Asda, Primark, Bitcoin: Everything that matters this morning
Catch up on all the important marketing news from the last 24 hours with our morning round-up.
Asda puts 800 jobs at risk as it chases Aldi and Lidl
More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the New Year as the supermarket looks to keep pace with Aldi and Lidl.
In a document seen by the Guardian, Asda told workers it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl, stating that being the “cheapest of the big four” was no longer a “viable business model.”
The document also revealed that close to half of Asda’s 153 smallest supermarkets are loss-making.
The retailer is hoping to reduce its operating costs by removing a possible 842 section leaders from its store management teams and cutting the number of hours spent on stacking and tidying shelves at 600 supermarkets, which could affect thousands of workers. Asda is also considering the prospect of redundancy.
In August, Asda cut hundreds of jobs in 18 underperforming stores and asked staff in another 59 to work more flexibly, before cutting 300 jobs at its Leeds head office.
READ MORE: More than 800 senior Asda shopfloor staff face pay cut or redundancy
Primark and Sports Direct exposed for underpaying workers
Primark and Sports Direct have been forced to pay back thousands of pounds to staff after it was revealed both retailers had been paying employees below minimum wage.
Fast fashion giant Primark owed a total of £231,973 after charging staff for uniforms, with each of the 10,000 affected employees being refunded £23.75.
Meanwhile, Sports Direct was forced to pay back £1.1m to more than 4,000 underpaid workers. The underpayment relates to the retailer’s main distribution centre in Shirebrook, Derbyshire, where employees were docked a quarter of an hour’s pay if they clocked on one minute late.
The two retailers had the most to repay of the 260 firms named on the government’s list of companies found to be paying their staff below the legal minimum. In total 16,000 workers had not received at least the minimum wage across all the affected companies, the highest number since 2013.
READ MORE: Primark and Sports Direct named for underpaying staff
Bitcoin soars in value, crossing the $17,000 mark
The value of Bitcoin has soared by 70% this week, briefly crossing through the $17,000 (£12,615) mark in Asian trading.
Analysts are, however, warning that the cryptocurrency could be heading for a “dangerous bubble” as Bitcoin starts trading on the futures market on Sunday via the Chicago-based Cboe Futures Exchange.
The creation of a futures market for the cryptocurrency has led fans to believe this could be the start of the Bitcoin market becoming regulated. However, the Futures Industry Association, which includes Wall Street’s largest banks, brokers and traders, has expressed concerns that contracts for Bitcoin futures trading were approved “without properly weighing the risks”.
READ MORE: Bitcoin crosses through $17,000 as concerns mount
Pret eyes service station locations with Roadchef deal
Pret A Manger is to open more stores at motorway service stations after striking a deal with operator Roadchef.
The sandwich chain is expected to open at a Chester-based service station in the run up to Christmas, before branching out to services at Clacket Lane West in Kent in the spring.
Pret is expected to evaluate these locations before expanding its service station offering with Roadchef, which owns 30 sites across the UK. The restaurant chain already operates a motorway service station shop at a Welcome Break site in Potters Bar.
Pret is following in the footsteps of Marks & Spencer, Starbucks and Costa Coffee, all long established fixtures in the service station market. Both Starbucks and Costa are said to be actively targeting drive-through service station sites as they look to move their offering away from the high street.
READ MORE: Pret A Manger to open at more service stations following Roadchef deal
Huawei debuts first Christmas ad in Europe
Chinese smartphone brand Huawei is launching its first European Christmas campaign, created in partnership with charity Save the Children.
Launching today across the UK, Ireland, France, Spain, Portugal and Belgium, the Santa Rebooted campaign shows a streamlined Father Christmas reaching his full festive potential with the help of smart technology. This modern Santa orders presents via mobile, has digitally printed gifts delivered by drone, chills out with a spot of yoga and drinks kale juice.
Huawei is encouraging viewers to share the film to raise awareness of Save the Children, with the company having donated £500,000 as part of the campaign to help the charity fund healthcare, education, protection and food for children worldwide.
Thursday, 7 December
Calls to extend plain packaging could cost the drinks industry $293bn
The drinks industry could stand to lose $293bn if calls to extend plain packaging beyond tobacco products are enforced, according to a new study.
The analysis by Brand Finance looks at the potential financial impact of such legislation across four categories, including alcohol, confectionery, savoury snacks and sugary drinks, with drinks brands found to be most vulnerable.
Eight major brand-owning businesses were analysed. The Coca-Cola Company and PepsiCo stand to lose $47.3bn and $43.0bn respectively, according to the speculative analysis, equal to 24% and 27% of their total enterprise values.
AB InBev, Heineken, Pernod Ricard would see 100% of their brands exposed.
David Haigh, CEO of Brand Finance, says: “To apply plain packaging in the food and drink sector would render some of the world’s most iconic brands unrecognisable, changing the look of household cupboards and supermarket shelves forever, and result in astronomical losses for the holding companies.”
However, he believes the predicted loss of brand contribution to companies is just the tip of the iceberg. “Plain packaging also means losses in the creative industries, including design and advertising services, which are heavily reliant on FMCG contracts.”
Pret doubles reusable cup discount
Pret A Manger hopes to boost its environmental credentials by doubling the discount it offers to customers bringing in reusable cups to 50p from the first week of January.
It has been offering a discount of 25p since August but quickly decided to ramp up its efforts.
CEO Clive Schlee says the company did consider charging customers for paper cups in order to make a dent in the 2.5 billion disposable coffee cups that are thrown away in the UK every year, but he said the company “decided that it goes against our instincts”.
Instead Pret chose “to be generous to our customers than to tax them”. It is now waiting to see what impactits decision will have.
Pret is also hoping to launch “a well-designed reusable cup” later in 2018 and is exploring the idea of making china cups more available in stores with seating.
READ MORE: Pret A Manger to double reusable coffee cup discount
Google cleared of paying men more
Google has been found not guilty of systematically paying male employees more than women.
The lawsuit was brought by three women who used to work at the tech giant – one who worked in communications and two engineers. They sued the company in San Francisco Superior Court in September seeking class action status, in the hope of representing all women who had worked at Google in California for the last four years.
However, a judge ruled in favour of Google, dismissing the lawsuit, which claimed there were “systematic compensation disparities against women pretty much across the board”. After analysing the evidence, Superior Court judge Mary E. Wiss said the allegations were “conclusory, and insufficient to state class claims”.
She added that the three women failed to demonstrate they were underpaid for doing the same job as their male counterparts.
READ MORE: Google lands victory in gender discrimination lawsuit
Apple criticised for preventing small businesses from using App Store
Apple’s move to prevent apps from being developed using ready-made templates has been criticised for discriminating against small businesses.
The move is an attempt to reduce spam and illegitimate apps on the App Store as it is easier for fraudsters to create apps using a template. But templates are used by small businesses for the same reason. Smaller operations such as shops and restaurants, and organisations like sports clubs and schools, often opt for templates as it is cheaper than developing an app from scratch.
Apple changed its App Store guidelines in June without fanfare. From 1 January 2018, it says “apps created from a commercialised template or app generation service will be rejected”.
US Congressman Ted Lieu has written to Apple to complain that while he understands the need to reduce spam, he is “concerned [that] in weeding out several bad actors — Apple may be casting too wide of a net and invalidating apps from longstanding and legitimate developers who post no threat to the App Store’s integrity”.
READ MORE: Apple faces criticism over change to App Store rules (£)
Boss of Poundland owner exits amid ‘accounting irregularities’
The CEO of Poundland’s owner has quit following claims of accounting irregularities, which wipe two-thirds off the company’s value.
Markus Jooste has headed up Steinhoff International for the past 20 years. Its shares plummeted to an eight-year low after his departure was confirmed.
The South African company said new information had surfaced relating to “accounting irregularities requiring further investigation . . . Markus Jooste, CEO of Steinhoff, has today tendered his resignation with immediate effect and the board has accepted the resignation.”
Stenhoff acquired Poundland for £610m in September last year. Its main focus is furniture, however, and it employs 90,000 people in 30 countries.
READ MORE: Exit of Markus Jooste over accounting issues sends Poundland owner Steinhoff into a spin (£)
Wednesday, 7 December
Google pulls YouTube from Amazon devices
Google and Amazon have been caught in rather unusual public spat, with Google criticising the online retailer for a “lack of reciprocity”. It has said it will block YouTube from two Amazon devices, and criticised the online retailer for not selling Google hardware.
The companies are in fierce competition with one another, with both parties looking to dominate areas such as cloud computing and online search, and sell voice-controlled gadgets like the Google Home and Amazon Echo Show. Amazon’s suite of voice-controlled devices has outsold Google’s so far, according to a study by research firm eMarketer from earlier this year.
In a statement, Google said, ”Amazon doesn’t carry Google products like Chromecast and Google Home, doesn’t make (its) Prime Video available for Google Cast users, and last month stopped selling some of (our sister company) Nest’s latest products.
“Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and Fire TV,” Google said. “We hope we can reach an agreement to resolve these issues soon.”
READ MORE: Google pulls YouTube from Amazon devices, escalating spat
Government hits out at Facebook for new ‘Messenger Kids’ app
Health secretary Jeremy Hunt has told Facebook to “stay away from my kids” after it launched a new messaging app aimed at children.
The social network announced on Tuesday it was testing Messenger Kids in the US for those under 13 who cannot sign up for its full service.
The health secretary took to Twitter to condemn the new tool, saying the firm had promised to prevent under-age use of its product.
“Instead they are actively targeting younger children,” he wrote. “Stay away from my kids please Facebook and act responsibly!”
Not sure this is the right direction at all. Facebook told me they would come back with ideas to PREVENT underage use of their product, but instead they are actively targeting younger children. Stay away from my kids please Facebook and act responsibly! https://t.co/XrwfSHsUMj
— Jeremy Hunt (@Jeremy_Hunt) December 5, 2017
Messenger Kids is a simplified version of Facebook’s existing messaging app which needs parents to approve any contacts added by their children. Once confirmed to be safe, friends can do live video chats, send pictures and text each other.
The firm said it offered a more appropriate app, which parents could allow their children to use on tablets and smartphones.
READ MORE: Jeremy Hunt hits out at Facebook kids’ app
General Electric to cut UK roles by up to 42%
As many as 670 British jobs are at risk after US conglomerate General Electric (GE) conducted a review into its power division.
The GE Power unit currently employs 1,600 employees in the UK, meaning the cuts would slash the British unit’s workforce by 42%. The jobs will be in Alstom’s energy business, which it acquired in 2015.
The UK cuts are thought to be part of a wider cull, with 4,500 roles to be slashed across Europe, according to French newspaper Les Echos.
General Electric, in a statement on Tuesday evening, said that, “based on the current challenges in the power industry and a significant decline in orders, GE Power is currently reviewing its operations to ensure the business is best positioned to respond to our market realities and for long-term success”.
READ MORE: General Electric said to be cutting up to 670 UK roles
Disney ’nearing a deal’ with 21st Century Fox
Disney and 21st Century Fox are closing in on a deal that could come as quickly as next week, according to a CNBC report citing sources familiar with the matter.
The transaction would involve Disney acquiring Fox’s studio and television production assets — a portion of the business that has an enterprise value of more than $60bn.
The package sought by Disney reportedly includes Fox’s A&E and Star TV networks, as well as its regional sports operation, movie studios, and stakes in Sky and Hulu, among other assets, according to the CNBC report. As proposed, the deal would leave Fox with its news and sports assets.
This latest development comes amid considerable interest for Fox from the likes of Comcast and Verizon.
READ MORE: Disney is reportedly nearing a deal to buy 21st Century Fox’s TV business
Pernod Ricard expands into voice tech with Amazon Show partnership
Drinks giant Pernod Ricard, which owns brands such as Absolut Vodka and Malibu, is stepping up its efforts to serve people at home by focusing on voice technology.
It has developed a new ‘What Cocktail?’ Alexa Skill in partnership with Amazon, which is compatible with the new Amazon Show device. Its aim is to help young adults create drinks out of ingredients they already have at home, provide inspiration for new cocktails and even suggest tips to make the best possible drink.
The move comes in light of research showing the number of people enjoying cocktails at home has increased 23%, with 22 million cocktails searches made in the last year. Pernod Ricard also believes this number is set to increase.
Pernod Ricard has previously launched its own ‘connected’ cocktail bar, and has tested out scannable bottles.
Sille Opstrup, head of digital for Pernod Ricard UK, comments: “Voice-activated products are changing how we interact with technology, and with voice-led searches already up to three times quicker than text-searching, and with experts predicting 50% of enquires will be made this way by 2020, now is the time to start connecting with audiences using this platform.”
Tuesday 5 December
CES draws marketers’ fire for all-male headliners
The Consumer Electronics Show in January often sets the tone for the year in the world of consumer technology, highlighting the trends that manufacturers see as having mass-market potential, but it is also receiving criticism for its lack of diversity. All six of the headline speakers currently named on its website are men, five of them white. That has led campaign group Gender Avengers to issue an ‘action alert’ demanding that CES do something about the ratio.
Many CMOs have also joined in, Ad Age reports, including HP’s Antonio Lucio, Twitter’s Leslie Berland, JP Morgan Chase’s Kristin Lemkau and former president of PepsiCo’s global beverage group Brad Jakeman. CES’s organisers claim that 10 women have turned down offers to be headline speakers in 2018, while the show also points out its record of featuring female headliners in the past and boasts a diverse schedule of speakers and exhibitors “beyond the keynote stage”.
READ MORE: Marketers lash CES for lack of women keynote speakers
High street sales slump ahead of Christmas
Marketers and retailers alike are predicting a tough Christmas sales period this year, and their fears have already been confirmed for bricks-and-mortar stores at least by new figures from the British Retail Consortium, showing that in-store non-food sales were down 3% year-on-year in November. That follows figures indicating lower footfall during Black Friday, the annual day of discounting on 24 November designed to lure shoppers in for pre-Christmas bargains.
Online non-food sales were up 6.5%, according to the Telegraph, which is a slower increase than previous years and still means non-food sales were down overall. Total retail sales were up 1.5%, but that was accounted for by the rise in food sales, largely driven by higher prices. It backs up the analysis that food inflation is likely to give consumers less to spend on presents and other non-food purchases in the coming months.
“Black Friday, the big retail event of the month, failed to fundamentally shift underlying trends in spending,” said BRC chief executive, Helen Dickinson. Separate data from Barclaycard also indicates shoppers’ spending growth is not matching price rises, indicating they are cutting back on the goods they buy.
READ MORE: Retailers struggle to summon Christmas cheer as inflation squeezes shoppers
Consumers could buy and sell their own energy
UK energy networks are expected to unveil new plans that will enable households to trade energy created by solar panels, for example, in regional markets enabled by ‘smart grid’ technology. The reforms to the way the UK’s energy grid operates will be announced tomorrow, allowing power to be distributed more efficiently throughout the network and enabling energy that isn’t needed by a particular property to be sold back. Consumers could even be able to sell energy directly to neighbours using blockchain technology.
According to the Telegraph, the Energy Networks Association says small trials have been under way for a year, and the use of local energy markets will be ramped up over the next six years.
READ MORE: Energy networks to unveil plan for £17bn smart-grid boom
Creative England targets female entrepreneurs
Women in the creative industries will be able to apply for funding from a £2m pot that Creative England is offering to female entrepreneurs as part of a new campaign called Be More Boss. The not-for-profit organisation, which invests and supports businesses across tech, games, TV and film, is also partnering with Facebook and Marketing Week’s sister title Creative Review to profile entrepreneurs as part of the campaign. These will launch next week, focusing on the founders of RunAClub, Snaptivity, Prolifiko and Sponge UK.
Bec Evans, co-founder of Prolifiko, said: “Starting a business is tough. But for female founders it’s even harder – only 9% of funding goes to female-led businesses. The saying ‘you can’t be what you can’t see’ might be overused, but it remains depressingly true.”
Exchange rates benefit London’s brand
UK shoppers and consumer-facing brands may be having a tough time as a result of the inflation caused by the pounds weakness in the currency markets since the Brexit vote, but one British brand is seeing huge benefits – London. The city received more visitors than any other in Europe in 2017, according to data from online travel agent eDreams, with European tourists to the capital seeing a 24% spike.
The pound’s weakness against the euro is believed to be a key driver, making UK holidays more affordable for visitors from the continent, in spite of the increase in terror attacks that have taken place in the UK this year. London is also now the most popular European destination for UK travellers, up from fourth in 2016, thanks to the cost of going abroad rising as a result of exchange rates.
READ MORE: London attracts most European visitors as pound’s Brexit slump helps capital overcome terrorism fears
Monday 4 December
Rupert Murdoch restarts Fox sell-off talks with Disney
According to reports, 21st Century Fox has restarted talks with Disney over plans to sell large parts of the company.
Disney wants to acquire the 20th Century Fox movie studio as well as Murdoch’s 39% stake in British satellite broadcaster Sky. And although any deal would break-up Murdoch’s media empire, he would still keep the likes of Fox News and its broadcast network.
Disney’s move comes as Fox’s move to gain full control of Sky in a £11.7bn deal is investigated by the Competition and Markets Authority (CMA). The CMA claims it would give Murdoch too much control of the UK media industry.
READ MORE: Disney is eyeing up 21st Century Fox again
Facebook’s new London office to create 800 jobs
The UK workforce of Facebook will increase by more than 50% after today’s (4 December) opening of a new London-based office.
The office is expected to create 800 new jobs over the next year, with the move from the social media giant also a vote of confident in the UK economy amid Brexit.
The new site, which will be located just off Oxford Street, will have a heavy focus on engineering and will host LDN_LAB, a scheme where startups can take three-month programmes to accelerate their development.
“Today’s announcements show that Facebook is more committed than ever to the UK and in supporting the growth of the country’s innovative startups,” said Nicola Mendelsohn, vice-president of Facebook’s European operations.
“The UK’s flourishing entrepreneurial ecosystem and international reputation for engineering excellence makes it one of the best places in the world to build a tech company.”
READ MORE: Facebook’s new London office brings 800 jobs to the capital
Samsung wants users to use their palm to unlock a phone
With Samsung smartphone users already able to unlock their phones by scanning their fingerprint and eye, the tech giant is now looking to do the same thing for the palm.
Samsung has fired a patent for the technology, which describes an authentication system for your phone where a person’s password is embedded in an image of the user’s open palm.
When you point the phone’s camera at your hand, it displays some of the characters to give you a hint as to what your complete password could be. No two palm prints are completely identical, making the technology potentially useful.
READ MORE: Future Galaxy phones could fetch passwords with your palm
London is Europe’s top performing city, claims study
London is Europe’s top-performing city, according to a new study by the Milken Institute, which analysed information including new job creation, wage growth and technology.
In fact, the UK claimed three spots in the top 10 and five out of the top 20. In comparison, Germany had just two cities in the top 20, while France, Italy and Spain did not feature at all.
“Inner London-East is among the most dynamic economies in Europe, leading all large metro areas in job growth over the last five years,” Minoli Ratnatunga, a Milken Institute director and co-author of the report, told the Telegraph.
“We trace its economic rejuvenation to a combination of direct policy implementation – including the Big Bang that aided financial services and related growth in Canary Wharf – and organic entrepreneurial-led growth in digital and technology areas [aided] by the Tech City cluster.”
READ MORE: London named Europe’s top performing city in study
The Co-op in waste crackdown with ‘industry first’
In a bid to cut down on food waste, the Co-op’s 125 East of England stores will sell food beyond its ‘best before’ dates in what it is calling an ‘industry-first.’
The scheme will focus on dried foods such as crisps and pasta as well as tinned products, which will all be sold for just 10p. WRAP, the waste and recycling advisory body, said the move fully complied with food safety standards.
The UK throws away 7.3 million tonnes of food every year, according to the Food Standards Agency. And the East of England Co-op’s “Don’t be a Binner, have it for dinner” campaign follows a successful three-month trial in 14 stores.