Made.com, Manchester United, Lidl: 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.

Kwarteng poised to unveil ‘biggest tax-cutting event for 34 years’

Chancellor Kwasi Kwarteng is expected to unveil a series of extensive tax cuts and growth targets when he announces his mini-budget later today.

According to the BBC, a combination of cuts to National Insurance, corporation tax and stamp duty could result in the UK’s “biggest tax-cutting event for 34 years”, as the government scrambles to tackle the energy crisis.

Introduced by former chancellor Rishi Sunak in April to fund a Covid catch up for health and social care, the 1.25 percentage point increase in employee and employer national insurance contributions will be reversed on 6 November, meaning £13bn less generated in tax for the state.

It is predicted Kwarteng will keep corporation tax at 19%, pausing a rise of 25% scheduled for 1 April 2023, as well as cutting stamp duty, ending the cap on bankers’ bonuses and creating ‘low-tax zones’ nationwide. Should these tax-cutting measures go ahead, the cost to the Treasury would be at least £30bn, the BBC reports.

Given statements made by Liz Truss in her Conservative leadership campaign, it is also expected that green levies, raised to fund insulation schemes and renewable energy, could be scrapped in a bid to save households around £150.

Kwarteng could also slash income tax, which currently stands at 20% for people in England, Wales and Northern Ireland earning £12,571 to £50,270 a year.

In terms of support for the energy crisis, a price cap for the next two years of £2,500 on the average household’s annual energy bill has already been announced by Truss, while on Wednesday news finally came that businesses would see their bills frozen for at least six months.

Kwarteng is refusing to allow the independent Office of Budget Responsibility to release forecasts assessing the economic impact of the tax cuts and increased borrowing in today’s mini-budget.

In a statement, the government said that given the “exceptional circumstances” facing the country, it had to move with “immense speed” to provide energy bill support and “kickstart economic growth”. The chancellor is expected to hold a full budget later this year.

Made.com to cut more than a third of staff amid ‘market volatility’

Online furniture retailer Made.com is set to reduce its staff headcount by more than a third amid high supply chain costs and falling sales.

An email to staff by chief executive Nicola Thompson, sent last week and seen by the Financial Times, warned the business needed to propose “some very difficult but necessary changes” as market conditions look set to become increasingly challenging.

Around 35% of Made’s workforce is likely to be let go, with consultation processes under way. In the email, Thompson referred to “unprecedented levels of market disruption and prolonged market volatility”.

The company also plans to consolidate its supply chain, reduce warehouse capacity to reflect lower levels of demand and outsource customer service to a third party, the FT reports.

In a trading update in July, Made announced group gross sales for the first half of 2022 were down 19% on last year. At the time, the company said: “Recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at financially attractive rates challenging.”

Made completed an IPO in June 2021, as it looked to accelerate growth both in the UK and internationally. However, the company has issued profit warnings three times this year, prompting a collapse in its share price.

Other measures reportedly included in Thompson’s email are plans to appoint a chief operating officer and focus on efficiency, cost reduction and stock clearance.

Manchester United hails ‘record’ ecommerce sales despite growing losses

Manchester United claims to be reaping the rewards of making fan engagement a “strategic priority”, as the football club notched up record ecommerce sales, membership and digital engagement in 2022.

The Premier League side made total revenues of £583.2m in the 12 months to 30 June, up 18% on last year. This comprised of £257.8m in commercial revenue (up 11%), £214.9m generated in broadcast revenue (down 15.7%) and match day revenue of £110.5m, which grew by 1456.3% versus the lockdown affected 2020/2021 season.

Sponsorship revenue hit £147.9m, up 5.5% on the previous year, which the club attributes to the impact of new agreements post-Covid. Retail, merchandising, apparel and product licensing revenue rose 19.5% to £109.9m in 2022, buoyed by the return of fans to Old Trafford and the reopening of the club megastore.

During 2022, Manchester United launched three new principal partnerships, signed five new global partnerships and renewed eight global and regional partnerships. The end of lockdown saw the club hold its first in person ‘#ILoveUnited’ event since the onset of Covid in Miami, attended by more than 2,000 fans and featuring activations from 22 global partners.

Club achieved record ecommerce revenue in 2022, close to double 2021 levels. This momentum appears to be continuing into the 2023 fiscal year, with the Premier League side achieving record first week online sales for its new 2022/2023 home and away kit.

Over the past year the club upgraded its app, which drove a record number of subscriptions, registrations and daily active users, making the Manchester United app the most downloaded sports app in more than 100 markets. In excess of 2.5 million users watched the club’s summer tour match content via the app in 220 markets, contributing to “record breaking engagement and video views.”

In total, the Premier League team generated more than 2.8 billion digital interactions, up 72% on 2021, and 7.3 billion video views across all global platforms. The club is putting greater emphasis on its digital presence, having created a digital products and experiences department to explore new revenue streams such as NFTs.

The football club has also been making significant marketing hires. Earlier this month Manchester United appointed ex-Formula One marketing boss Ellie Norman as chief communications officer, responsible for fan engagement, communications, content and brand, as well as overseeing digital, social media, PR and brand identity.

Norman is joined by Matt McKie, former head of global marketing at the International Olympic Committee (IOC), in the role of director of consumer marketing.

Despite making a net loss of £115.5m in 2022, up 25.3% on the previous year, during the fourth quarter the club’s losses did narrow to £70.7m, a 34.4% improvement on the same period in 2021.

Looking ahead to 2023, Manchester United expects to notch up revenues of £580m to £600m despite participating in the less lucrative Europa League, as it eyes a pre-adjusted (EBITDA) profit of between £100m and £110m.

Lidl becomes best-paying UK supermarket after fresh wage increase

Lidl has taken on the mantle of best-paying UK supermarket after raising staff wages for the second time this year.

The supermarket chain announced that entry-level hourly rates will increase from £10.10 to £10.90 outside London, and from £11.30 to £11.95 within the M25.

The new rates, which will benefit over 23,500 employees, will come into force on 1 October and represent an increase of between 10%-14.5% since this time last year.

Lidl’s new hourly rate is an increase on the current highest level paid by rival Aldi – of £10.50 and hour – which came in last month.

Ryan McDonnell, CEO at Lidl GB, says the company is introducing the rate increases “to reflect the key role and tireless efforts” of its employees. The rise represents a £39.5m investment, with the two pay rises in eight months costing the business a combined £50m.

“The role that we as a discounter play in giving households access to good, affordable food cannot be underestimated, now more than ever,” adds McDonnell.

“But the ongoing commitment and dedication of our colleagues in making it all possible for our customers cannot be underestimated either – our business simply would not run without them.”

The move comes as several retailers look to support their workers amid the rising cost of living. This week Marks & Spencer raised staff pay for the second time this year, while Sainsbury’s has announced its 127,000 hourly paid workers will get a 25p an hour increase to £10.25 from next month.

Outdoor ads ‘hacked’ in bid to shame airlines and agencies

Posters for airlines such as KLM, Ryanair and EasyJet have been ‘hacked’ by activists, swapping advertising messages with satirical artworks designed to highlight the impact of aviation on the climate crisis.

Appearing in more than 500 sites across Europe, including in London, Bristol, Manchester, Sheffield and Brighton, the artworks also accuse the advertising industry of seeking to “cover up” the environmental damage caused by flying.

According to the Guardian, all but one of the 500 sites were used without permission by activists and artists from the anonymous Brandalism group and the Subvertisers International network across Europe.

One guerrilla poster in Tottenham, London, played on KLM’s ‘Fly Responsibly’ tagline with the words: ‘Creating a less sustainable future’. The artist, Michelle Tylicki, also claims on the poster the airline is “currently being sued for greenwashing” and cites the original ad as being created by agency Dentsu Benelux.

Another hacked ad in Brighton sees Ryanair renamed ‘Ruinair’, accompanied by the line: ‘Low fares to plastic island. World trashing prices from €66.60.’ The artwork features two air hostesses wearing gas masks.

A further poster promotes the Badvertising campaign ‘The Ministry for the Climate Emergency’, aimed at raising awareness of what the group calls ‘#BrainPollution’ caused by the advertising of “high-carbon products and lifestyles.” The ad reads: ‘Got planes on the brain? Airline advertising is fuelling the climate emergency.’

Tona Merriman from Brandalism told the Guardian the “allure and glamour of high-carbon lifestyles” has been “purposefully crafted” by the advertising industry, adding: “Advertising agencies such as Ogilvy, VCCP, Dentsu, DDB Munchen need to consider their role in driving up emissions for airlines they work for such as British Airways, Easyjet, KLM and Lufthansa. We call on employees in those firms to refuse work for high carbon clients.”

Thursday, 22 September

TikTok strives for ‘balance’ with political campaign fundraising ban

TikTok will be banning political fundraising on its platform worldwide, with politicians and governments now blocked from using any monetisation tools on the app.

Political advertising itself was already banned on the app, but this new move further restricts political accounts.

TikTok say: “By prohibiting campaign fundraising and limiting access to our monetisation features and verifying accounts, we’re aiming to strike a balance between enabling people to discuss the issues that are relevant to their lives while also protecting the creative, entertaining platform that our community wants.”

Only in August this year did the House of Parliament delete its official TikTok because of security concerns, with this updated policy on political fundraising coming just ahead of the US’s midterm elections.

In 2020, then president Donald Trump was vocal in his mistrust of the platform, calling for it to be banned in the states over fears the Chinese government was interfering in data collection.

TikTok makes clear its stance on political advertising, saying that while paid ads on the platform, and creators paid directly to promote content have been banned for a while, the company recognises “there will be occasions where governments may need access to our ads services” such as with the Covid-19 booster campaigns.

Not On The High Street rebrands as platform moves away from ‘traditional gifting occasions’

Online marketplace Not On The High Street has launched a new brand campaign and rebrand, as the platform looks to move away from its association with “traditional gifting occasions” in favour of being a place for “all of life’s gifting moments”.

The platform, which launched in 2006, is now focusing on bringing in younger audiences with what it describes as a “vibrant, playful” new visual identity.

Its new ad campaign taps into the relatability of gift-giving, highlighting the range of occasions consumers could use the marketplace for, from “getting ghosted to getting a bad haircut”.

Brand and creative director at Not On The High Street, Lorna Brown, says: “We’ve given the brand a fresh new look and our new campaign represents a key milestone as we broaden our appeal to a new generation of gift givers.”

The rebrand also includes a new logo for the brand to complement its marketing campaign.

Wagamama launches new student focused campaign with YouTuber amid freshers weeks

As students up and down the country enter their university halls for the first time, Wagamama has launched its “noodle union”, which the restaurant chain describes as a “safe and inclusive space where Wagamama and students come together and connect over shared values, passions and modern culture”.

At its helm is YouTuber Niko Omilana, who previously ran for Mayor of London in 2021. “Niko believes in creating a nation fuelled by steaming ramen and katsu curry with his key policy being to nourish the student population” the company says.

As part of this ramped up student offering, each student who signs up to join the ‘noodle union’ from today will be entered into a prize draw, which includes 100 “limited edition golden chopsticks” giving students £300 of free Wagamama food.

The chain also says it will be introducing more benefits for students during the “very special” National Katsu Curry Day on 27 September.

Senior brand manager at Wagamama, Max Simons-Dukes, says: “We know the current climate is challenging for university students, which is why providing them with real value is at the heart of this campaign. And who better to collaborate with on this, than Niko Omilana, the first ever president of our Wagamama noodle union.”

EA Sports’ FIFA 23 collabs with Ted Lasso ahead of launch date

The fictional football team from Apple’s TV series Ted Lasso, AFC Richmond, is set to join the ranks of real-life football teams in FIFA 23, launching on 30 September.

The collaboration with the game will see characters including Lasso, played by actor Jason Sudeikis, and other players such as Roy Kent and Sam Obisanya, as well as the wider team, able to be used in play against the world’s most famous football teams.

The introduction comes ahead of next year’s change to the game, as EA Sports’ partnership with FIFA is set to end, and the game will be known as EA Sports FC.

Sudeikis says: “As long-time fans of FIFA, having Ted Lasso and the whole AFC Richmond squad incorporated into the newest version of the game is truly a dream come true for myself and the rest of the fellas.”

Ted Lasso’s third series is currently in the works, with fans awaiting a release date.

“Our cast and crew work tremendously hard on this show, and we are flattered that it resonates with so many folks. We look forward to our fans having the opportunity to play with, play as, and even play against their favourite AFC Richmond characters.”

Real living wage rises to £10.90 amid inflation

The Real Living Wage, which currently more than 390,000 workers and 11,000 businesses in the UK are signed up to, is set to rise to £10.90 an hour outside of London, a 10.1% increase.

The London Living Wage is also rising to £11.95 an hour. Research from the Cardiff Business School finds that Living Wage workers will have benefitted from more than £338m in extra wages since the start of 2022.

One in 10 employees now work for an accredited Living Wage employer, separate from the government’s National Living Wage, also known as the minimum wage, which is currently £9.50 an hour for adults over 23.

The increase comes amid tough conditions with the cost of living crisis biting, and fears for energy bills through the upcoming colder months. The director of the Living Wage Foundation, Katherine Chapman, says the “new rates will provide hundreds of thousands of workers and their families with greater security and stability during these incredibly difficult times.”

The number of businesses taking part in the scheme, 11,000, has doubled in the last two years, and includes the likes of Ikea, Burberry and Lush.

Wednesday, 21 September

Businesses to receive energy discount, government expected to announce

All businesses are set to receive a discount on their energy bills, under a scheme that the government is expected to announce later today (21 September).

Business secretary Jacob Rees-Mogg will outline a plan which will take effect for companies, charities and public sector organisations for six months from 1 October. The scheme will see the government attempt to limit costs for businesses by subsidising wholesale energy prices.

The move will effectively see a maximum cap put onto energy prices for businesses. The BBC reports that the limit is likely to be 21.1p per kWh for electricity and 7.5p per KWh for gas – a discount of a quarter to a third on current market prices.

While the general scheme is limited to six months, prime minister Liz Truss has signalled that “vulnerable” businesses could get more long-term help with their energy bills. In an interview earlier this week, she singled out pubs as an example of the kinds of businesses that may be eligible for longer-term help.

Earlier this week, pub chain Fuller’s warned that energy costs faced by the hospitality business were becoming “unsustainable”. It said that its own annual energy electricity bill was likely to increase from £8m to £18m.

Pernod Ricard has ads banned for featuring under-25s

Pernod Ricard has been ordered to ensure that none of its ads feature people under-25 or promote alcohol as something that could contribute to professional success after several Instagram posts from its whiskey brand Chivas Regal were found to be in breach of The Committee of Advertising Practice (CAP) code.

The Advertising Standards Authority (ASA) challenged five Instagram posts from the Pernod Ricard brand. It challenged some of the ads on the basis that they featured or appeared to feature someone under the age of 25 and some on the basis that they seemed to promote alcohol as something that could enhance your career or lead to success.

The age-related complaints were upheld. The Instagram posts featured music artist Santino Le Saint and interview Bisola Otun, both of whom were under 25 when the ads were filmed. The CAP Code requires that ads for alcohol should not show people who are, or appear to be, under 25 years of age in a significant role.

The second complaint, which related to a section of The CAP Code that says ads must not imply that alcohol can enhance mental or physical capabilities, was partly upheld. Pernod Ricard said that the depiction of whiskey-drinking by musicians in the ad was purely a celebratory act, and argued that there was no suggestion that the spirit was integral to the success depicted.

The ASA accepted that the alcohol was being used in a celebratory way. However, the complaint also questioned whether one of the ads which featured the line “it’s truly the original luxury whisky for ultimate success”, implied that the alcohol’s consumption could lead to success. This part of the complaint was upheld by the ASA.

Pernod Ricard was ordered to make sure the ads did not appear in their current form again.

Online shopping sales decline for 17th month in a row

August 2022 saw sales from online shopping decline for the 17th month in a row in the UK. Online retail sales were down 4.1% year-on-year last month.

The figures come from the IMRG Capgemini Online Retail Index. While online retail sales have been in decline for 17 months in a row now since May 2021, July’s figures had provided a glimpse of hope, as the rate of decline had been much lower than expected at -2.3%.

Month-on-month growth was down 6.2% against July, where a decline of 2% is more typical for this time of year. The 4.1% rate of decline for the month of August was also higher than the three-month average of 2.3%, but ahead of the six-month (-9.3%) and yearly (-17.8%) averages.

Despite record-breaking hot weather in the UK in August, the categories of garden, and beer, wine and spirits actually saw the sharpest declines year-on-year at -24.6% and -20.6% respectively. Clothing was the only category to see positive growth in August, at 2.8% year-on-year.

This summer has been a difficult one for online retailers says IMRG strategy and insight director Andy Mulcahy, with a great deal of apprehension about what the winter holds.

“Usually, the amount of money spent online increases and decreases interchangeably in line with activity retailers are undertaking, but across July and August we recorded five weeks of decline, which is rare; there will need to be a great deal of sales growth to make up for Black Friday and peak to be positive,” he says.

Butlin’s sold back to former owner for £300m

British holiday business Butlin’s has been sold back to the Harris Family Trusts, over 18 months after a group including the family sold the company to investment business Blackstone.

The Harris family is one of the three families that founded Bourne Leisure in 1964. Bourne is the parent company of Butlin’s and operates Haven and Warner Leisure holiday businesses. The family sold the Bourne business to Blackstone last year for around £3bn but retained a minority stake.

Now the Harris family is buying back the Butlin’s operating business for a reported £300m. This does not include Butlin’s property assets which were sold earlier this year to a private pension fund.

Butlin’s owns three holiday camps in Bognor Regis, Minehead and Skegness. At its height it had at least eight UK camps, and also ran a camp in Ireland as well as some hotels abroad in the Bahamas and Spain. Butlin’s now reportedly accounts for around 15 to 20% of Bourne’s earnings.

“We are delighted to reaffirm our love for Butlin’s and once again be the new owners of this great brand,” says Paul Harris, speaking on behalf of Harris Family Trusts.

“We look forward to working alongside the Butlin’s leadership team as they strive to deliver their strategic plan for the business and help them accelerate their investment plans to give our Butlin’s guests an even better holiday experience.”

The Gym Group looks to tackle ‘gymtimidation’ in campaign

The Gym Group is looking to make the public less conscious of their “gym face” in a new ad launched today (21 September).

Creative agency Lucky Generals has created a new brand platform for The Gym Group under the tagline:“we’re with you”. The brand’s mission is to break down barriers to fitness and the new platform emphasises the encouragement that the company aims to give to gymgoers.

Research has found that one of the main barriers to fitness is “gymtimidation” – people feeling self-conscious and lacking confidence in the gym. The campaign video aims to tackle these feelings head on, or rather face on.

It features a humorous high-energy soundtrack highlighting “gym face”, the face that people make when working out at the gym. “We’ve all got a gym face,” assures the soundtrack, which was recorded by stand-up comic and actor Will Hislop.

“We’re determined to reassure the nation that we understand their fears and will be there to support and cheer them on in their fitness journey – our whole group is behind them. We’re proudly mass market; but low-cost no longer needs to mean low quality and we wanted to reflect this confidence in our offering within the campaign,” says The Gym Group brand and marketing director Emily Kortlang.

Tuesday, 20 September

Porsche aims to raise €75bn in IPO, making it one of Europe’s biggest ever

Luxury car brand Porsche, which is owned by Volkswagen, is aiming for a value of €75bn (£65.8bn) when it is floats on the Frankfurt stock exchange later this month.

It would make it one of the largest IPOs in Europe to date.

Porsche is offering 911 million shares when it goes public – in homage to its most famous car model – which will be divided into 455.5 million preferred shares and 455.5 million ordinary shares.

Volkswagen is planning to float 12.5% on 29 September and has priced shares at between €76.50 and €82.50.

It will use the cash injection to help fund the switch to electric vehicles (51%) and for a one-off special dividend to shareholders (49%).

Prime minister’s plan to ditch sugar tax hits road block

Prime minister Liz Truss has reportedly hit a number of legal and parliamentary procedural issues in her plan to reverse the sugar tax on soft drinks.

She outlined her desire to scrap the soft drinks industry levy, which was first introduced in 2018, last week.

But according to The Guardian, Whitehall sources have said she faces a number of obstacles and there is a “question mark” over how the prime minister will be able to reverse the sugar tax.

She is also facing growing backlash from health experts over her plan, with many describing it as “dangerous” and “nonsensical”.

Last week, Truss said she and new health minister Thérèse Coffey were also looking to drop the incoming advertising rules on foods that are high in fat, sugar and salt (HFSS) and “cut red tape” for businesses.

News of the plan to scrap the ban on HFSS advertising was welcomed by the industry last week, with ISBA director of public affairs Rob Newman saying: “It’s entirely right that the new health secretary is looking again at this.”

Cost of living crisis slows plant-based boom

Rising inflation has put an end to the hope of a resurgence in plant-based meat sales, as shoppers are no longer willing to pay a premium for products, according to new data.

In 2020 sales of plant-based meats increased by 40% in the UK, this dropped to 14% last year, but investors had hoped to see a rebound in sales this year. However, the latest data from Kantar shows just a 2.5% rise in sales over the 36 weeks to early September.

It’s a similar story in the US, with sales dropping by 0.4% in the 32 weeks to early August, according to data provider Spins. It’s in stark contrast to the 46% rise seen in 2020, but on a par with the 0.5% decrease seen last year.

The fact plant-based alternatives often command higher prices is becoming a sticking block, Jeff Crumpton, senior manager at Spins, told the Financial Times. “They’re having to make a difficult decision with what their budget is, as the cost of living crunch impacts people’s decisions,” he said.

Four-day working week trial backed by nine in 10 firms

The vast majority of companies taking part in a widespread trial of a four-day working week across the UK have said it is working well and they are planning to stick to it once the trial ends.

At the half-way point in the six-month trial, nearly nine in 10 (88%) of respondents say it is working for their business, while 86% say they are likely to continue with the policy once the trial is over.

More than 3,300 employees across 70 companies are taking part in the trial, which is being monitored by academics from Oxford and Cambridge universities and Boston College in the US, supported by the 4 Day Week campaign.

Trading firm City Index looks to broaden appeal with latest campaign

City Index, the spread betting and trading brand, has launched a multichannel campaign as it looks to raise awareness and consideration among experienced and novice traders.

As part of the push, City Index has unveiled a new brand identity and positioning, pitching itself as a brand that is committed to helping clients through smarter insight, more choice and better value.

It comes as the brand’s research showed its target audience is bored by the stereotypical ‘men in suits’ image that tend to feature in trading campaigns.

The 30-second hero film, by Boulder Group, shows a man walking through a constantly changing environment, with everything along the way reacting to turbulence in the market. He then sees a woman with a pink glow surrounding her who is seemingly on top of the shifting landscape thanks to her use of the City Index app. He follows suit and is then seen at the end using the app and more content with the changes happening around him. The ad ends with the line ‘Invested in your success’.

The campaign will run across digital TV, out-of-home, print and social channels in the UK, Singapore and Australia, with media planning and buying done by VCCP Media.

Warren Ruhomon, head of marketing at City Index, says the campaign comes at a “pivotal time” following the “significant refresh of our brand”. “It was important that we not only made an impact with the creative but that it also reflected the personality of the new, modernised City Index.”