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This week…. Retail…Co-op threaten to make inroads into the Big Four’s market share, as Aldi assert they are aiming to maintain their new found increase in share beyond the downturn …Retail Sales figures down for June, but B&Q and John Lewis show there is still positive results to be had whether it be from sales or from controlling costs…online continues to grow, with Thorntons and Mothercare delivering positive results, as do Amazon Digital…. A resolution of sorts in the three way Yahoo/Microsoft/Google wrangle…Google are now the top UK brand, and Facebook is the top social networking site by some margin Media…Online newspaper audiences continue to grow, with Guardian back on top ahead of the Telegraph and the Daily Mail Property… Mortgage approvals fall for June


Retail - The Co-operative Group is planning a £50m advertising relaunch next year, which will promote the mutually-owned organisation’s ethical approach by contrasting its own practices with the “corporate greed” mentality of many public companies. A £10m umbrella branding campaign will promote the Co-op’s ethical position across its activities, which span over 4,300 high-street outlets, including grocers, a pharmacy chain, travel agents, funeral parlours and Co-operative Financial Services. The relaunch had been planned for this year, but was delayed as the Co-op introduced new branding into its estate of 2,200 high-street convenience stores. The campaign will explain that Co-op’s profits are distributed to 2.5 million members, who pay £1 to join and earn points when they buy goods and services from the group. It aims to build on the Co-op Group’s strapline “Good for everyone”. Co-operative Group chief executive Peter Marks says “Corporate greed is being seen as not good, and people are getting tired of it. We offer something different – yes we have to make a profit, it is what we do with the profits that makes us different. “We have a different DNA from most PLCs. We aren’t just maximising wealth for a few shareholders. Our customers are our shareholders.” (Source: Marketing Week) Comment: With 8% of the market following last week’s purchase of the Somerfield chain, it will be interesting to see if this ethical approach can see them make significant inroads into the big fours’ share. Certainly discounters such as Aldi are making a dent currently:- Aldi, Britain’s biggest budget supermarket, has rebutted the suggestion its increased market share is merely a temporary phenomenon, as figures showed the sector has grown markedly over the past year. The comments come after Andrew Higginson, Tesco finance director, said discounters were having their “moment in the sun” as belt-tightening consumers reined in expenditure.


Tony Baines, managing director of buying at Aldi, recognised the German-owned chain had benefited from the rising economic malaise, but argued it would retain the new customers. Mr Baines said the discounter planned to build a “store a week” until it had a 10 per cent market share. Sales data from Nielsen show J Sainsbury enjoyed 6.2 per cent growth in the past four weeks despite heavy promotions by rivals. However, over the 12-week period, both Sainsbury and Tesco fell short of the 7.3 per cent growth recorded by the sector. Asda and WM Morrison both improved their market share. (Source: FT.com) - Retail sales in June slumped at the fastest pace in more than 20 years, after trading in food stores fell at record rates. Official figures show that the volume of sales fell by 3.9 per cent in June – the largest monthly decline since records began in 1986 – taking the annual growth rate to 2.2 per cent. Analysts had expected retail sales volume to decline by 2.5 per cent in June, following May’s surprise rise of 3.5 per cent. Trading volumes in food shops declined by 3.6 per cent – the largest fall in 22 years – while sales in predominantly non-food stores also dropped sharply, by 4.5 per cent. The Office for National Stastistics, which was criticised over May's figures that appeared to be at odds with other surveys, said that monthly data was volatile, and that three-monthly figures gave a better idea of trends. But sales volume in three months to the end of June also show a slowdown in consumer spending, as more people grapple with higher utility, fuel and mortgage bills. Sales rose by 0.6 per cent in the three months to June, behind a 1.7 per cent rise in the first quarter of the year. (Source: Timesonline)


- Shares in Kingfisher, the owner of B&Q, soared today after the DIY chain reported its first increase in like-for-like sales after a year of declines. Helped by good weather, sales at Britain's leading home improvement chain rose by 0.2pc in the 10 weeks to July 12, a marked turnaround from a 8.1pc fall in the first quarter. Sales of seasonal products, like barbecues and outdoor furniture, rose by almost 20pc compared to the same period last year, when Britain was hit by flooding and poor weather. Gross profit margins also increased as stores ran fewer sales and price reductions. Total UK sales for Kingfisher were up 5.1pc, after the opening of 13 new Screwfix and Trade Depot stores. Kingfisher chief executive Ian Cheshire, said: "We have achieved sales growth and taken action to improve gross margins and manage costs in all our major markets. "As anticipated, the U.K. market remains extremely tough, but we are trading solidly." He said recent investments to improve the group's "value credentials" would help the group trade effectively in difficult times. (Source: Telegraph online) Comment: Kingfisher are to be congratulated for the recovery, particularly as they have improved margins and built sales without resorting to a sale and discounting strategy.

- John Lewis, the department store group that is a key benchmark of high street performance, has seen a slight recovery in its sales for the second week running, after a poor performance in May and June. The company's 26 department stores saw a 0.4 per cent increase in year-on-year sales to ÂŁ49.97 million in the week to 19 July, the last week of its clearance sale. The performance represents a second consecutive week of growth in sales. In the previous nine weeks, sales had fallen eight times. The positive outcome was driven by a 5.7 per cent increase in fashion sales. Sales in the electricals, home technology and home categories fell 0.6 per cent and 4.7 per cent respectively. Sales through the retailer's website were also a third higher than the same week last year, helped by a 50 per cent increase in visitors to the site. (Source: Timesonline)


- Consumers are suffering from 'celebrity fatigue', from an overexposure to celebled marketing campaigns, according to a new report from Datamonitor. The report by Datamonitor, claims that the cult of celebrity has reached a crossroads and an aging population means that audience growth is slowing. It says that marketers must therefore pursue new tactics to avoid the pitfalls associated with celebrity-backed campaigns or celebrity-branded consumer packaged goods. One of the problems is that celebrities are endorsing too many different products, undermining both the individual's and the brand's credibility. David Beckham has featured in campaigns for numerous products including Gillette, Pepsi, and most recently for Sharpie pens. He has also fronted work for Emporio Armani. The report found that celebrity scandals or falling status can directly hit an endorsed brand's fortunes; sometimes celebrities' own personal brand strength can overshadow that of the brand they are meant to be endorsing. Datamonitor cited Britney Spears' past relationship with Pepsi as an example of this problem. The report claims that the product itself is emerging as the next generation celebrity -- Apple's iPod and iPhone have transcended mere product status and become globally recognised identities with personalities of their own. (Source: Brand Republic)

- UK shoppers spent £26.5billion online in the first six months of 2008, up 38% on the £19.2billion recorded for the same period last year, according to the latest IMRG Capgemini e-Retail Sales Index. That means online sales are now accounting for 17p in every pound spent, equivalent to half of all supermarket sales. The researchers are now predicting that between 30% and 50% of retail sales will be online in five years. "This is because, as online reaches 20% of all retail sales, retailers experience a tipping point which forces them to seriously re-think the future viability of their business model," explained Mike Petevinos, head of consulting for retail at Capgemini UK. "We have seen this happen for books, music/DVDs and electricals and as the industry as a whole reaches this tipping point in 2008, more categories are sure to follow.� (Source: internetretailing.net)


- Mothercare and Thorntons have both announced strong growth in their 'direct' arms as part of their latest operating results. Mothercare has reported sales up 77.7% on this quarter a year ago in its Mothercare Direct division . On a 'proforma' basis, though, where sales are calculated as though the company had owned Early Learning Centre for the whole year, the sales increase reduces to a strong but more modest 27.5%. Sales for the company as a whole are up 20.7%, but only 0.8% on a proforma basis. Meanwhile Thorntons is reporting a sales increase of 44.3% for Thorntons Direct, the company's internet and mail order operation, for its latest ten week trading period, giving an overall increase in direct sales of 26.6% for the full financial year. Overall sales for the company were up 11.9%. (Source: internetretailing.net) - Amazon on Wednesday reported bumper sales and profits as the weaker US dollar and higher oil prices helped boost sales overseas. Amazon on Wednesday said that growth had remained robust during the three months ending in June, lending credence to the idea that online retailers might fare better than their bricks-and-mortar counterparts in the slower economic environment, as high fuel costs make shoppers more reluctant to drive to stores. “Even driving 10 miles these days is a few dollars of gasoline.� The company, which sells books, music, consumer electronics and other items to customers around the world, said its net profit had more than doubled in the period to $158m. Sales were $4.06bn, an increase of 41 per cent from last time. (Source: FT.com)


Digital

- Activist investor Carl Icahn is to join the Yahoo! board and withdraw his campaign to replace its directors following a peace deal between the two sides. The agreement includes the expansion of Yahoo!'s board, which will grow from nine directors to 11 in order to include two of Icahn's supporters. Icahn has now toned down his calls for Yahoo! to agree to sell itself or its search business to Microsoft. He said: "While I continue to believe that the sale of the whole company or the sale of its search business in the right transaction must be given full consideration, I share the view that Yahoo!'s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders. Jerry Yang, chief executive of Yahoo!, said the deal would help Yahoo!. "This agreement will not only allow Yahoo! to put the distraction of the proxy contest behind us, it will allow the company to continue pursuing its strategy of being the starting point for internet users and a must-buy for advertisers." (Source: Brand Republic) Comment: Good news that the wrangling over a sale and/or partnership strategy can now stop. What would help the industry is if efforts could now focus on making inroads into Google’s massive domination of search. - Google has knocked Microsoft off the top spot to take the crown of the UK's most popular brand for the first time, according to the latest Superbrands survey. The search engine moves up two places from the number three spot last year, knocking Microsoft into second place and Mercedes Benz into third. The survey was compiled by the Centre for Brand Anaylsis and reflects the opinions of 2,200 members of the British public. Google was also named as the UK's strongest brand in a Superbrands survey of 1,500 professionals earlier this year. Despite Microsoft's drop to second place it still comfortably beat rival Apple which just missed a place in the top 10, coming in at number 11. The BBC was the highest placed British company at number four, followed by British Airways and Royal Doulton in fifth and sixth place respectively. The remaining places in the top 10 were taken by BMW in seventh, followed by Bosch, Nike and Sony. None of the top four UK supermarkets - Tesco, Sainsbury's, Asda and Morrisons made it into the top 100 superbrands. (Source: Brand Republic)


- Facebook dominates UK social networking with 45.29% of the market, almost double the share of second-placed Bebo and three times more than MySpace, as micro blogging site Twitter shows major growth. According to the latest figure from Hitwise this is an 188% increase compared with a year ago for Facebook. Top 10 social networking sites in the UK, June 2008: 1. Facebook 45.29% 2. Bebo 25.04% 3. Myspace 14.75% 4. Windows Live Spaces 1.59% 5. Friends Reunited 1.55% 6. Club Penguin 0.83% 7. Yahoo! Groups 0.81% 8. Nasza Klasa 0.75% 9. Faceparty 0.74% 10. Tagged 0.72% Bubbling under there is major growth for micro blogging site Twitter, which has seen its UK traffic soar by 485% this year, 70% higher than the US. (Source: BrandRepublic) Comment: Facebook has certainly positioned itself well, and the demographic shift has been noticeable too, as the age profile becomes older inevitably given it was first only open to students in the US. However, as with all things digital, it pays to stay ahead with features and applications or become superseded (remember Friends Reunited?), so cue the following story:- Facebook has undergone a redesign and is offering new features, as it looks to stand out in the competitive social media space. The revamp features a simpler design, along with the opportunity for users to preview and test new site features. The company is inviting people to use the new design and try out the improved features by navigating back and forth between the new and current versions of the social networking site. Access to the new design will be limited at first, but will gradually become available to all of Facebook's roughly 80 million worldwide users. Among several new features, a "publisher" feature enables users to create content in a centralised area. Using the feature, a user can add photos, upload video, or write notes, rather than navigating to each individual application. Facebook founder and chief executive Mark Zuckerberg said: "Facebook's new design makes it a lot easier for users to share information, and we encourage them to check it out." (Source: Brand Republic)


- As many as 73% of web users have left a favourite website because of intrusive or annoying ads, according to research, with gambling and financial service ads coming off the worst. The research reveals the extent of resistance to badly targeted online advertising, particularly among younger consumers. The independent research, conducted by Opinion Matters for HowTo.tv showed that the figure rose to 84% among 25-34 year olds -- an increase of over 20% on the 2007 findings. In addition, as many as 59% of web users have stopped visiting a website because of intrusive or irrelevant advertising, rising to 70% for 25-34 year olds -- a large increase on the 2007 figures of 16% and 14% respectively. The survey cited gambling sites, financial services companies, car companies, household goods, and beauty brands as some of the worst offenders. Bugbears included ads with loud noises, pop-ups covering web content, and ads that were difficult to close, minimise or click away from. Comment: The idea of any content on the internet is to engage, not enrage. Adnetworks are set up to deliver the numbers, but brands should be careful to ensure that only engaging ad content is used if there is more emphasis on numbers than targeting. Instead of expanding ads that cover content, ideas such as bordering a website’s content with the brand theme (ie taking over a homepage) is less intrusive and far more striking. The article continues with the following on video content:On a more positive note, the research found that younger consumers are actively engaging with online video content, with 83% of 25-34 years old and 74% of 16-24 year olds stating they have watched an online video, compared to a national average of 70%. When asked what would be the effect of a video ad on their favourite website, 56% of 16-24 year olds and 44% of 25-34 year olds said it would make them more likely to purchase the brand, compared to 38% of 35-44 year olds and 29% of 45-54 year olds. Russell Goldsmith, the co-founder and digital director of HowTo.tv, which specialises in producing brand-funded online videos, said the survey highlighted the urgent need for brands and media owners to re-think traditional approaches to online advertising. He said: "The difference in behaviour between younger and older web users is testament that the mass audience model is a strategy that doesn't necessarily work in the online environment, and is one that risks alienating web users and negatively impacting on propensity to purchase." (Source: Brand Republic)


Media - Daily Mail and General Trust, owner of the Daily Mail newspaper, has reported a 5% year-on-year rise in its third-quarter revenues, as its national newspapers offset ad revenue declines with circulation gains and its business divisions continued to grow. Associated Newspapers, publisher of the Daily Mail, Evening Standard and Metro newspapers, registered a marginal 0.4% rise in total revenues to £243m. Circulation revenues, which make up nearly half of Associated's print revenues, were 4% higher than the same period last year, reflecting the increase in the Daily Mail's cover price in April from 45p to 50p. Total advertising revenues in the period dropped by 3%, with strong growth in digital ad revenues offsetting a fall in print revenues. Northcliffe Media, the company's regional newspaper division, was worst hit. Its total revenues for the quarter were down 7% compared to the same period last year. Excluding acquisitions and disposals made in the prior year, underlying revenues were down 5% to £102m. (Source: Media Week) Comment: As with Trinity Mirror, DMGT’s revenues have been hit by a loss of sales revenue from the local press division, a result of reduced cirulations and the migration of classified advertising online. - Guardian.co.uk has bounded back into the lead among the UK's newspaper websites in June after attracting 20.5m unique users, according to the latest ABCe results. The Guardian's audience grew by 11.9% in June, which was also up by 27.65% year on year. About 8.5m or 41% of Guardian.co.uk's total unique users are UK based. Telegraph.co.uk climbed back to second spot with a 6.57% m-on-m increase to 19.71m unique users. This figure is up by a massive 119% yoy. However, the Telegraph has a considerably smaller percentage of UK users than Guardian.co.uk. About 6.47m of the Telegraph's users come from the UK, which is roughly 33%. Mail Online suffered a poor month in June, slumping from top spot into third position. However, this figure is still up by about 35% year on year. The site's UK users reached 4.99m, which is 31% of the total unique users. (Source: Media Week)


Property - Mortgage lending weakened again last month as housing transactions became more tortuous and housebuilders resorted to ever more desperate measures to attract buyers, a range of economic data showed on Wednesday. The British Bankers Association said mortgage approvals for house purchase fell from 27,499 in May to 21,118 in June, 67 per cent below numbers a year earlier. Net mortgage lending rose £3.8bn, well below the six-month average of £5bn. A survey by the Bank of England’s regional agents showed how severely uncertainty over house prices is exacerbating the housing market slowdown sparked by tighter credit conditions. Some estate agencies reported that up to two-fifths of transactions were falling through, whether because sellers had refused a lower offer, lenders withdrawn a mortgage offer, or buyers pulled out through fear of losing capital. (Source: FT.com)


Klebenleiben Update  

Creative Marketing Agency provides a weekly review of the trade and business press marketing stories in the retail, digital, media and prope...

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