made in technology.

Chris Bates, commercial & marketing director, UK & Europe says the group has been “very encouraged by strong consumer demand to return to the cinema” and has welcomed more than 6 million customers through its doors since reopening in May.

“We have fantastic colleagues at Odeon Cinemas Group, who have shown great resilience in the past 18 months, and are now focused on delivering the best possible guest experience,” he adds. “We look forward to a great upcoming film slate including the much anticipated launch of No Time to Die, and we are delighted to have the amazing support of Nicole Kidman in helping us to communicate our new purpose: ‘We make movies better’.”

Thursday, 16 September

Primark aims to up its green credentials

Fast fashion brand Primark is hoping to cut its impact on the environment by using more recyclable materials, lengthening the lifespan of its products and increasing wages for its workforce.

The company has been heavily criticised in the past for its damaging use of water and chemicals and encouraging a throwaway culture among its customer base.

Now it says that a dedicated team will work with factories and suppliers to focus on issues like renewable power, energy efficiency levels, single-use plastic and more eco-friendly farming practices.

However, Primark CEO Paul Marchant is keen to stress that the measures won’t mean an increase in prices.

“We believe that sustainability shouldn’t be priced at a premium that only a minority can afford,” Marchant says.

The target is to increase the durability of its clothes by 2025, make them recyclable by design two years later and produce all of its clothing from recycled or more sustainably sourced materials by 2030.

John Lewis to hire thousands of extra temp staff for Christmas

John Lewis Partnership (JLP) will hire thousands of extra staff in the run-up to Christmas, amid growing anxiety about supply chains and worker shortages.

The retailer is planning to recruit 7,000 temporary staff, 2,000 more than last year, as well as 550 permanent driver and warehouse jobs.

JLP, which closed a number of stores during lockdown, resulting in 4,000 job losses, is hoping to attract the extra workers by offering free canteen food and drink, even though pay rates are not expected to increase from last year.

“We know that as the first Christmas after lockdown, customers will want to make it really special, and we’re throwing everything we can into helping them celebrate – our festive team will have a crucial role to play,” says JLP people director Nikki Humphrey.

Avon marks 135 years with reimagined assets

Cosmetics multinational Avon is marking its 135th anniversary with a doubled-down pledge to help women transform their lives for the better, a series of enhancements to its Avon On digital platform and the introduction of the Avon Rewards scheme.

The improvements will allow representatives to connect easier with customers, manage their orders and access training via the app. The celebrated Avon brochure is now fully digital, with customers able to access customised links.

There’s also a series of reimagined Avon posters featuring original artworks from the past 100-plus years, with British illustrator Bett Norris updating the classic assets to give them a contemporary take.

“We’re just getting started and we’ll continue to champion women for another 135 years and more,” says Avon CEO Angela Cretu.

“As we enter the truly digital age, we are committed to doing good with our people, purpose and product, and encourage all our representatives and associates, both established and new, to grow with us.”

We Buy Any Car, Sports Direct and Saga fined for nuisance messages

The Information Commissioner’s Office (ICO) has fined household names We Buy Any Car, Sports Direct and Saga a total of £495,000 after they sent more than 354 million nuisance messages between them.

We Buy Any Car received the biggest fine, £200,000, after sending over 191 million emails to customers who had requested an online valuation of their vehicles and 3.6 million text messages.

The ICO found that the initial emails sent after a valuation request were within the law, but that subsequent messages were unlawful because they contained marketing, as well as being sent without consent.

Sports Direct was fined £70,000 for sending 2.5 million emails as part of a re-engagement campaign and were unable to provide any evidence that the recipients had given their consent.

Saga Services and Saga Personal Finance were fined £150,000 and £75,000 respectively for instigating 157 million emails between them using partner companies and their affiliates that used data lists of people that had not given permission to be contacted.

The news comes a week after the government announced data law reforms to better protect consumers’ private information and clear up confusion over “legitimate interest”, with some advertisers seeking to collect data using consent by default.

“These companies should have known better,” says ICO’s head of investigations Andy Curry. “Companies that want to send direct marketing messages must first have people’s consent.

“And people must understand what they are consenting to when they hand over their personal information.”

ISBA reacts to of Nadine Dorries culture secretary appointment

ISBA says it is hoping to meaningfully engage with Nadine Dorries after she was appointed culture secretary as part of yesterday’s cabinet reshuffle.

Dorries, a strong Brexiter, former nurse and occasional novelist, replaces Oliver Dowden and has been something of a controversial figure in recent years, suspended by her party after appearing on ITV’s I’m a Celebrity… Get Me Out Of Here in 2012.

“We welcome Nadine Dorries to the role of Culture Secretary – the sixth person to occupy the post in the last four years,” ISBA director general Phil Smith says.

“Our members need certainty to enable them to help drive the economic recovery.

“They also need a government which engages meaningfully with industry to shape its future direction; which reaffirms its support for the gold standard self-regulatory system; and which is willing to hear evidence in order to make policy that will make a real difference.

“Advertising is at the heart of ‘building back better’. We look forward to discussing with the new culture secretary how the investment we make and the technology we employ can play their part in meeting the challenges that we all agree are urgent.”

Heineken and Daniel Craig celebrate the release of No Time To Die

Dutch beer brand Heineken and James Bond star Daniel Craig have teamed up to mark the release of 007’s latest film, No Time To Die.

Produced by the Smuggler agency, the 30-second ‘Worth The Wait’ ad makes reference to the film’s delayed release, pushed back due to Covid, with Craig waiting patiently before he can enjoy a sip of beer.

“Heineken has been a proud partner of James Bond films since 1997,” explains global head Heineken brand Bram Westenbrink. “So, like all Bond fans, we also can’t wait for No Time To Die to hit cinemas.

“That said, we believe some things really are worth waiting for. And now we can prove it.”

That proof comes thanks to a Heineken survey of 115 drinkers that found that 41% of participants who waited 20 minutes before taking a swig from a glass of beer enjoyed higher satisfaction levels than those who grabbed for their chilled lager straight away.

The research found that the ideal sweet spot for waiting before taking that first sip is 6.4 minutes.

Wednesday, 15 September

TikTok pushes out support for user mental wellbeing

Social media platform TikTok is supporting users struggling with their mental health with a host of features, including a function that redirects searches for suicidal terms to helplines.

TikTok is rolling out new wellbeing guides to support people who share their personal experiences on the platform, guided by charities International Association for Suicide Prevention, Crisis Text Line, Live For Tomorrow, Samaritans of Singapore and Samaritans (UK).

The intervention function directs users to local suicide prevention charities when searching for words or phrases such as ‘suicide’.

TikTok also provides tips to users on how to responsibly engage with someone struggling with mental health or in distress.

Content creators have been approached to share their personal experiences with mental wellbeing to provide advice for users to seek support and advice on how to speak to family members.

The social media company says in a statement: “We care deeply about our community, and we always look for new ways in which we can nurture their wellbeing. That’s why we’re taking additional steps to make it easier for people to find resources when they need them on TikTok.”

Google taps Marcus Rashford in call for societal unity

Google is launching a campaign to encourage people to use its search engine to ask questions and understand the UK’s diverse society, in a bid to spur unity.

Created by agency Uncommon, the ‘Hands Raised’ film includes footballer Marcus Rashford MBE, encouraging people to learn and better understand others.

The film focuses on individuals in moments of uncertainty, surrounding conversations such as race, religion and mental health.

It depicts a teenager seeing Muslims pray outside a mosque, a man uncomfortable initially at a ceilidh and young people questioning who can greet with the term ‘wagwan’.

Halfway through the film a young black boy with his white mother stand in front of the Marcus Rashford mural in Manchester, which was defaced following the racist backlash against players after England’s Euros 2020 defeat.

The film then cuts between Google searches of the above moments and scenes of them being resolved by talking and interacting. It ends with a shot of Rashford saying “It’s not our questions that define us — it’s what we do with the answers.”

The campaign will be supported by a YouTube activation called ‘The Ally Complete Challenge’, featuring a range of celebrities.

The campaign launches this week on TV, online and social, running until mid-October.

Google says it wants its platform to be used to “remove the barriers and stigma around tackling these queries and encourage the behaviour to ask and learn.”

Apple updates smartphone line with iPhone 13

Apple has unveiled the iPhone 13 Pro and iPhone 13 Pro Max, models it claims push the boundaries of smartphone technology.

The standout feature for the smartphone line is a cinematic video mode on the camera, which allows users to change focus on subjects even after recording, a feature CEO Tim Cook says is unique to the smartphone.

The Pro version differs through the camera with an extreme zoom mode telephoto in the main camera and an ultra-wide option in the selfie snapper.

In an upgrade from its predecessor, the smartphone features a display with an adaptive refresh rate up to 120Hz, a 1TB storage option and the A15 Bionic processor, which the brand claims is “more powerful than the leading competition”.

The iPhone 13 Pro and iPhone 13 Pro Max will be available in four colours – graphite, gold, silver and new colour sierra blue. Pre-orders begin 17 September, with availability beginning 24 September.

“iPhone 13 Pro and iPhone 13 Pro Max make up our most pro iPhone line-up ever with the biggest advancement for our camera system, the best battery life ever in an iPhone, and the fastest performance of any smartphone, setting a new standard for iPhone and enabling incredible experiences never before possible,” says Apple senior vice-president of worldwide marketing, Greg Joswiak.

Lucozade looks to energise young people

Sports drink brand Lucozade is partnering with youth development platform Apprentice Nation to engage with young people and build up their core skills for work and life.

Government figures show the rate of inactivity among young adults is almost at an all-time high and unemployment is significantly greater for young people (13.1%) compared to the rest of the population (4.7%). Furthermore, people from minority communities are twice as likely to be unemployed.

Lucozade will use its brand recognition and scale to recruit participants and drive awareness of Apprentice Nation across the UK and Ireland.

The brand is aiming to boost confidence among 16-24-year olds through music and collaborating with Apprentice Nation on a series of webinars and on-demand content featuring artists from an upcoming concert.

It will also specifically set up and run a platform that provides free-to-access content called ‘Unlock Your Potential’.

The partnership also supports the company’s wider ‘Growing for Good’ vision, which aims to invest in communities as part of its ‘Giving Back to Society’ values.

For the past three years parent company Suntory Beverage and Food (SBF) GB&I has run B Active, a peer-to-peer sports-for-development programme in association with Active Communities Network.

Since 2018, the initiative has assisted young adults living in some of the UK’s most deprived communities in London, Manchester, Belfast, Hull and Newport.

More than 10,000 young adults participated in B Active across some of the most deprived areas in the UK, with almost 4,000 taking up opportunities to volunteer and over 700 gaining vocational qualifications.

Matt Riches, SBF GB&I strategic partnerships lead says: “Lucozade will be leveraging its scale and reach to drive awareness of Apprentice Nation and the Unlocking Your Potential curriculum with a high-profile multi-media campaign launching this autumn.

“Our Suntory-inspired ‘Growing for Good’ vision drives the company, and our brands like Lucozade forward to create purposeful collaborations in an authentic way.”

Yamaha positions as a total music company

Japanese electronics brand Yamaha is launching a major campaign in a bid to shift the perception of the brand being known for only one product category.

The aim of the ‘Let’s Make Waves’ campaign, created by agency Zag, is to showcase Yamaha’s musical instrument and audio equipment ranges.

At the heart of the campaign is an “uplifting and emotive film” showing five music moments in which individuals from different backgrounds experience and create music in different ways. The film ends by revealing all individuals, although physically apart, are connected through music.

The campaign will roll out first in the UK and Germany and other countries next year.

Yamaha Music Europe head of brand Sebastian Krenmayr says: “Music feels more important than ever right now, playing a truly beneficial role in bringing people together and helping them to feel good.

“We wanted to show how our vast range of products gives everyone the tools to ‘make waves’ by expressing themselves through sound and music – whether they are just starting to learn a musical instrument or listening to their favourite music at home, right up to emerging artists, professional performers and renowned music producers.”

Tuesday, 14 September

Ocado revenues tumble following fulfilment centre fire

As it marks the one-year anniversary of its partnership with Marks & Spencer, the third quarter of 2021 has seen Ocado’s revenues fall by 10.6% to £517.5m.

According to the online supermarket, the notable decline has come as a result of the major fire in July at the Erith Customer Fulfilment Centre. Over the first six weeks of the quarter, before the fire, Ocado was performing in line with expectations, with revenue marginally down 1.8% as a reflection of the exceptionally strong growth recorded last year during the height of the pandemic.

Customer acquisition levels were also high over the first six weeks, with an additional 64,000 new customers bringing Ocado’s total to more than 800,000. Orders per week increased by 22%.

In the remaining seven weeks of the quarter, however, revenue declined by 19%, amid cancelled orders and a temporary reduction in capacity. Ocado estimates that it lost a total of 300,000 orders over the period, or around £35m of revenue.

Nevertheless, the retailer says it expects to deliver strong revenue growth in 2022 as it continues to increase its capacity to fulfil orders.

On 1 September Ocado marked its one-year anniversary as a joint venture with Marks & Spencer. M&S products now represent 29% of the average Ocado basket.

Ocado’s chairman, Tim Steiner, says: “Despite the challenges we faced in the period, I am delighted to report that Ocado Retail is performing well, improving the customer experience even further and continuing to grow the business in a post-lockdown environment.

“With a market leading customer offer and technology, we are confident Ocado Retail will continue to grow market share as we help them to roll out even more capacity and we look forward to Christmas and delivering strong growth in the new financial year, with our long term outlook as compelling as ever.”

Tesco kicks off zero-waste trial in 10 stores

Tesco is to offer customers of 10 east England stores the opportunity to buy products in reusable packaging which can be returned to store when finished, so they can be cleaned, refilled and used again.

The zero-waste range of 88 products includes well-known brands such as Persil, Fever Tree, Carex, Tetley Tea and BrewDog. Tesco also has 35 own brand essentials in the range, from pasta and rice to oil and sugar. Further products are to be added throughout the year.

The trial is being run in partnership with global reusable packaging platform Loop. Tesco customers can visit the Loop fixture in store and pick up products from the range, paying a small deposit starting at 20p on each reusable product at checkout. This is refunded via an app when the customer returns the packaging to a collection point in the store at a later date.

The stores included in the trial include Milton Keynes Kingston, Northampton South, Evesham, Stratford Upon Avon and Loughborough Rushes.

Tesco estimates that if customers of all 10 stores switched just three items of their weekly shop to their zero-waste alternative, the packaging would be used and reused more than two and a half million times a year.

“We are determined to tackle plastic waste and one of the ways we can help is by improving reuse options available to customers,” says Tesco Group CEO Ken Murphy.

“Bringing Loop to our stores is a significant milestone in this journey. With 88 everyday products available, we’re giving customers a wide range of options and we’ll learn as much as we can from this to inform our future packaging plans.”

The launch of Loop in Tesco stores follows a year-long online pilot, launched in July 2020, that allowed customers to order and return products in reusable packaging to and from their doorstep.

ISBA launches ‘Code of Conduct’ to tackle dodgy influencer marketing practices

Following the Advertising Standards Authority’s (ASA’s) crackdown on influencers violating UK advertising rules, ISBA has released a ‘Code of Conduct’ to be used by brands, talent agencies and the influencers themselves.

The code a guide to best practice in influencer marketing rather than a new set of rules and regulations. Driven by ISBA’s advertiser members wanting to address the negative issues surrounding influencer marketing, the aim is for the code to become an industry standard.

The code hopes to deliver transparency for consumers around influencer advertising and photo editing techniques, to enable authentic and effective influencer marketing, and to improve relationships between brands, agencies and the influencers themselves.

ISBA’s director-general, Phil Smith, says there is “no excuse” for influencers and brands failing to disclose when an ad is an ad or misleading consumers with photo editing, and points to the difficulties brands face in demonstrating the ROI on influencer activity.

“Influencer marketing is a powerful tool. In a world where advertising has suffered from a loss in trust, and where consumers are more likely to believe in the recommendations of a peer or ‘someone like me’, influencer campaigns offer the chance for individuals, agencies, and brands to work together, using new platforms to reach audiences in engaging ways,” Smith says.

“At its best, influencer marketing allows for authentic, personalised ads, delivered in a transparent way. However, if done incorrectly, it can cause reputational damage to influencers and brands alike.”

Earlier this year, the ASA announced an “escalation” in sanctions against ongoing non-compliance among influencers and the brands using them. The regulatory body put brands and influencers “on notice” in March, launching a dedicated webpage to expose influencers who repeatedly fail to properly disclose advertising on their social media channels. Lucy Mecklenburgh, Jodie Marsh, Chloe Ferry and Chloe Khan were the first to be named and shamed.

BrewDog brings in former Asda boss as chairman

Beer and spirits company BrewDog has hired experienced retail boss Allan Leighton as chairman, three months on from facing accusations of operating an internal “culture of fear”.

Leighton was chief executive of supermarket Asda from 1996 to 2000 and of jewellery retailer Pandora from 2013 to 2014. He is currently chairman of The Co-operative Group, a role he has held since 2015, as well as PizzaExpress, and was non-executive chairman of Royal Mail from 2002 to 2009.

BrewDog said Leighton will act as a “mentor” to CEO James Watt, “providing experienced counsel on leadership and governance matters” while also helping to expand the brand’s international footprint. His appointment comes as BrewDog prepares to list on the stock market.

Leighton replaces Blythe Jack, managing director at private equity company TSG Consumer Partners, who became interim chair at BrewDog earlier this year to oversee a governance review addressing the accusations levied against the brand’s leadership in an open letter written by former staff.

The brewer was accused of a “toxic attitude”, and of using “lies, hypocrisy and deceit” to generation positive PR. Published on Twitter, the letter was initially signed by around 60 former employees, a number which subsequently grew to more than 250.

In the following months BrewDog has continued to find itself in hot water. The brand was accused of lying to customers with a promotional campaign offering solid gold beer cans, which were later found to be gold-plated brass, and also fell foul of UK advertising rules, with ads for its hard seltzer brands banned by the Advertising Standards Authority (ASA) for making “misleading” and “irresponsible” health claims.

Nevertheless, the brand has just closed a world record equity crowdfunding round, raising £30.2m from 78,000 “equity punks”.

Grocery sales fall as pre-Covid behaviours return

With “big lifestyle changes” on the horizon, take-home grocery sales fell by 1.9% year-on-year during the 12 weeks to 5 September, according to the latest data from Kantar.

Sales remain 8.7% higher than pre-Covid levels, reflecting the pandemic’s continued impact on the market. However, with commuters due to head back into offices and children returning to school this month, Kantar’s head of retail and consumer insight, Fraser McKevitt, expects further changes to the way in which people shop.

Already, the first week of September produced the highest supermarket footfall all year outside of Easter.

“That suggests a hint of change, and could see shoppers shun the ‘big shop’ in favour of more frequent top up buying,” McKevitt says. “But we shouldn’t expect to shift from habits learning in lockdown straight back to pre-Covid patterns overnight. It’s most likely that the needle will settle somewhere in between.”

According to McKevitt, Kantar has already seen “signs of fatigue” around home cooking, with sales of chilled ready meals up 11%.

Online, the average shop is now worth nearly £17 less than at its peak at the start of the pandemic at a total of £78.28. Online grocery’s market share has fallen from 13% four weeks ago to 12.2% this month, the lowest level since May 2020.

Waitrose and Tesco were the only major supermarkets to record year-on-year sales growth, at 2.2% and 0.2% respectively. As a result, Waitrose increased its market share to 5.1%, a fifth consecutive increase for the grocer. Tesco also won share, gaining 0.5 percentage points to account for 27.3% of all sales.

Sainsbury’s claims the next highest share at 15%, while Asda takes 14.3%, Aldi takes 8.1% and Lidl takes 6.1%.

Meanwhile, like-for-like grocery prices rose by 1.3% year-on-year in the past four weeks. According to McKevitt, this comes as supermarkets begin to focus on providing everyday low prices rather than sales promotions.

MG Motor UK hires first head of digital

Automotive brand MG Motor UK has poached Honda’s Patrick Klaus Beyer for its new head of digital position, with Beyer to take responsibility for digital marketing across the brand.

He will have one direct report looking after digital and social media, and will himself report into marketing director David Pugh.

Beyer has overseen digital marketing at Honda since July 2018, and prior to that held several marketing roles at both Jaguar Land Rover and Toyota Motor Europe.

MG Motor UK highlighted his “extensive” experience working on electric vehicles (EV), having worked on electric and hybrid model launches for all three of his previous companies. The motor company currently offers six models in the UK, including the all-electric MG5 EV.

“The MG brand is growing and has huge potential. With good products, amazing EVs, a strong dealer network and an expanding marketing team, it’s a fascinating time to be part of its evolution and help grow the brand in UK,” Beyer says.

Monday, 13 September

Primark hails ‘critical role’ of digital marketing as sales grow

Primark is progressing the design and development of a new digital platform and stepping up the recruitment of talent to create a “digital capability within the business”, as the value retailer highlights the “critical role” digital will play in the marketing mix.

The brand plans to launch a “new and improved customer-facing website” in 2022, which will allow Primark to showcase a larger proportion of its range and provide customers with availability by store. There is also an intention to strengthen the digital marketing capability in order to deliver “more personalised content” to customers.

In a trading update, Primark says it expects sales in the second half of the financial year to reach £3.4bn. The retailer’s operating profit margin during the period benefitted from a significant reduction in store labour costs and lower store operating costs, and is expected to be over 10%. The profit forecast for the full year is now ahead of the profit delivered in 2020.

Like-for-like sales in the third quarter were 3% ahead of the comparable period two years ago, reflecting “very strong trading” in the UK and European regions where stores reopened. Primark says customers returned to stores with “enthusiasm” and sales reflected pent-up demand with “very high” basket sizes.

UK sales were, however, affected by the “rapid and significant increase” in the number of people required to self-isolate following contact tracing alerts in late June and early July. Since the self-isolation rules relaxed in August, Primark’s like-for-like sales have gone from a decline of 24% in the first four weeks of the quarter to a decline of 8% in the last four weeks. Data shows that in the 12 weeks from 31 May to 22 August the retailer claimed the same value share of the total UK market as it did two years ago.

Primark notes a continuation of the trend for ‘comfort living’, with strong sales of leisurewear, such as leggings and cycle shorts, and continued demand for seam-free matching separates for women. The retailer also highlights a “good response” to the launch of new licensed product, with its latest womenswear tie-up with Disney proving particularly popular. Sales of autumn/winter ranges have started well, especially the back-to-school collection.

While the pandemic has slowed its progress in developing a pipeline of new shops, Primark says it expects to see an “acceleration” in new store openings in future years. The business did open 15 stores globally this year, including one in the UK, as well as downsizing three of its outlets in Germany.

During the next financial year, the business plans to add a net 0.5 million sq ft of additional selling space, including four new stores in Italy, four in Spain and one store each in the US, the Czech Republic and Ireland.

Channel 4 attracts 9.2 million viewers for US Open broadcast

Channel 4 has hailed its last-minute deal with Amazon Prime to air Emma Raducanu’s US Open victory as “profoundly valuable public service broadcasting”, with coverage attracting a peak audience of 9.2 million.

The broadcast of the final on Channel 4 claimed a 39.9% share of the total audience on Saturday night and 48% slice of viewership among 16- to 34-year-olds.

It is rumoured the deal with Amazon Prime cost Channel 4 a seven-figure sum, money the streaming service says it will donate to grassroots tennis initiatives. In addition to Channel 4 showing full Amazon Prime coverage of the match, the streaming giant gained brand exposure by having its logo on screen throughout the final. Back in 2018 Amazon paid £30m for the rights to show the US Open in the UK.

According to Channel 4 chief content officer Ian Katz, the broadcaster only secured the deal late on Friday evening. Last night Katz tweeted that moments like Raducanu’s victory are “what Channel 4 was made for”, adding: “It’s a perfect example of the kind of nimble, uncommercial, but profoundly valuable public service broadcasting that a purpose-driven Channel 4 can deliver.”

Secretary of State for Digital, Culture, Media and Sport Oliver Dowden tweeted his support of the deal, saying it was “fantastic” that Amazon had agreed to share the coverage with Channel 4 free to view.

This week a government consultation closes on whether to privatise Channel 4, something the broadcaster opposes.

Ryanair warns of ‘dramatically higher’ prices for holidaymakers

Ryanair CEO Michael O’ Leary has warned holidaymakers to expect “dramatically higher” prices next year given the shrinking capacity for short-haul flights, coupled with rising demand.

O’Leary told The Sunday Times there will be 20% lower short-haul flight capacity in Europe in 2022 as other airlines have had to reduce their fleets to cope with Covid-19. The Ryanair CEO pointed to the reduction of 6 million seats from Thomas Cook, 8 million seats from Flybe, 24 million seats from Norwegian and Alitalia’s decision to reduce its fleet by 40%.

“I think there will be a dramatic recovery in holiday tourism within Europe next year. And the reason why I think prices will be dramatically higher is that there’s less capacity,” said O’Leary.

The Ryanair boss also claimed that rising environmental taxes would be passed onto consumers in the form of rising ticket prices. He argued price increases would lead to greater consolidation within the airline industry. Only last week it emerged EasyJet had rejected a takeover bid from Hungarian airline Wizz Air.

However, O’Leary also confirmed that Ryanair, which is planning to open a new base at Newcastle Airport in 2022, would cut prices for winter travel in a bid to “grab market share everywhere”.

Gousto accelerates brand investment with return to experiential

Recipe box company Gousto is ramping up its brand building investment and expanding on its ‘Give it Some’ platform with a return to experiential marketing.

Running from 17 to 18 September, the ‘Flavourlust’ immersive food experience will give visitors the chance to explore the sights, sounds and smells of global foodie destinations from Thailand and India to Brazil, while eating a range of dishes from Gousto’s new Street Food range.

The brand has partnered with spiced gin brand Opihr and chocolate company Tony’s Chocolonely to offer in-event dessert and drinks experiences. Working with agency Manifest, Gousto sees the Flavourlust experience as an opportunity to inspire an emotional response and drive consideration.

“Gousto is all about bringing variety and excitement to dinner time with over 44 different cuisines on our menu and thousands of recipes in our repertoire,” says vice-president of brand Anna Greene.

“The immersive Flavourlust event is an opportunity to showcase our new Street Food range, whilst bringing people the far-flung foodie adventures they have been missing over the past year.”

The recipe box brand experienced a “record breaking 2020”, during which the company achieved its first full-year of profitability. Gousto now supplies more than 8 million meals a month and has recently grown from 50 to over 60 recipes a week, increasing the variety on offer to customers.

The company is aiming to double its workforce again in 2021 and next year is poised to invest “significantly” in capacity and technology, with the creation of two automated fulfilment centres. Back in May the brand embarked on a hiring spree for marketers, saying it had “proved” marketing’s worth, five months on from the launch of the Give It Some platform aimed at making Gousto a household name.

M&S poised to close French stores amid Brexit pressure

The future of Marks & Spencer’s 20 French stores is in doubt as Brexit border controls continue to take a toll on the retailer’s supply chain.

The Guardian reports that, while the extent of closures is unclear, the final decision will likely depend on the company’s two French franchise partners.

Chairman Archie Norman highlighted the impact of Brexit on the M&S supply chain in July, warning the retailer had already decided to delist products for Northern Ireland, particularly those for the Christmas period, given the risk the transportation of fresh food could be impeded by the new controls. In the summer Norman also claimed that “byzantine” regulations were meaning only two-thirds of M&S sandwiches were making it to stores before their shelf-life expired.

The retailer told the Guardian that given new customs arrangements it is taking “decisive steps to reconfigure” its European operations, having already made changes to exports to the Czech Republic. Currently in its Czech stores fresh M&S Food products have been switched out for items with a longer shelf-life.

“We operate a franchise business in France and are undertaking a review of the model with our two partners,” M&S added.

The retailer initially pulled out of France in 2001, closing its 18 stores to focus on turning around the UK business. By 2011, M&S felt the time was right to return, with then chief executive Marc Bolland telling French customers the retailer had “changed”. At the time the decision was taken to focus on women’s fashion and food, rather than stocking the full M&S range.