Business News (August 2017)

Off the rails again

Britain’s busiest rail station was practically at a standstill this week following a points failure and coach derailment after a collision with an engineering vehicle on the outskirts of London’s Waterloo Station. Unfortunately this event also coincided with an announcement that prices were about to rise for commuters in and out of London.

Calls to the government to introduce frozen rail fares have been made following details of further increases to rail travel prices in 2018. The Campaign for Better Transport have raised concerns that commuters simply cannot keep paying more for their fares, and want to see ticket prices frozen in January 2018. The Campaign for Better Transport have also queried why the government can freeze duty on fuel and not on rail travel.

Many commuters will be paying an extra 3.6% from January 2018 due to the high rate of inflation in July this year, also attributed to the decision to leave the Eurozone following the EU referendum which has led the value of Sterling to take a nose dive.

The increase in rail fare however had been predicted following Brexit, and the effect it has had on the pound. Rail staff’s wages will remain the same however, and they will not receive any further benefits from the rises which seem unjustifiable in some quarters.

These price increases will affect the price of tickets on most routes. It has been reported that a weekly season ticket from Brighton to London will increase by an additional £3.80, from £104.60 to £108.40. Travellerss using an off-peak return between Manchester and Birmingham will see a rise of £1.30 from £37.10 to £38.40. Commuters who purchase an annual season ticket from Winchester to London will be expected to pay an extortionate £5,130, which is an increase of £178.00 for the year.

The RPI (Retail Price Index) is used to calculate any increases to regulate fares. This is used by train operators throughout the UK. Most of the increased fares will mostly be seen in and around London, affecting standard class weekly season tickets and off-peak returns.

Recent reports from The Campaign for Better Transport have shown that this is the largest price hike in fares since 2013. Rail Delivery Group Chief Executive, Paul Plummer acting on behalf of the train operators and Network Rail insists that the increase in rail fares is needed, and states that commuters will benefit from better services and rail travel. Extra funds will be used to make much needed improvements to the railway. They are expecting to see a boost to the economy, while creating skilled jobs and more support available to communities across Britain.

Scottish commuters will also see a rise in their off-peak fares, although price hikes over the border will not be as high as those in England and Wales. This is due to the Government in Holyrood capping the Retail Price Index to minus 1%. Even so, travellers on the Glasgow to Inverness line will still see an off-peak return rise by £1.50 to £57.70.

Fares expert, Barry Doe has requested a complete change to the rail fare system, and recently stated in a newspaper article that the system in the UK currently “featherbeds” the season ticket holder, whilst other commuters who do not hold such tickets are penalised. For instance, a current ticket peak return to Stoke-on-Trent costs £282, compared to a weekly season ticket costing £386. Doe went on to openly criticise train operators and their ability to be able to increase ticket prices higher than inflation at any time. Doe wants to see a complete network conversion, with return fares to be abolished, and commuters only allowed to purchase single leg fares.

Do you want fries with that?

Customers at Cambridge and Crayford branches of McDonalds could be turned away at the door next week, following workers at both branches voting to strike over pay and working conditions. Should the impending industrial action take place, it will go down in history as the first staff strike in the UK for the fast food giants.

Staff at both branches want to see improvements in the working hours, and an increase to their hourly rate to £10.00 per hour. The Bakers, Food and Allied Workers Union (BRAWU) announced that a small number of workers will strike if their requirements are not met.

Following this announcement, McDonalds have retorted that as a company, they work hard to ensure that their teams are treated fairly. It was only in April this year that all McDonalds staff were offered choices between flexible or fixed contracts with minimum guaranteed hours.

A spokesperson for McDonalds also confirmed that it was less than 0.01% of their employees that followed the balloting process, and that only two of their restaurants would be affected by the strike. It seems that the terms of the ballot was based upon an internal grievance that had taken place.

Shadow Secretary for Business, Environment and Industrial Strategy, Rebecca Long-Bailey stated that the strike was motivated by employees joining forces to fight for their right for decent pay and better working conditions. McDonalds employs approximately 85,000 members of staff within the UK, and an estimated 1 million across the world.

On the road again

German automobile manufacturer Volkswagen has confirmed that an electric version of their classic Microbus Camper Van will be rolling out on their production lines in a bid to increase their presence within the electric vehicle market.

Following the vehicle showcase in Detroit and Geneva, Volkswagen received a substantial amount of interest from potential customers. It was not until now that Volkswagen has made the decision to produce the vehicle for motor industry customers.

It is proposed that the vehicle, known provisonally as the “ID Buzz”, will be available on sale in 2022 with a target market including North America, Europe and China. Volkswagen has also confirmed that a cargo version of the van will also be mass produced.

Elon Musk, the co-founder, CEO and Product Architect at Tesla, has proved that the electric automotive industry is showing to be an overwhelmingly competitive threat to large and long established vehicle manufacturers – especially the manufacturers of vehicles that are dependent on combustion engines. It is Volkswagens’ intention to have in excess of 30 all-electric vehicles on the production line by 2025.

Taking the biscuit

Nestlé have been accused for deliberately copying the 1970’s Atari’s classic video game Breakout in a bid to improve sales of KitKats. Court documents issued by Atari in San Francisco this month stated that Nestlé meaningfully used the Breakout game for an advertising campaign on national television and social media.

Breakout, created by Apple Founders Steve Wozniak and Steve Jobs influenced many generations of gamers. The game involves a paddle, a ball and coloured bricks. The aim of the game is to knock down the coloured bricks using the ball and paddle concurrently, moving the paddle from left to right at the bottom of the screen.

In the advertisement created by Nestlé, each of these blocks was replaced with a KitKat piece rather than a coloured block, with the title of “KitKat: Breakout” – Atari described these similarities in the court papers, and have argued that it was blatantly obvious that Nestle could not be blameless for Atari’s actions, due to the infringement of Atari’s intellectual property rights.

Atari are insistent that Nestlé went ahead with their advertising campaign using Breakout as their theme without Atari’s authorisation. It is believed that the case will not be subject what is known as a ‘good faith’ dispute. Atari have testified that Nestlé had no excuse for not approaching them, and took it upon themselves to adjust the classic gaming design and imagery for their own gains.

Up until recently, the game was still available on the Nestle Facebook and Twitter page adding further insult to injury. A spokesperson for Nestlé has said that they were aware of the pending lawsuit in the United States and Nestlé will be looking to provide a strong defence against all allegations made.

Nestlé remains upbeat on the matter, as the same marketing campaign was ran in 2016 in the UK. Currently, there are no further plans to repeat it. Atari will be seeking to sue Nestlé for for three times the profits made from the current marketing campaign, along with retaliatory compensation.

Business News (July 2017)

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