Airbnb makes remote working permanent
Airbnb has told staff remote working is now a permanent fixture as it states it’s “clear that flexibility works”.
In a email sent to employees, CEO Brian Chesky says Airbnb has proved remote working is viable, stating the business would not have “recovered so quickly” had it not been for people working from Airbnbs.
He believes remote and flexible work will become the “predominant” model in a decade from now, saying “this is the way the world is going”.
Chesky also believes it will enable Airbnb to attract and retain the best talent.
“We want to hire and retain the best people in the world (like you). If we limited our talent pool to a commuting radius around our offices, we would be at a significant disadvantage. The best people live everywhere, not concentrated in one area. And by recruiting from a diverse set of communities, we will become a more diverse company.”
He also underlines the importance of trust in making remote working effective.
“You’ve shown how much you can accomplish remotely. In the last two years, we navigated the pandemic, rebuilt the company from the ground up, went public, upgraded our entire service and reported record earnings, all while working remotely. It’s clear that flexibility works for Airbnb,” he says.
However, he acknowledges “human connection” is still needed and says some in-person collaboration will be required but he is leaving it up to employees to “make the right choice based on where you’re most productive”.
Airbnb employees have been told they can also work from anywhere in the country they operate and their pay won’t change and they have the flexibility to travel and work around the world, while reassuring people the business will “continue to work in a highly coordinated way”.
A “small number” of roles will also be required to be in the office or a specific location, however.
“I’ve always believed that you design the culture you want, or it will be designed for you. I’m excited about this new design and giving you the flexibility to live and work anywhere. I think it will unlock some amazing creativity and innovation—and make working here really fun,” Chesky adds.
HSBC to be rapped by ad watchdog for greenwashing
HSBC is about to be rapped by the UK ad watchdog, which is set to find the bank guilty of greenwashing.
In a draft recommendation seen by the Financial Times, the Advertising Standards Authority is preparing to rule the financial brand has misled customers on its contribution to climate change.
The two ads in question have been deemed to selectively promote HSBC’s green initiatives, without giving the full picture on its continued financing of companies that have a negative impact on the environment, receiving a total of 45 complaints.
The out of home ads appeared at bus stops in London and Bristol last October, with one saying HSBC will provide $1tn in financing for clients to transition to net zero and the other pledging to plant 2 million trees to trap 1.25 million tonnes of carbon.
But the ASA is expected to rule that the ads are likely to mislead consumers of the overall impact HSBC is having on the environment, citing evidence from its annual report which disclosed the bank’s current financed emissions equated to 35.8 million tonnes of carbon dioxide per year for oil and gas projects alone.
“We considered that consumers would not expect that HSBC… would also be simultaneously involved in the financing of businesses which made significant contributions to carbon dioxide and other greenhouse gas emissions, and therefore directly conflicted with the aims of a transition to net zero,” its preliminary conclusion states.
Amazon posts first loss since 2015
Amazon has recorded its first loss since 2015 as sales falter following heightened demand during the pandemic and costs rise.
The online giant saw operating income decrease to $3.7bn in the first quarter compared to $8.9bn in the same quarter last year. This resulted in a net loss of $3.7bn for the period versus a net income of $7.6bn in 2021.
This is despite net sales increasing by 7% to $116.4bn in the quarter compared to $108.5bn last year.
Amazon web services has grown 34% over the past two year years and its consumer business has increased by 23% compared to 2020.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” says Andy Jassy, Amazon CEO.
“With extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfilment network that we’d built over Amazon’s first 25 years – and doing so in just 24 months. Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfilment network. We know how to do this and have done it before.
“This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”
Strongbow looks to shake up cider marketing with purple goat-fronted campaign
Heineken UK is launching a £12m campaign for its new 95-calorie cider, Strongbow Ultra Dark Fruit.
With a purple goat at the centre of the campaign, ‘Drink the GOAT’, which is a play on the phrase ‘greatest of all time’, looks to change the norm for cider advertising as it aims to attract a new generation of consumers to the brand. Gone are the orchards and West Country scenes, instead the brightly coloured goat is seen nodding along to garage music.
The nationwide campaign, by creative agency Otherway, features TV, out of home (OOH), social media, cinema and video-on-demand as well as a 500,000 mini-can sampling drive. As part of the OOH activation, Strongbow will launch an Oxford Circus tube station takeover featuring the purple goat character.
Heineken aims to reach 99% of all 18- to 34-year-olds via the activity, which it expects to generate 437 million impressions, making it Strongbow’s biggest campaign to date.
Rachel Holms, Heineken UK’s cider brand director, says: “We are all obsessed with being the first to trial a new product, brand or experience and report back to our friends – this is what creates social currency.”
She describes Drink the GOAT as Strongbow’s “most intriguing” media approach that is aimed to drive “fame and talkability”.
“Our latest campaign will be unmissable. At Strongbow, we strive to create innovative products that take risks, making us stand out in the market. Our latest campaign captures this ideology perfectly as the disruptive creative demands the attention of consumers leaving Strongbow Ultra top of mind,” she adds.
Whitbread says ‘strength’ of Premier Inn brand has helped it return to profit
Premier Inn owner Whitbread says the strength of its brands and scale, alongside commercial and operational initiatives, have helped drive “strong recovery” following a difficult two years caused by the pandemic.
UK accommodation sales were up 198% in the 53 weeks to 3 March 2022 compared to its 2021 financial year, with food and drink sales 170% higher.
However, total accommodation sales in the UK were 11.7% down on pre-Covid levels.
Premier Inn’s total UK accommodation sales were 14.8 percentage points ahead of the midscale and economy market during the 2022 financial year, and 17.3 percentage points higher in the second half alone.
Sales have also been strong in the first seven weeks of its new financial year, with Premier Inn’s total accommodation sales up 326.6% compared to the same period last year and 29.9% up on pre-Covid times. The group says this puts it “well ahead” of the market.
Whitbread bounced back from a loss of just over £1bn last year to record a statutory profit before tax of £58.2m, with revenue 189% ahead of 2021 reflecting the easing of Covid restrictions and growth in its estate in both the UK and Germany.
Alison Brittain, Whitbread’s CEO, says the “strong” performance has been driven by its ‘investing to win’ commercial initiatives and the appeal of its customer offer.
“As restrictions eased after the first quarter, high levels of leisure demand and improving business demand helped drive UK accommodation sales ahead of pre-Covid levels throughout the summer and into autumn, with sales remaining resilient through Q4 despite the emergence of the Omicron Covid variant,” she says.
“As we move into the next phase of our Covid recovery, this excellent performance, combined with confidence in the group’s outlook, means that the Board is now proposing the reinstatement of dividend payments.”
Thursday, 28 April
Sainsbury’s ramps up value push with promise to undercut rivals
Sainsbury’s says it will continue to push rivals on price as the supermarket claims to be “outperforming” key competitors on value, innovation and service.
Addressing rising inflation, chief executive Simon Roberts says the retailer will continue to “inflate behind competitors on the products customers buy most often”, citing a “bold phase of investment” announced last week to lower prices across 150 high volume fresh products.
Group revenue over the 52 weeks to 5 March, including fuel, rose to £29.9bn, up 2.9% year on year and 3.1% compared to two years prior. The business made a statutory pre-tax profit of £854m, up 207% on the same period two years ago, reflective of lower restructuring costs.
Retail sales excluding fuel hit £28.1bn over the year period, down 2.6% year on year, but up 4.6% on a two-year basis.
Digital sales hit £10.8bn, down 11% on 2021/2020 when lockdown fuelled the adoption of ecommerce, but up 80% on 2019/2020. Some 39% of sales are now made via digital channels, while online groceries accounted for 17% of overall grocery sales during the year.
Total grocery sales rose by 7.6% on a two-year basis but remained broadly flat compared to the same period last year. However, general merchandise sales fell 4.6% on a two-year basis and 11% versus last year, which the retailer puts down to availability challenges in key product areas and a focus on “profitable sales”.
Sainsbury’s claims “significant investment” in grocery prices, funded by its cost saving programme, has driven strong grocery volume market share performance. This year also saw the launch of My Nectar Prices, offering 9.3 million Nectar customers personalised discounted prices.
The retailer says it is has been able to improve prices by “investing ahead of competitors” with a clear focus on fresh food. The grocer states its price position has remained strong throughout the year, improving 310 basis points against Aldi, year on year.
The supermarket group points to having more than tripled product innovation in the year and grown Taste the Difference sales by 15% on a two-year basis. Sainsbury’s also claims its in store customer satisfaction scores performed ahead of competitors.
In terms of the wider group, Argos is now a profitable business, with 80% of sales originating online. Tu Clothing has become a £1bn brand, with sales growth of 3.1% on a two-year basis, underpinned by online sales growth of 49%.
“We said we would invest in value, innovation and service and that’s exactly what we’re doing,” says Roberts. “We have outperformed key competitors on both a one and two-year basis, while also delivering strong underlying profit growth, improved returns and consistent retail free cash flow. This gives us a strong foundation to keep building momentum in the year ahead.”
Meta struggles to monetise short-form video as revenue growth slows
Meta admits it is still grappling with how to monetise short-form video, as the social media group announced its slowest revenue growth for a decade.
The company generated revenue of $27.9bn (£22.2bn) during the three months to 31 March, up 7% year on year, $26.9bn (£21.4bn) of which came from advertising.
During the first quarter, ad impressions delivered across Meta’s portfolio of apps increased by 15% year on year, while the average price per ad decreased 8% compared to last year. Meta now expects to post revenue of $28bn (£22.3bn) to $30bn (£24bn) in the second quarter, below analyst estimates.
In addition, the company spent $3.3bn (£2.6bn) on sales and marketing during the first quarter, up from $2.8bn (£2.2bn) in the same period last year.
Daily active users on Facebook rose by 4% year on year to 1.96 billion on average, a relief for Meta which last year reported its first ever decline in Facebook users. Across the wider app family, daily active users increased by 6% to 2.87 billion.
Speaking to analysts, CEO Mark Zuckerberg outlined several challenges affecting the business, from the impact of Apple’s iOS privacy updates to the transition to short-form video, which he admitted “doesn’t monetise as well for now”. Zuckerberg pointed to the war in Ukraine, which has caused Meta services to be blocked in Russia and the business to stop accepting ads from Russian advertisers globally.
He also noted the trend for lockdown fuelled acceleration of ecommerce, which led to “outsized revenue growth”, is now slowing.
On the transition to short-form video, fuelled by the popularity of TikTok, Reels now make up more than 20% of the time users spend on Instagram, while video overall makes up 50% of time spent on Facebook.
“In the near term this is a drag on revenue because Reels monetisation is less than feed or stories, but I expect that will improve over time. We’ve seen this type of media format transition multiple times before,” said Zuckerberg.
He noted the shift in 2012 from a desktop to mobile feed, which did not monetise well at first, as well as the move in 2018 to users engaging more with Stories than with the News Feed.
“Stories didn’t monetise as well as Feed yet, we still doubled down on stories, had tough period but came out stronger than ever. So, we’ve run this play before and we’re running it again now,” said Zuckerberg.
“We’re focusing on growing Reels as a major part of the discovery engine vision and we expect that this expansion in engagement to shift from a short-term headwind to a tailwind at some point.”
BT to make EE its flagship consumer facing brand
BT is to make EE its flagship consumer facing brand in a bid to become a more “focused and efficient” player in the crowded telecoms sector.
“We are evolving from today’s approach in the consumer market where BT and EE both take centre stage, to one where a flagship brand will lead our approach to future innovation, convergence and services beyond connectivity,” explains BT Consumer CEO Marc Allera.
“Having both BT and EE in an already crowded consumer market means we must have two of everything and that makes life harder for our customers and our people – two accounts, two apps, two product roadmaps and multiple systems. You get the picture. We need to simplify things, for everyone.”
While retaining much of its existing identity, the plan is to “stretch” EE into new areas with a focus on the “convergence of networks, devices and new services beyond connectivity.” Allera says the company has chosen to prioritise EE, because it is “synonymous with the best mobile connectivity” and the brand’s popularity in the broadband market is growing steadily.
The company claims EE has “captured the hearts of customers across all demographics” and therefore has a strong brand that can stretch into new areas.
The BT brand will play a “more focused role” for customers with standalone broadband and landline services. BT Sport will continue in its current guise as it prepares to enter its joint venture with Warner Bros. Discovery. In addition, “value brand” Plusnet will continue to serve customers with basic no-frills broadband and landline.
From a B2B and global perspective, BT will remain the flagship brand. Allera claims BT is the clear market leader in the B2B segment on brand consideration, reliability and trust across a wide range of fixed and digital connectivity services.
“This exciting transformation won’t happen overnight. I’ll be sharing more with you over the coming months, but the journey starts today to create a new EE, one that will start to play a more meaningful role in our customers’ lives and create the most personal, customer-focused technology brand in the UK,” he adds.
UK ad market hits record £31.9bn in 2021
The UK ad market reached a record £31.9bn in 2021, up 34.3% year on year, according to the latest Advertising Association/WARC full year figures.
Indeed, the UK ad market emerged £8bn larger than April 2020’s original forecast of £24bn, set at the start of the Covid pandemic. This growth is in part due to inflationary pressures on the cost of advertising, as well as higher than expected growth in key forms of online advertising over the past year.
Three in every four pounds spent on UK advertising today is invested in one of a wide range of online formats. In fact, only China has an equivalent online share of this proportion. The AA/WARC figures show online ad spend totalled £23.5bn in 2021, equivalent to 73.5% of all UK ad spend and up 11.7 percentage points from pre-pandemic levels in 2019.
The AA/WARC data shows search, inclusive of ecommerce, proved to be the strongest performer in 2021 at £11.7bn, beating April 2020’s projection by over £3.7bn. In addition, TV surpassed early expectations by almost £1bn, while online video overperformed by approximately £2bn and social media by £2.3bn in relation to the forecasts made at the start of the pandemic.
The UK ad market is forecast to grow by 10.7% in 2022 to £35.3bn, an upgrade on previous forecasts. This figure is driven by a strong start to the year, higher CPMs (cost per thousand impressions) and higher demand ahead of the FIFA World Cup this winter.
In 2023, the ad market is set to add an additional 5.4% year on year to reach £37.2bn, although economic headwinds – particularly in relation to cost of living pressures and supply chain disruption – mean this figure is liable to change.
Advertising Association chief executive, Stephen Woodford, points out the UK has held its position in 2021 as the largest advertising market in Europe through the pandemic and is now the third largest in the world, behind the US and China.
However, while further growth is forecast, inflationary pressures on the cost of advertising and ongoing geo-political uncertainties, mean the industry should remain cautious, Woodford adds.
Kraft Heinz claims to be ‘more creative in marketing’ despite sales dip
Kraft Heinz CEO Miguel Patricio says the business is becoming “more creative in marketing”, despite seeing net sales dip by 5.5% to $6bn (£4.8bn) during the first quarter.
The FMCG giant made a gross profit of $1.9bn (£1.5bn) during the three months to 26 March, down 12.3% on the same period last year.
Patricio described the first quarter results as representing a “strong start to the year”, during which time the team acted with “greater corporate agility”. Admitting the business still has work to do, the Kraft Heinz CEO remains confident in the company’s ability to deliver its plan for 2022 and long-term growth strategy.
Speaking to analysts, Patricio noted the strongest growth was being driven by “priority platforms, brands, channels and markets”, with Kraft Heinz seeking to manage inflation and supply constraints.
“We continue to make progress, building and deploying initiatives to accelerate our advantages in areas like becoming more agile, becoming much more creative in marketing, developing joint business plans between retail and foodservice, and capacity unlocks in our Grow and Energize platforms,” he stated.
Patricio confirmed the business has no intention of reducing its marketing investment. Driven by a desire to invest in its brands, Kraft Heinz will keep marketing spend flat or seek to increase the investment, depending on how the year pans out.
Currently around 70% of the company’s marketing investment is in digital, with Patricio explaining he is “impressed” by the quality of this spend and the way Kraft Heinz has changed the way it communicates.
Kraft Heinz executive vice-president and North America president Carlos Abrams-Rivera noted that while the business has invested around $100m (£79.6m) more in marketing compared to 2019, the focus is on earned media with an improved return on investment.
Pret’s Dan Burdett joins Ovo as chief customer officer
Green energy company Ovo has poached Pret A Manger’s Dan Burdett for the newly created role of chief customer officer.
Burdett, who since November 2020 has served as chief customer and growth officer at the coffee chain, has been hired to ensure Ovo’s customers are supported “during a difficult time of high energy prices”.
Now the UK’s third largest energy supplier, Ovo says it has “ambitious goals” to decarbonise homes nationwide and help lower the carbon footprint of its customers. The idea is to adapt the business model to ensure customers receive the help they need, whilst delivering on the company’s Plan Zero pledge to reduce its carbon emissions to net zero by 2030.
Burdett joins a team previously headed up by Sarah Booth, who stepped down as Ovo director of brand and marketing in September 2021 to become a freelance brand and marketing consultant.
Ovo CEO Raman Bhatia explains the urgent need to decarbonise, coupled with the rising cost of energy, means it has never been more important to provide a “leading customer experience”.
“Dan is a world class expert in his field, bringing with him an enormous amount of experience from some of the most customer-centric companies in the world,” Bhatia adds. “He will have a critical role in shaping Ovo’s future and I’m looking forward to working alongside him”.
Burdett is credited with having led on the transformation of Pret’s business model during the pandemic, shifting to provide food and coffee through digital and retail channels. He was, for example, part of the team who launched the chain’s coffee subscription service and initiatives such as click-and-collect and home delivery, as well as new app and digital loyalty schemes.
“With costs of energy increasing and economic uncertainty backing up against a need to accelerate decarbonisation, the need to bring cheaper, greener, energy to customers will never be a bigger problem for the world to solve, than it is today,” says Burdett.
“I couldn’t think of a more exciting opportunity right now than to join one of the most progressive, mission led, green energy businesses in the UK, and to play my part in helping to solve how we deliver outstanding customer experiences alongside our goals of being a sustainable business.”
Prior to joining Pret in November 2020, Burdett served as CMO at Amsterdam-based online ticket agent Tiqets for two years. From 2016 to 2018, he held the position of European CMO at Ebay, which was preceded by three years as global chief brand officer at Snickers.
Burdett spent seven years at Unilever, working across the US, Japan and the UK on the Axe brand, ascending from senior brand manager to global brand director by 2009. He kicked off his marketing career at L’Oréal in 1997, becoming international head of marketing for the men’s division and moving to Paris to launch the L’Oréal Men Expert brand.
Wednesday, 27 April
GSK reports ‘strong’ sales growth ahead of demerger
Pharmaceuticals and healthcare giant GSK has reported “strong” sales growth over the first quarter of 2022, as it remains “on track” to demerge and delist its Consumer Healthcare division, recently renamed Haleon, in July 2022.
Total turnover in the quarter reached £9.8bn, up 32% at an annual equivalent rate (AER). The biopharma side of the business made a turnover of £7.1bn, up 40%, while Consumer Healthcare grew 14% to £2.6bn (excluding the impact of divested brands).
Total operating profit was £2.8bn, compared with £1.7bn in the first quarter of 2021.
In Consumer Healthcare, the business reported “strong growth” across all categories. Oral health sales grew 6% AER to £740m with the Sensodyne brand delivering high single digit growth, “reflecting underlying brand strength, continued innovation and strong growth across key markets”.
Pain relief sales increased 17% to £639m, with Panadol up in the mid-thirties percent due to a successful campaign aimed at post-vaccination use and increased demand during the Omicron wave.
Vitamins, minerals and supplements sales increased 17% to £407m, encompassing brands such as Centrum and Emergen-C, while respiratory health sales increased 51% to £370m. Digestive health and other brands were flat AER at £477m.
Overall, the Consumer Healthcare division’s operating profit was £650m, up 21% AER, while operating margin was up 1.5 percentage points to 24.7%. According to the company, this reflects “strong leverage” from volume growth, price increases, and supply chain efficiencies, offset by increased brand investment and new costs associated with starting to run Consumer Healthcare as a standalone company.
In February this year it was confirmed that GSK Consumer Healthcare plans to rebrand to Haleon following its demerger from GlaxoSmithKline.
In today’s financial report, GSK CEO Emma Walmsley described 2022 as a “landmark year” for the business, as it separates into two companies.
“We have delivered strong first quarter results,” she said. “We also continue to see very good momentum in Consumer Healthcare, demonstrating strong potential of this business ahead of its proposed demerger in July to become Haleon.”
Walmsley added the business plans to increased targeted investment in research and development (R&D) in 2022, to “build on and invest behind” its top-line momentum for key growth drivers, and to deliver the demerger. Adjusted R&D spend in Consumer Healthcare over the period was £66m.
In January it was revealed GSK had rejected a £50bn bid from Unilever, despite the FMCG giant claiming a potential acquisition would be a “strong strategic fit”, combining its “consumer and branding expertise” with GSK’s technical capabilities.
Ukraine war to drive up food and energy prices for three years
The war in Ukraine will result in the “largest commodity shock” in 50 years, the World Bank has warned, meaning expensive food, cotton and energy for the next three years.
Energy prices may increase more than 50%, with the price of natural gas in Europe expected to more than double. Coal prices are expected to be 80% higher, and oil prices are to remain elevated over the next three years. Russia currently produces the world’s third biggest share of oil at 11%, providing 27% of the EU’s oil as well as 40% of its gas.
While energy prices are predicted to fall next year and in 2024, they will remain 15% higher than last year.
Meanwhile, food costs are set to rise. Wheat is forecast to increase 42.7% to record highs, while barley’s cost will rise 33.3%, soybeans 20%, cooking oils 29.8% and chicken 41.8%.
World Bank vice-president Indermit Gill said there was a risk these developments could lead to “stagflation”, a situation in which the inflation rate is high, economic growth rate slows, and unemployment remains high. It raises a significant dilemma as action to lower inflation could exacerbate unemployment.
“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s. As was the case then, the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilisers,” Gill says.
Heineken and ITV partnership sees alcohol-free beer on tap in soap opera pubs
A product placement deal between Heineken and ITV will see the beer brewer’s alcohol-free brand on tap at Coronation Street’s Rovers Return and Emmerdale’s Woolpack.
Heineken 0.0 Draught taps will be added front and centre from Friday 29 April, alongside the pubs’ fictional beer brands, and viewed by a combined audience of 11 million.
The media first continues Heineken’s work to normalise alcohol-free beer, following the launch of the product on draught in a number of British pubs last year. A national roll-out of the beer into hundreds of pubs is planned throughout 2022, aligning with the brewer’s promise to have as many Heineken 0.0 taps as there are Heineken Original taps in British pubs and bars by 2025.
UK beer portfolio director Matt Saltzstein believes the partnership with ITV will “break down stigmas” and “encourage more people to enjoy a pint of Heineken 0.0 down their local”.
He says: “We want to push boundaries with the Heineken 0.0 brand and from our position as category leaders.”
Heineken 0.0 is the market leader for no and low alcohol in the UK, with 24.6% total market share. Over the last year, the category has grown 26%, with 9.3 million points of alcohol free beer consumed.
The deal is the latest brand partnership in a series struck by ITV for its soaps. In May 2021 the broadcaster partnered with online estate agent Purplebricks, with its signage appearing on the Rovers Return as it was put up for sale.
Virgin Media O2 unveils entertainment service focused on value and convenience
Virgin Media O2 has launched an entertainment service offering customers a new way to bring together their favourite TV channels, video apps and streaming subscriptions in one place at “great value”.
‘Stream from Virgin Media’ operates through a small ‘plug and play’ box powered by the company’s broadband service. According to the firm, this enables customers to turn older TVs into a “smarter”, voice activated TV, and provides a “convenient and personalised” experience.
Customers can get 10% credit back every month on the subscriptions they add to Stream, while “fuss-free” 30 day contracts mean customers can pick and mix between them each month. All subscriptions are paid through one bill.
Disney+ is now available on Virgin TV for the first time through the service, as well as Netflix, Prime Video, BBC iPlayer, ITV Hub, Starzplay, BritBox and YouTube, and live TV subscriptions including Sky Sports and BT Sport.
Stream is available from today (27 April) to both new and existing customers who take a Virgin Media broadband package for a one-off activation fee of £35.
Virgin Media O2’s chief TV and entertainment officer, David Bouchier, says the company is “putting viewers first” at a time of “endless” entertainment choice and the cost of living crisis.
“Stream customers will only pay for the entertainment they choose and can pocket monthly savings on the content they add – it is a truly flexible and personal way to enjoy the entertainment that matters most, at great value,” he says.
“Stream is more than just a new TV service, it’s whole new way to enjoy connected entertainment. More than ever, content and connectivity go hand in hand and with Stream we’re delivering the best of both.”
Kellogg’s takes government to court over new HFSS rules
Kellogg’s is entering a court battle with the government over upcoming regulations on high fat, salt or sugar (HFSS) foods, which will prevent some of its 13 cereal brands being promoted in-store or through advertising due to their high sugar content.
The food giant argues the rules fail to consider the nutritional value of the milk or yoghurt added to the cereals, which it claims are added 92% of the time according to independent market data.
In a statement reported by the BBC, Kellogg’s said it had “tried to have a reasonable conversation with government” without success. UK managing director Chris Silcock said the company believes the government’s formula to measure the nutritional value of breakfast cereals is “wrong”.
“It measures cereals dry when they are almost always eaten with milk. All of this matters because, unless you take account of the nutritional elements added when cereal is eaten with milk, the full nutritional value of the meal is not measured,” he said.
Kellogg’s brands such as Crunchy Nut Corn Flakes and Fruit and Fibre fall under the HFSS banner in dry form, but added milk reduces the proportion of sugar and salt content relative to the weight of the overall serving,
However, the BBC reports the government plans to fight the legal case.
The new food regulations, which come into force from October, will restrict retailer promotions on HFSS food and drink. These products will also be banned from key locations such as checkouts, store entrances, aisle ends and their online equivalents.
A total ban on advertising for HFSS products online will also be introduced, as well as on TV before 9pm. The regulations are set to have a major impact on the more than £600m spent annuals by brands on advertising food.
Tuesday, 26 April
Elon Musk enters deal to buy Twitter
Tesla chief executive Elon Musk has reached a deal with Twitter’s board to buy the social media company for $44bn (£34.5bn). Musk has criticised the platform in the past for its record on “free speech”.
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Musk said, in a tweeted statement.
A move to implement more “free speech” on the platform may see less content moderation and banned users on the site. Last year, Twitter banned former US president Donald Trump for “inciting violence” following the insurrection at the US Capitol. That was a decision criticised by some, including Musk, who said: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”
The takeover would seem to leave the door open to the former president to rejoin the platform. However, Trump told Fox News yesterday (25 April) that he would not be rejoining the platform, preferring to communicate via his own social platform Truth Social.
Musk indicates that he will introduce other new features to Twitter, including authenticating users and “defeating the spam bots”. He also says that he will make the platform’s algorithms open source “to increase trust”. The billionaire will take the social media platform, a move that will mean he exercises more control over it.
Musk has also hinted previously that he planned to move Twitter away from relying largely on digital advertising. According to the Financial Times, Twitter has “raced to reassure advertising agencies in the wake of the deal announcement, telling them to expect business as usual”.
Musk had announced his intention to buy Twitter less than two weeks ago on the 14 April. The social media company’s board had been at first opposed to the bid, threatening to dilute the shares of anyone who bought more than a 15% stake in the business; however, when financial details of the takeover were revealed by Musk, they became more willing to consider.
Asda to invest £73m in tackling cost of living crisis for customers
Asda has said it will spend £73m to help ease cost of living concerns for customers and staff, with price cuts and freezes on around 100 products until the end of the year.
This includes fresh fruit and vegetables, fresh meat, store cupboard essentials like rice and noodles, as well as soft drinks, desserts and frozen products.
Prices will be reduced by an average of 12%, with the cost of a 500g bag of Asda easy cook rice dropping by 25% from £1 to 75p, and a tin of John West tuna being reduced by 14% from £3.50 to £3.
The supermarket has also said it will be increasing the hourly wage for shop floor staff to £10.10 from July, meaning they will be paid 60p on top of the National Living Wage. Asda staff will also be entitled to a 10% colleague discount in-stores and online, and an additional supplement for employees in London.
Mohsin Issa, co-owner of Asda says: “We know that household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times.”
Meanwhile, Asda will be launching its Just Essentials value range next month, a new budget range which will comprise more than 300 products and replace its existing Smart Price brand.
Rising food prices are one significant pressure felt by consumers during the cost of living crisis, with many turning to discounters Aldi and Lidl. Research from Kantar shows that both Aldi and Lidl gained market share in the 12 weeks to 17 April 2022 compared to the same period last year.
Aldi increased its share by 0.6% to 6.6%, while Lidl saw its share increase to 8.8% from 8.0% last year. Tesco was the only other supermarket to see its market share increase, though by a smaller share of 0.3%.
Disney launches home range
Disney has launched a dedicated home and interiors range. Disney Home is inspired by the characters and storylines of Disney.
The range has a wide variety of furniture, from kids bedding through to aspirational furniture, bespoke design pieces and one-off collaborations. It is designed to appeal to consumers at different price points, as well as different interior-decorating styles.
Disney Home is now in-stock with the company’s licensees and select retailers. In the UK, this includes Selfridges, Next and Wayfair. Fans can also interact with @DisneyHome on Instagram and Pinterest.
The Disney Home collection contains functional core pieces of furniture as well as decorative items. All these designs have been influenced by its stories, from classic characters like Mickey and Minnie to Disney’s more recent acquisitions like Pixar, Star Wars and Marvel.
“We know that Disney storytelling has ignited imaginations for nearly a century, and this new brand brings together home décor inspired by some of our beloved characters from across our brands – from Minnie Mouse’s polka dots to the bold lines of The Millennium Falcon,” says Liz Shortreed category vice president at Disney.
“Disney Home products have been thoughtfully designed to put the fun into functionality!” she added.
Burger King to open 200 more restaurants in the UK by 2026
Burger King says it plans to open 200 more restaurants in the UK over the next five years. This would represent a significant increase in footprint for the fast-food chain, which currently has around 500 branches in the UK.
The fast-food chain made the commitment as it announced a 68% increase in revenues to £211.7m, with like-for-like sales up by 46% during 2021.
Burger King attributed the results to investment in digital sales and the expansion of its restaurants.
“Both delivery and Drive Thru sales were strong throughout 2021 and will remain key areas of focus as we execute on our growth strategy,” said Alasdair Murdoch, CEO of Burger King.
The business said it had benefited from the addition of 48 new owned restaurants last year, including 29 that it acquired from franchisees. This includes the brand’s flagship store in Leicester Square.
Burger King also says that it continues to expand its meat-free offering across the year. The company says it made a 7% reduction in emissions and moving all sites to 100% renewable energy tariffs during 2021.
Digital ad spend hits record high in 2021
Digital ad spend saw the biggest growth for 15 years in 2021, rising by 43% year-on-year to £23.5bn. That figure also represents a 50% rise from 2019, the last year unaffected by the pandemic.
These figures come from the Interactive Advertising Bureau UK’s (IAB) Digital Adspend Report, which is conducted with PwC.
Search ads took the largest share of overall spend, up 38% to £11.7bn. The IAB captured advertisers’ growing interest in retail media, by recording the amount spent on shopping search ads for the first time. This spend totalled £3.5bn in 2021.
Display ads grew by 53% to £9.7bn, with both social and non-social display up by more than 50%. Video drove the majority of growth in this category, rising by 58% to £5.5bn.
More novel media formats such as podcasting and gaming saw big percentage rises in 2021, although they grew from a smaller base. Marketers spent £54m on podcast ads in 2021, up 61% year-on-year. Meanwhile, investment in in-game advertising totalled £9.8m last year.
In 2020, the report showed only modest ad spend growth of 5%, with marketers exercising caution amid the pandemic. Jon Mew calls the 2021 figures “incredible” but warns that last year was also an exceptional year.
“We shouldn’t lose sight of the fact that 2021 still wasn’t a normal year,” he says, “We spent half of it in some form of lockdown – bringing with it an increased reliance on digital channels – while the return of large-scale events such as the Olympics and Paralympics in H2 will also have impacted spend.”
Monday, 25 April
M&S brings back fresh market campaign for 2022
Retailer Marks & Spencer has relaunched its ‘Fresh Market Update’ customer campaign, aiming to highlight the role its British Select farmers play in the company’s quality, value and freshness.
The new campaign will see 62 different ads run between April and September across TV, as well as direct mail, emails, social media and on its local Facebook pages.
M&S’s Facebook pages, which receive more than 3 million views a week, were originally set up during the first Covid-19 lockdown, and have now become an important two-way communication channel for the retailer.
The campaign aims to take customers on a journey across the UK, showcasing farmers’ efforts ensure quality and value for M&S Food. The retailer works with 8,000 partners in the UK.
Created with ITV Creative, the ads are fronted by ITV Weather presenter Lucy Verasamy with documentary-style episodes taking viewers behind the scenes on a different product each week.
One of the products being highlighted is the brand’s RSPCA Assured milk, with the retailer saying it has the largest range of RSPCA Assured products available compared to other retailers.
“Our Fresh Market Update campaign is a celebration of the best of British farming. Through our longstanding supplier relationships with our Select Farmers, we’re able to offer trusted value, which matters to customers more than ever,” says M&S Food marketing director, Sharry Cramond.
M&S says the first iteration of the campaign, launched last year, reached 35 million people across 18 weeks, and follows an investment of more than £100m in its value proposition across the last three years.
Research shows growing mental health crisis in advertising and media
Mental health related calls to NABS, the wellbeing charity for the advertising and media industry, have jumped by 15% year on year to make up 25% of all calls.
The NABS Advice Line has received nearly twice as many calls year on year, with 466 this year compared to 252 previously.
Emotional support is the top reason for calling NABS, as it says this accounts for almost half of its total calls. Mental health accounts for 59% of the emotional support calls, and the service says the “significant concerns” raised relate to adapting to living with Covid-19, and the long-term impact the of the last two years.
The charity says the second and third reasons for contacting it are financial support (29%) and redundancy, which makes up 67% of all digital enquiries across NABS’ redundancy tool and SupportBot.
Bereavement related calls have risen to 14% from 2% last year, which it puts down to people now beginning to process losses from the pandemic, and NABS therapy referrals have gone up by 50% as individuals seek out urgent and structured support.
“Our stats clearly reveal that the pandemic has left its mark on the mental health of people across our industry,” says CEO Diana Tickell.
She adds: “Our industry cannot ignore this upward trend. NABS is here to support everybody who is facing challenges with their wellbeing; if you’re struggling, please call us for help, whatever your issue.”
Morrisons cuts prices among cost of living crisis
Morrisons is cutting the prices of more than 500 products, including eggs, beef and rice, by an average of 13% as the cost of living crisis worsens, reports the BBC.
Morrisons is the UK’s fourth largest supermarket after Tesco, Sainsbury’s and Asda. The new price cuts will impact around 6% of its total sales volume.
For example, products such as a 30-pack of own brand eggs will go from £3.40 to £2.99, with a 430g pack of diced beef being sold for £3.59, down from £3.99. Plus, more than 180 additional products have been included in new promotions such as ‘buy two for £1.80’ on cereals and ‘buy two for £3’ on breaded chicken.
Research from Kantar highlights how the likes of Morrisons and Asda are losing customers to discounters Aldi and Lidl, as they try to cut their costs. With UK grocery price inflation rising to 5.2% in the 12 weeks to 20 March, Aldi and Lidl were the only large supermarkets to see their sales and market shares rise.
Morrisons, along with Asda, saw the biggest drops in sales and market share.
The move for Morrisons comes following Asda’s promise last month to offer a range of low-cost products after criticism from Jack Monroe, food poverty campaigner and chef, detailed how the supermarket was removing its cheaper products in a time of difficulty for customers.
P&O Ferries forced to reverse pay cut attempts
P&O Ferries has been forced to reverse its attempt at paying its new seafarers less money.
The reversal comes as the RMT Union received reports of agency workers at Dover being asked to sign new contracts to replace older ones, with reduced payment. Subsequently, the union reported P&O to the Maritime and Coastguard Agency, which made sure new workers retained their original pay, reports the BBC.
In an email seen by the BBC, one worker wrote: “They don’t care about our rights. They try to give us less money. We are desperate.”
The seafarer who raised the alarm to the RMT said they were being forced to work without contracts as old ones expired, and said P&O had also lost documents.
Transport secretary Grant Shapps has said it’s “good” that P&O reversed the further attempt at a pay cut, adding that it “must go further” and pay the minimum wage.
“We will legislate to force them, but they could win back some much needed credibility by acting now,” he said.
The news comes following the Spirit of Britain being cleared to resume sailing on Friday. It had been held at the port since 12 April due to a number of unspecified deficiencies, the Maritime and Coastguard Agency said.
Small companies fear impact of rising costs on growth
Almost half of the UK’s small companies have suggested the rising costs of doing business will stall growth this year, according to new research by the Federation of Small Businesses (FSB).
It found that operating costs had risen for almost nine in 10 businesses, compared against this time last year.
More than half of respondents blamed rising fuel and utility costs, while more than a quarter said higher taxes had been impacting them, following the increase in national insurance rates, and the issue of new business rates bills this month, reports the Financial Times.
The majority of small business owners also said they were operating below capacity, something that has been hit due to global supply chain disruptions, labour shortages and rising wages.
The survey did find, however, that confidence overall remained positive at 15.3 for Q1 this year.
The FSB surveyed 1,211 small business owners and sole traders during March and April 2022.
“The small business community shrank in size to the tune of hundreds of thousands over the pandemic,” says FSB national chair Martin McTague. “With Covid numbers now falling, this needs to be the summer where we start to reverse that trend — policymakers should be doing all they can to facilitate and encourage start-ups and side hustles.”