Thursday 21st August

Shops sales up, but prices tumble

Sales made by UK retailers are coming at the expense of profit margins, new data on the health of the retail industry suggests....

Growth in sales made by UK retailers are coming at the expense of profit margins, new data on the health of the retail industry suggests.

Sales were up 2.6 per cent in July compared to 12 months before, and by 0.1 per cent compared with June. It is the seventeenth consecutive month of growth on the high street.

The overall amount spent by UK shoppers increased 1.7 per cent on an annual basis, but slipped 0.1 per cent month-on-month.

But, in less welcome news for shop owners, prices charged for goods tumbled 0.9 per cent year-on-year in July.

Online sales continued to speed ahead, jumping 11.2 per cent in July compared with July 2013, but sales slipped 1.9 per cent month-on-month, largely due to seasonal factors.

Meanwhile, separate figures from the CBI showed confidence being maintained in among the UK’s manufacturing businesses.

In the survey of 414 manufacturers, 37 per cent said output had increased in the last three months, while 25 per cent said it slowed. The balance of 12 per cent was lower than the June reading of 23 per cent.

But manufacturers are confident about the immediate future with 42 per cent anticipating growth and 11 per cent expecting a decline in activity.

Katja Hall, CBI deputy director-general, said: “The outlook for UK manufacturers remains healthy, with both total and export orders firming up. Despite a dip in the pace of output growth, companies expect a strong pick-up in the next three months.”

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Institute preps people to work in start-ups

Executives from Yelp, Twitter and Boughtbymany are to help people gain the skills needed to work in start-up businesses under a new programme run by the Startups Institute in London....

Executives from Yelp, Twitter and Boughtbymany are to help people gain the skills needed to work in start-up businesses under a new programme run by the Startup Institute in London.

The inaugural course will start on 6 October and will also feature experts from Episode1, MassChallange, citysocializer and Pivotal Labs. The course will cover marketing, web development, product development, sales and account management.

Katarina Jones, associate director of the Startup Institute in London, said the course would help to plug the yawning skills gap facing London’s businesses, particularly in the growing technology sector.

“Finding the right talent is a real issue for tech startups in the capital and is a serious threat to London’s long-term position as the leading startup hub in Europe,” she said.

“We’re thrilled to be here and to be working with such a high calibre of partners, but we’re just one small solution to a much larger issue.

“Business leaders and policymakers across the UK need to recognise the role of startups in our economy and ensure we’re producing a workforce fit to drive forward these emerging businesses.”

The Startup Institute says it has experienced high demand for its course, with three applicants for every available place.

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Self-employment at record highs

The number of self-employed people working in the UK has reached its highest level ever, a fact which is driving the rise in employment generally....

The number of self-employed people working in the UK has reached its highest level ever, a fact which is driving the rise in employment generally.

Figures from the Office for National Statistics (ONS) show that 4.6 million people work for themselves, accounting for 15 per cent of the working population. It is the biggest proportion since records began 40 years ago.

In addition, 356,000 employees have declared a second income stream from self-employed work.

It is a positive sign for the entrepreneurial economy, with better and cheaper communications technology allowing greater numbers of people to work for themselves.

But it is not all good news. The ONS also revealed average earnings from self-employment falling 22 per cent since 2008.

“Total employment in the second quarter of 2014 was 1.1 million higher than in the first quarter of 2008, just before the economic downturn that hit the UK,” stated the ONS report.

“Of this increase, 732,000 was among people who are self-employed so the rise in total employment since 2008 was predominantly among the self-employed. The total number of employees rose by 339,000 over the same period.”

ONS self employment figures

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Wednesday 20th August

New debt and equity crowdfunder targets start-ups

A new crowdfunding platform offering both debt and equity funding has launched, providing finance to UK small and medium businesses....

A new crowdfunding platform offering both debt and equity funding has launched, providing finance to UK small and medium businesses.

Funding Tree is an FCA-regulated platform offering businesses the chance to pitch for loans and investments funded by a pool of business angels.

The business says its goal is to partner with UK SMEs and build long-term relationships, as opposed to one-off transactions.

Deals currently live on Funding Tree include:

Premier Digital Media (seeking £40k loan) - Berkshire-based company that produces innovative accessories to wirelessly extend the usage time of smartphones and tablets.

Qwaqoo (seeking £100k for 15% equity) - The must-have product for businesses needing to fill cancelled appointments or wanting instant footfall.

Dolce Gelato (seeking £100k for 30% equity) - A new restaurant concept in the dessert market that offers a unique, modern-day Gelateria dining experience .

Dillen Iyavoo, Funding Tree’s CEO, said: "The finance requirements of companies are always changing and, during a typical growth cycle, will often switch from equity to debt and back again.

“It’s these changing demands that we have set out to accommodate with Funding Tree, which is able to offer UK SMEs the type of finance they need when they need it.”

Funding Tree joins a growing range of crowdfunders targeting small businesses and start-ups. In the UK, these include Crowdcube, Kickstarter, Crowdfunder and Seedrs.com.

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Shine comes off UK app market

The craze for mobile applications appears to be waning with new figures suggesting a drop in the number of new downloads by users in the UK....

The craze for mobile applications appears to be waning with new figures suggesting a drop in the number of new downloads by users in the UK.

Research by accountancy firm Deloitte shows that the average smartphone or tablet user downloaded 1.82 apps this year compared with 2.32 in 2013.

The figures also revealed that the number of users failing to access any apps at all increased from less than 20 per cent to 31 per cent during the same timeframe.

Deloitte analyst Paul Lee said: "We are reaching a limit in the UK in the volume of app store downloads. Each additional new smartphone [owner] has less inclination to download apps."

The market adjustment is partly due to the better quality of apps on the market, meaning users are retaining them longer and not feeling the need to upgrade.

An earlier Deloitte report also pointed to increasing smartphone penetration into the over-55 market, which is less inclined to use the full scope of handsets and is sceptical about spending money on websites.

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Tuesday 19th August

What Can We Learn From BuzzFeed’s Success?

A venture capital firm recently invested $50 million dollars into BuzzFeed. That brings Buzzfeed’s valuation up to $850 million dollars in total, which is more than the Washington Post and half that of The Times....

A venture capital firm recently invested $50 million dollars into BuzzFeed. That brings Buzzfeed’s valuation up to $850 million dollars in total, which is more than the Washington Post and half that of The Times.

By Tim Kitchen, Head Ninja at Exposure Ninja online marketing

BuzzFeed has grown from a viral lab with a penchant for cat videos to a publication with the ability to break serious news stories and hire Pulitzer prize winning journalists. The website once dismissed by its rivals as a ‘toy’ is now seeing its signature listicles (list-based articles) imitated everywhere.

BuzzFeed has produced the model for successfully navigating the digital marketplace, and the older publications are desperate to follow.

Content is King

As Bill Gates said back in ‘96, content is king. BuzzFeed does more than produce excellent content though, Buzzfeed produces content that is both engaging and sharable. Not only do shares ‘prove’ engagement as far as advertisers are concerned, but sharing is what enables content to go viral.

BuzzFeed have wisely used their profits to bring more talent to the company, which has helped them in their attempts to branch out into long form articles and investigative journalism.

Unsurprisingly, sharable content and social media go hand in hand. BuzzFeed gets a staggering amount of traffic through Facebook. Pinterest is the second most common way that they get people onto their site, and they also do well on YouTube, which attracts another cool two million viewers.

BuzzFeed understand that by using a wide array of media they can reach the widest possible market.

We’re all Individuals

BuzzFeed’s Editorial Director, Jack Shepherd, points out that a lot of their most widely shared articles appeal to the reader’s sense of identity. A quick search reveals that the word “you” appears on the BuzzFeed homepage much more frequently than on traditional news sites.

One of BuzzFeed’s most popular articles of all time is a quiz called “What State Do You Actually Belong In?” People are much more likely to share something that they can strongly identify with because it allows them to express their individual values and establish an emotional connection.

Another major advantage that quizzes like this have over the news is that they age much more gracefully. Nobody shares last year’s news items, but a quiz on which state you belong too can continue knocking around the internet accumulating Facebook likes for years.

BuzzFeed also appeals to identity through niche content, such as “67 Telltale Signs that you went to Boarding School” and “How to be a Pastel Goth.” Conventional wisdom told people looking to make it on the internet to find their niche. BuzzFeed instead found a way to get very different niches together in one place.

They can get away with this because they produce so much content. With hundreds of articles going up each day, they can afford to be more scattergun in their approach.

The Value of Talent

BuzzFeed has hired a small army of contributors to keep content output high. Its success proves that excellent writers and written content are still extremely valuable in the digital age when given the right platform.

BuzzFeed is one of a diminishing number of websites that still pays a number of its writers, and though there have been some controversies surrounding plagiarism and copyright infringement, in general the investment has paid off.

BuzzFeed does accept unpaid contributions from the community, though it has a focus on dedicated users who have an understanding of the BuzzFeed style and how to replicate it.

Sharability is better than accuracy. Marketers have known for decades that being seen can be much more important than being right. When newspapers were pretty much the only source of current factual information, they lived and died by their ability to report truthfully.

Now that accuracy is in fruitful supply, demand has lessened. Sometimes it is the interest of a publication to be a little bit less rigid with the facts. BuzzFeed provokes engagement from its readers by stating opinions as facts, or missing out some relevant piece of information.

Its readers may disagree, challenge, debate or fill in the gaps, but so long as they’re doing it on BuzzFeed, it can work out to the site’s advantage.

Follow the money

At the end of the day, BuzzFeed’s monetary success comes from advertising. BuzzFeed suggests there is no reason why advertisements shouldn’t be just as informative, engaging or humourous as original articles. Nearly all content is an advert for something, it just might not be immediately obvious to the viewer.

It could be Game of Thrones, cat food, or BuzzFeed itself, but If you go on their homepage, chance are you won’t even be able to see the ads. That doesn’t mean that they aren’t there.

BuzzFeed uses content marketing rather than traditional banner ads, claiming that its ads are effective for the same reason that its articles are sharable - they appeal to the viewer’s sense of individuality which allows them to make an emotional connection with a brand or product.

With most web pages, advertisers have reasonable doubt that the number of views doesn’t actually tally up with the number of reads. BuzzFeed’s true success has been restoring brands faith in advertising, and that’s where the money is coming from.

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Confidence growing among UK’s medium-sized businesses

The UK’s medium sized businesses are more confident than their counterparts in the US, Germany, Australia and Japan, according to a survey by American Express....

The UK’s medium sized businesses are more confident than their counterparts in the US, Germany, Australia and Japan, according to a survey by American Express.

Data from mid-market businesses around the globe – defined as having revenue between £3 million and £600 million – shows that nearly half of UK firms expect to experience growth in the second half of 2014.

Meanwhile, two-thirds have increased sales and nearly the same number – 62 per cent – have added new recruits this year already. In further a sign of confidence, more than six in 10 businesses are exporting to global markets, with key markets of US, China and India.

Brendan Walsh at Amex said: “This survey clearly sees a return to prosperity for UK companies and the economy.

“The mid-sized company sector is the engine room of Britain’s economy, and its resounding commitment to invest to fuel further growth this year is another in a long series of good news headlines for UK PLC.”

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Inflation slows to 1.6 per cent

The UK rate of inflation slowed to 1.6 per cent in July, beyond market expectations and well below the Bank of England’s target rate of two per cent....

The UK rate of inflation slowed to 1.6 per cent in July, beyond market expectations and well below the Bank of England’s target rate of two per cent.

According to government number crunchers, consumer prices dropped from 1.9 per cent in June, although they remain well above wage increases which grew by just 0.6 per cent in the three months to June.

Falling prices in clothing, footwear, food and non-alcoholic drinks helped to put a brake on inflation, according to the Office for National Statistics (ONS).

Separate data from ONS showed that the average house price in England and Wales slumped 2.9 per cent in August compared with July, while house prices in London fell 5.9 per cent during the same period, the fastest drop for a single month on record.

Analysts at Rightmove said the changes were due people becoming more aware of personal finance and the cost of mortgages finally starting to increase.

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Monday 18th August

Shoppers deserting the high street

The number of people venturing out onto British high streets fell 1.7 per cent in the 12 months to July, representing the biggest drop in activity from any part of the retail industry....

The number of people venturing out onto British high streets fell 1.7 per cent in the 12 months to July, representing the biggest drop in activity from any part of the retail industry during the period.

According to figures by the British Retail Consortium (BRC) overall footfall fell 0.6 per cent last month, a slightly smaller decline than the 0.7 per cent annual drop in June.

Shopping centres located outside town centres experienced a smaller fall of 0.5 per cent, which was a better result than the 1.2 per cent slide the previous month.

But in more iffy news for the bricks and mortar retail sector, the number of vacant shop premises was just over 10 per cent of the total during July, although this represented a decline in empty shops from April’s rate of 10.6 per cent.

BRC director general Helen Dickinson said: "The reduction in the shop vacancy rate for the third successive quarter is heartening, with the vacancy rate at its lowest level since our records began in July 2011.

“However it is still the case that every tenth shop remains unoccupied. This reinforces the need for a fundamental overhaul of commercial property taxes, which would increase retailers' confidence about investing in new or existing retail premises and thus help rejuvenate our high streets."

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Gender pay gap widens in recession

More women have fallen into low paid work and zero-hours contracts since 2008, causing the pay gap between the sexes to widen, claims an equality group....

More women have fallen into low paid work and zero-hours contracts since 2008, causing the pay gap between the sexes to widen, claims an equality group.

According to the Fawcett Society, some 820,000 women have been force into low paid and insecure jobs since the last recession began in 2008. It says one-in-eight women are now on zero-hours contracts.

In a survey of 1,000 women, it found that nearly half described themselves as worse off than in 2008 with the gender pay gap stretching to 19.1 per cent. Just under 10 per cent of respondents said they had taken out a payday loan to help with bills.

Dr Eva Neitzert, deputy chief executive at the Fawcett Society, said: "The evidence is clear, after five years of decline, the UK economy is back on the upswing. Employment is up, unemployment is down and GDP is improving.

"However, as our research shows, low paid women are being firmly shut out of the recovery. The numbers of women in low paid, insecure work are still alarmingly high," she said.

Gloria De Piero, shadow minister for women, said: "It's clear that this isn't a recovery for working women. Under David Cameron and Nick Clegg, more women are struggling on low pay, in insecure jobs and not getting the hours they and their families need."

But the government rejected the claim. Women’s minister Nicky Morgan said it had improved working conditions for women on the whole. “We're seeing more women in full time work than ever before and although the gender pay gap remains too high, it is narrowing and for full-time workers under 40 is almost zero," she said.

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