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Gas now a buck a litre across Canada on average

Written By doni icha on Minggu, 21 Desember 2014 | 22.40

For the first time in 4½ years the average cost of gasoline in Canada has dropped below $1 a litre.

The actual prices vary by market, from $1.05 in Vancouver to 76.9 cents in Edmonton to 98.9 cents in St. John's, according to the Gas Buddy website. But the average on Thursday was 99 cents a litre.

Gas price analyst Dan McTeague, founder of Gas Buddy and Tomorrowsgaspricetoday, believes that price will keep dropping into early 2015.

Oil prices have been dropping, from a high of $105 US a barrel in July to $56 US today, because of an oversupply of crude powered in part by the U.S. shale oil boom. In November, oil cartel OPEC decided not to cut back its production of 30 million barrels of oil per day, despite signs that world demand for oil is slowing amid an economic downturn.

Oil price war

McTeague believes OPEC and U.S. producers are grandstanding in an effort to keep their market share.

"The end is not in sight. OPEC believes that the American producers will somehow turn the tap off at $50-$60 a barrel – we're already near that level," he told CBC News.

"Reports this morning from the largest oil producer in the U.S., Exxon, says they can drive prices down to $20 if they have to. So this war to the death is not over," he added.

Oil prices bounced a little higher today, up $2.41 to $56.52 for the West Texas Intermediate contract in New York.

Although it takes time for lower oil prices to result in lower prices at the pump, that means gas prices could keep falling into January and February.

"It absolutely means that consumers can expect that in the New Year these prices will go lower unless there is some disruption or someone decides to call it a day," McTeague said.

Money in your pocket

The difference in gasoline prices across Canada are caused by differences in the tax regime in each province.

Just a few months ago, Canadians were paying an average of $1.30 to $1.35 a litre for gas. That's a significant savings.

"If you think about a consumer of gas using an average 80 litres a week, you're saving about $30 a week plus," McTeague says.

The result could be both a decline in the cost of living in Canada as lower fuel costs are reflected in the price of goods and a burst of new consumer spending.

"The collective effect of prices being this low – the average Canadian family could see savings of between $1,500 and $2,000 a year," he said.

"I think it's going to stimulate obviously significant retail activity," he added.

So while Canada's economy could be hurt by falling exports and reductions in the energy sector, there is a chance that consumers will help boost GDP with additional spending.


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'Tis the season: U.K. holiday ads capture nation's imagination

In recent years, the holiday season in the U.K. has seen people across the country paying more attention to their television screens than usual — not so much for their favourite shows or festive films but, rather, for the holiday commercials from Britain's largest retailers that flood the airwaves.

For many, the commercials' annual debuts mark the start of the holiday season. 

"The ads are becoming more and more embedded in the culture of Christmas in the U.K.," said Helen Powell, an advertising professor at the University of East London. "We wait and we wonder what they're going to be. People anticipate them like they would the next big film."

Many of those who don't catch the ads on TV find and watch them online. The number of YouTube views the ads rack up is staggering, as is the torrent of tweets they generate.

Countless newspaper inches in the UK's most respected newspapers are devoted to in-depth reviews of the commercials, the kind more often reserved for blockbuster movies. 

Perhaps that's not a surprise, though, given that the ads themselves sometimes pack major star power. Last year, one department store ad featured two supermodels, Rosie Huntingdon-Whiteley and David Gandy, along with Oscar-nominated actress Helena Bonham-Carter. 

Tugging at heart strings 

One of this year's most-talked about ads comes from John Lewis, a popular department store. It spent a whopping $12.6 million on the marketing campaign. The centrepiece is a commercial which took nine months to produce and featured computer-generated animation done by the same production house that worked on the movie Planet of the Apes

John Lewis 2014 Christmas Advertisement featuring Monty the penguin

(Watch the video)

It tells the story of a little boy named Sam and his best friend, Monty the penguin.The pair spend the two-minute ad playing together in heart-wrenchingly cute scenes straight out of the most picture-perfect childhood, but when Sam notices that Monty isn't completely happy without a female companion, he decides to find his animal sidekick one for Christmas. The surprise ending is designed to make even the most cynical viewers say, "Aww!" 

The commercial had its very own trailer that ran during ad breaks a week before the full ad was released. There's also a "making of" documentary which has been viewed online more than 100,000 times. 

Grocery chain Sainsbury's also went for emotional impact by running a commercial based on the December 1914 Christmas Truce between German and British soldiers fighting on the front lines of Belgium during World War One. 

Sainsbury's 2014 Christmas Truce commercial

(Watch the video)

It starts by showing the soldiers huddled in their respective trenches, both sides singing stirring renditions of the hymn Silent Night. After their voices blend together over No Man's Land, the soldiers begin to emerge, meeting in the middle for a joyful game of soccer and touching moments of friendship.

When they hear the sound of a battle raging in the distance, they begin a hurried return to their trenches - but not before a British soldier covertly puts a chocolate bar in the coat pocket of his new German friend. Upon finding the chocolate after getting back to his dug-out, the German soldier smiles to himself, visibly touched. 

Sainsbury's won't say how much the commercial cost to make. It has 14.9 million YouTube views and counting. 

Owning the 'meaning of Christmas' 

Both of the commercials follow what has become the cardinal rule of Britain's Christmas advertising extravaganza—that is, using emotive stories to tug at viewers' heart strings rather than promoting particular products.  

'If you have a really good ad that touches people's hearts, people are going to seek it out, talk about it, look at it online and read about it in the press.'- Helen Powell, advertising professor

According to Powell, it's a strategic decision retailers make to try to "own the meaning of Christmas" in the eyes of the public. 

"If you have a really good ad that touches people's hearts, people are going to seek it out, talk about it, look at it online and read about it in the press. So in terms of added value that has for the brand, it's much more significant than simply advertising traditional Christmas fare in the way it's been done in the past," said Powell.

John Lewis Monty product range

John Lewis has developed a line of merchandise based on Monty the Penguin. Plush versions of the penguin sold out shortly after the Christmas commercial was released. (John Lewis )

Still, there is some direct marketing involved. For example, after its ad debuted, John Lewis began selling plush versions of Monty for about $170. Despite the steep asking price, they sold out online within hours.

The penguin and his girlfriend Mabel are also featured on everything from cufflinks and umbrellas to bedding and wall murals. There's even a book called Monty's Christmas

For its part, Sainsbury's is selling the same type of chocolate bar given to the German soldier, with all proceeds going to the British Legion. 

A trend not going away anytime soon 

Sainsbury's chocolate bar

Sainsbury's is selling the chocolate bar featured in its Christmas ad for $1.80, with all proceeds going to the British Legion. (Sainsbury's )

This current cinematic trend in British Christmas advertising — with its epic tales, big budgets, high production values and star power — began about five years ago, according to Powell, at the height of the global economic downturn. Back then, it was aimed at spurring an ailing economy by lifting the nation's spirits as the biggest shopping season of the year approached. 

Now that these kind of ads have become a sort of national institution, the brands are more driven by competition between each other to have the best, most talked-about holiday commercial. It's a trend unlikely to go away anytime soon, Powell said. 

"This seasonal moment is really where your future success is determined," said Powell. "Ultimately, it's about keeping your brand in mind, placing it within the public consciousness. No brand in Britain can rest on its laurels … especially at the time of the year." 


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House prices inch up, oil slides more & BlackBerry's throwback: BUSINESS WEEK WRAP

There were more signs this week of high prices prices in Canadian housing, and that has some experts worried.

The Canadian Real Estate Association put out numbers this week showing the average Canadian home is now worth more than $413,000. That's the latest record, and up six per cent in the past year.

The realtor group singled out two cities, as usual, for skewing the price higher: Toronto and Vancouver. If those two booming markets are stripped out, the average price for the rest of the country drops by almost $100,000.

But there's a new city on the agency's radar, as CREA says Calgary's market could be one to watch as the impact of plunging oil prices could take a bite out of some frothy valuations.

"The effect of lower oil prices on Canada's housing markets is something of a wild card," CREA's chief economist told us this week.

Oil keeps sliding

Fort mcmurray welder manufacturing jobs job employment

A welder works on a pipe in Fort McMurray. The oil boom has created jobs in many industries in Canada but that may change with the age of cheap oil here, CIBC warned this week. (Norm Betts/Bloomberg)

Indeed, housing isn't the only part of Canada's economy that's vulnerable to the plunging oil price. One of Canada's biggest banks pointed out this week that oil prices being off by about 50 per cent is going to have an impact across the country, in very uneven ways.

Yes, Alberta is going to pay dearly in the short term. But other governments are also going to suffer. The bright side, meanwhile, is that places not so oil-reliant (think: Ontario) could be poised for growth. Whether it's enough to offset weakness in Alberta remains to be seen, but at the very least, the bank points out that cheap oil isn't quite so cut and dried. "Because we're an oil exporter, the easy answer is, it's a net negative," is how Avery Shenfeld described it in an interview with Amanda Lang this week. 

Outside of that, cheap crude is likely to drag the loonie lower, to something around the 81 cent level as a floor, the bank said. But a big risk, the bank warns, is that Ottawa might suddenly find itself with billions less to play with. 

BlackBerry goes back to basics

BlackBerry hoped this week that a blast from the past might be enough to bring some of its core users backs. The Waterloo-based company unveiled a new device this week, called the Classic and the name seems apt — it looks like a modern version of the classic BlackBerry that won loyal fans all those years ago.

The phone is based on the Bold, but with a host of updated technology to keep up with modern smartphone demands.

The early returns are mixed, but some analysts say getting back to its roots may be part of what the company needs to help its turnaround take shape.

"It's going to be another year of transition, but they are taking the right steps. Let's see how the market responds," one analyst told us this week.

Other stuff

Those were just some of the biggest stories we reported on this week. Be sure to check back with our website often for more, and remember to follow us on Twitter here.

In the meantime, here's a list of some of our most read stories this week:

Monday

Tuesday

Wednesday;

Thursday

Friday


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Canadian Grain Commission chief defends quality of Canadian wheat exports

The chief commissioner of the Canadian Grain Commission says there's no evidence that the quality of Canadian wheat exports has decreased since the dismantling of the Canadian Wheat Board's marketing monopoly in 2012.

Earlier this month, Reuters reported that international buyers had experienced problems ever since the Harper government introduced what it called "marketing freedom" for wheat and barley.

In addition to allowing farmers to sell their crop however they want, other changes rolled out for the grain industry in 2012 affected how the crop is inspected and handled on its way to market.

In an interview with CBC News, Elwin Hermanson said Canada has the best crop inspectors in the world.

"Over the last three years the number of cargo complaints has decreased," he said, adding that none of the complaints received were found to be justified. "That's because we do a good job."

So what happened? Hermanson admits there may be a difference between a formal complaint filed with and investigated by his agency, and informal grumbling among industry players. 

"Lots of things can happen after loading a vessel," he said, pointing out some things are beyond Canadian inspectors' control. "If you talk to our customers, they'll say Canada is among the best if not the best at... quality assurance."

Losing market share?

Reuters suggested the quality assurance problems threatened Canada's market share of global wheat exports, currently at about 14 per cent compared to over 20 per cent in the early nineties.

"Canadian farmers are growing other crops. That's why the share is down," he said, describing a decrease in Canada's dependence on wheat.

"Diversification is a good thing. It gives producers more marketing options. They have to decide what to grow."

​Hermanson is a former Reform MP and leader of the provincial Saskatchewan party. In 2008, Agriculture Minister Gerry Ritz appointed him to lead the grain commission, the government agency responsible for inspection and crop quality under the Canada Grains Act.

Changes he oversaw in 2012 increased the user fees for crop testing — fees that had been frozen since 1991, resulting in taxpayers footing half the bill for grain companies' samples.

The CGC also ended "inward inspection" for grain, when a crop was weighed and graded when first delivered to a grain terminal.

These services amounted to a government subsidy to grain companies, Hermanson said.

The $20 million in "unnecessary costs" were ultimately borne by farmers, the Harper government's press release said at the time.

"Outward inspection [before export] ... is what matters to the brand," Hermanson said. "That's what we can't leave up to companies."

While the end of inward inspection services meant a reduction in the commission's workforce, outward inspection "hasn't been touched," he said.

Commission inspectors never missed a shift despite all of last year's shipping problems and unpredictable delays, he said.

Brand challenges?

Reuters talked to a European grain trader who said that buying Canadian wheat was less complicated under the monopoly system.

But Hermanson said the impact of the former Canadian Wheat Board was overstated when it comes to Canada's international reputation. Quality issues aren't about who is marketing the crop.

"The Canadian Wheat Board was not responsible for the brand [quality], the Canadian Grain Commission was," he said.

The wheat board was the marketing "mouthpiece," but it could say how great it was because of the commission's work, he said.

"A new voice needs to be found," he says, now that Canadian wheat is marketed by multinational corporations, not one central organization. His organization is working on that.

The industry "can learn from what happened in the past," Helmanson said, as it continues to adapt to an open market.

2014 quality varies

The 2013 crop year was full of challenges. Transportation backlogs and other market access issues hurt farmers' bottom line despite an otherwise bumper crop.

Environmental factors — or put simply, the weather — have hurt the gluten strength and protein levels in recent years, but those were better in 2014, he said.

This year's crop has "quite a variance in quality," presenting challenges for inspectors and marketers. He'll be relieved when it's all moved through the system, he said.

Some of the confusion among customers abroad is being resolved with better communication, he said.

"We can't control the weather, we can't control exchange rates," he said. "But what we can control, we can do better."

"There will always be challenges," he says. "That's what makes this industry so interesting and exciting."


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Sony Pictures hacking: Obama to wait, 'review the findings' on North Korea

The United States is reviewing whether to put North Korea back onto its list of state sponsors of terrorism, President Barack Obama said as the U.S. decides how to respond to the cyberattack on Sony Pictures Entertainment that law enforcement has blamed on the communist nation.

Obama described the hacking case as a "very costly, very expensive" example of cybervandalism, but did not call it an act of war. In trying to fashion a proportionate response, the president said the U.S. would examine the facts to determine whether North Korea should find itself back on the terrorism sponsors list.

"We're going to review those through a process that's already in place," Obama told CNN's State of the Union in an interview to air Sunday. "I'll wait to review what the findings are."

North Korea spent two decades on the list until the Bush administration removed it in 2008 during nuclear negotiations. Some lawmakers have called for the designation to be restored following the hack that led Sony to cancel the release of a big-budget film that North Korea found offensive.

Only Iran, Sudan, Syria and Cuba remain on the list, which triggers sanctions that limit U.S. aid, defence exports and certain financial transactions.

But adding North Korea back could be difficult. To meet the criteria, the U.S. State Department must determine that a country has repeatedly supported acts of international terrorism, a definition that traditionally has referred to violent, physical attacks rather than hacking.

Obama also levelled fresh criticism against Sony over its decision to shelve "The Interview," despite the company's insistence that its hand was forced after movie theatres refused to show it.

While professing sympathy for Sony's situation, Obama suggested he might have been able to help address the problem if given the chance.

"You know, had they talked to me directly about this decision, I might have called the movie theatre chains and distributors and asked them what that story was," Obama said.

Sony's CEO has disputed that the company never reached out, saying he spoke to a senior White House adviser about the situation before Sony announced the decision. White House officials said Sony did discuss cybersecurity with the federal government, but that the White House was never consulted on the decision not to distribute the film.

"Sometimes this is a matter of setting a tone and being very clear that we're not going to be intimidated by some, you know, cyberhackers," Obama said. "And I expect all of us to remember that and operate on that basis going forward."

North Korea has denied hacking the studio, and on Saturday proposed a joint investigation with the U.S. to determine the true culprit. The White House rejected the idea and said it was confident North Korea was responsible.

But the next decision — how to respond — is hanging over the president as he vacations with his family in Hawaii.

Obama's options are limited. The U.S. already has trade penalties in place and there is no appetite for military action.


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House prices inch up, oil slides more & BlackBerry's throwback: BUSINESS WEEK WRAP

Written By doni icha on Sabtu, 20 Desember 2014 | 22.40

There were more signs this week of high prices prices in Canadian housing, and that has some experts worried.

The Canadian Real Estate Association put out numbers this week showing the average Canadian home is now worth more than $413,000. That's the latest record, and up six per cent in the past year.

The realtor group singled out two cities, as usual, for skewing the price higher: Toronto and Vancouver. If those two booming markets are stripped out, the average price for the rest of the country drops by almost $100,000.

But there's a new city on the agency's radar, as CREA says Calgary's market could be one to watch as the impact of plunging oil prices could take a bite out of some frothy valuations.

"The effect of lower oil prices on Canada's housing markets is something of a wild card," CREA's chief economist told us this week.

Oil keeps sliding

Fort mcmurray welder manufacturing jobs job employment

A welder works on a pipe in Fort McMurray. The oil boom has created jobs in many industries in Canada but that may change with the age of cheap oil here, CIBC warned this week. (Norm Betts/Bloomberg)

Indeed, housing isn't the only part of Canada's economy that's vulnerable to the plunging oil price. One of Canada's biggest banks pointed out this week that oil prices being off by about 50 per cent is going to have an impact across the country, in very uneven ways.

Yes, Alberta is going to pay dearly in the short term. But other governments are also going to suffer. The bright side, meanwhile, is that places not so oil-reliant (think: Ontario) could be poised for growth. Whether it's enough to offset weakness in Alberta remains to be seen, but at the very least, the bank points out that cheap oil isn't quite so cut and dried. "Because we're an oil exporter, the easy answer is, it's a net negative," is how Avery Shenfeld described it in an interview with Amanda Lang this week. 

Outside of that, cheap crude is likely to drag the loonie lower, to something around the 81 cent level as a floor, the bank said. But a big risk, the bank warns, is that Ottawa might suddenly find itself with billions less to play with. 

BlackBerry goes back to basics

BlackBerry hoped this week that a blast from the past might be enough to bring some of its core users backs. The Waterloo-based company unveiled a new device this week, called the Classic and the name seems apt — it looks like a modern version of the classic BlackBerry that won loyal fans all those years ago.

The phone is based on the Bold, but with a host of updated technology to keep up with modern smartphone demands.

The early returns are mixed, but some analysts say getting back to its roots may be part of what the company needs to help its turnaround take shape.

"It's going to be another year of transition, but they are taking the right steps. Let's see how the market responds," one analyst told us this week.

Other stuff

Those were just some of the biggest stories we reported on this week. Be sure to check back with our website often for more, and remember to follow us on Twitter here.

In the meantime, here's a list of some of our most read stories this week:

Monday

Tuesday

Wednesday;

Thursday

Friday


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BlackBerry's loss shrank in 3rd quarter — but so did sales

BlackBerry narrowed its net loss to $148 million US in its third quarter and did better with adjusted earnings than expected, but ultimately missed expectations with lower revenue on fewer smartphone sales.

Early Friday, the Waterloo, Ont.-based company's posted a net loss equivalent to 28 cents per share, compared with a loss of $207 million or 39 cents per share in the same period a year ago.

All figures are in U.S. dollars, the currency the company reports its accounting in.

On an adjusted basis, BlackBerry delivered a profit of one cent per share. That's better than the small loss of two or three cents per share that analysts were expecting.

Despite some small wins, overall investors didn't welcome the numbers, as the stock lost about six per cent in premarket trading on Friday. The shares closed at just over $10 in New York on Thursday, while buy and sell orders were coming in around the $9.40 per share level early Friday.

The focus was on the top-line drop in revenue, as the company struggled to sell more of its core product: smartphones.

Revenue was $793 million versus analyst predictions of $931 million, and down compared to a year earlier, when revenue was $1.19 billion.

BlackBerry sold 1.9 million smartphones in the quarter, falling short of the 2.1 million sold in the previous quarter this year.

BlackBerry CEO John Chen has been working to turn around the company's money-losing operations, and earlier this week launched the Classic, a throwback to its popular older smartphone models, but with an updated design and features.

Chen said Wednesday that the new phone is meant to appeal to loyal business customers.

"A lot of them pulled out their BlackBerry and told me, 'Don't mess around with this thing. Don't mess around with the keyboard, don't mess around with the trackpad,"' Chen said.


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Inflation rate cools to 2% on cheaper gasoline

hl-gas-pump

Gasoline prices declined in November, to their lowest level since early 2011. (CBC)

Canada's inflation rate cooled to two per cent in November, down from 2.4 per cent the previous month mainly due to a sharp decline in gasoline prices.

Statistics Canada said Friday that gasoline prices declined almost six per cent last month, down to their lowest level since February 2011 and enough to drag the overall inflation rate lower.

The transportation index declined by 0.2 per cent in the past year, the only subindex that declined.

Economists had been expecting the inflation rate to stay at 2.4 per cent during the month on the assumption that price increases in other areas would have been enough to offset cheaper energy. But that didn't happen.

Aside from gasoline, some of the major contributors to price decreases were travel tours at 10 per cent, video equipment at 9.3 per cent, digital computing equipment and devices at 4.2 per cent.

Regionally,prices rose at slower year-over-year rates in nine provinces in November compared with October, the data agency said. Inflation slowed the most in Newfoundland and Labrador and Prince Edward Island, followed by Alberta. British Columbia was the only province where prices increased at a faster year-over-year rate in November than in October.


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Gas now a buck a litre across Canada on average

For the first time in 4½ years the average cost of gasoline in Canada has dropped below $1 a litre.

The actual prices vary by market, from $1.05 in Vancouver to 76.9 cents in Edmonton to 98.9 cents in St. John's, according to the Gas Buddy website. But the average on Thursday was 99 cents a litre.

Gas price analyst Dan McTeague, founder of Gas Buddy and Tomorrowsgaspricetoday, believes that price will keep dropping into early 2015.

Oil prices have been dropping, from a high of $105 US a barrel in July to $56 US today, because of an oversupply of crude powered in part by the U.S. shale oil boom. In November, oil cartel OPEC decided not to cut back its production of 30 million barrels of oil per day, despite signs that world demand for oil is slowing amid an economic downturn.

Oil price war

McTeague believes OPEC and U.S. producers are grandstanding in an effort to keep their market share.

"The end is not in sight. OPEC believes that the American producers will somehow turn the tap off at $50-$60 a barrel – we're already near that level," he told CBC News.

"Reports this morning from the largest oil producer in the U.S., Exxon, says they can drive prices down to $20 if they have to. So this war to the death is not over," he added.

Oil prices bounced a little higher today, up $2.41 to $56.52 for the West Texas Intermediate contract in New York.

Although it takes time for lower oil prices to result in lower prices at the pump, that means gas prices could keep falling into January and February.

"It absolutely means that consumers can expect that in the New Year these prices will go lower unless there is some disruption or someone decides to call it a day," McTeague said.

Money in your pocket

The difference in gasoline prices across Canada are caused by differences in the tax regime in each province.

Just a few months ago, Canadians were paying an average of $1.30 to $1.35 a litre for gas. That's a significant savings.

"If you think about a consumer of gas using an average 80 litres a week, you're saving about $30 a week plus," McTeague says.

The result could be both a decline in the cost of living in Canada as lower fuel costs are reflected in the price of goods and a burst of new consumer spending.

"The collective effect of prices being this low – the average Canadian family could see savings of between $1,500 and $2,000 a year," he said.

"I think it's going to stimulate obviously significant retail activity," he added.

So while Canada's economy could be hurt by falling exports and reductions in the energy sector, there is a chance that consumers will help boost GDP with additional spending.


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British holiday advertising packs star power, emotional punch

In recent years, the holiday season in the U.K. has seen people across the country paying more attention to their television screens than usual — not so much for their favourite shows or festive films but, rather, for the holiday commercials from Britain's largest retailers that flood the airwaves.

For many, the commercials' annual debuts mark the start of the holiday season. 

"The ads are becoming more and more embedded in the culture of Christmas in the U.K.," said Helen Powell, an advertising professor at the University of East London. "We wait and we wonder what they're going to be. People anticipate them like they would the next big film."

Many of those who don't catch the ads on TV find and watch them online. The number of YouTube views the ads rack up is staggering, as is the torrent of tweets they generate.

Countless newspaper inches in the UK's most respected newspapers are devoted to in-depth reviews of the commercials, the kind more often reserved for blockbuster movies. 

Perhaps that's not a surprise, though, given that the ads themselves sometimes pack major star power. Last year, one department store ad featured two supermodels, Rosie Huntingdon-Whiteley and David Gandy, along with Oscar-nominated actress Helena Bonham-Carter. 

Tugging at heart strings 

One of this year's most-talked about ads comes from John Lewis, a popular department store. It spent a whopping $12.6 million on the marketing campaign. The centrepiece is a commercial which took nine months to produce and featured computer-generated animation done by the same production house that worked on the movie Planet of the Apes

John Lewis 2014 Christmas Advertisement featuring Monty the penguin

(Watch the video)

It tells the story of a little boy named Sam and his best friend, Monty the penguin.The pair spend the two-minute ad playing together in heart-wrenchingly cute scenes straight out of the most picture-perfect childhood, but when Sam notices that Monty isn't completely happy without a female companion, he decides to find his animal sidekick one for Christmas. The surprise ending is designed to make even the most cynical viewers say, "Aww!" 

The commercial had its very own trailer that ran during ad breaks a week before the full ad was released. There's also a "making of" documentary which has been viewed online more than 100,000 times. 

Grocery chain Sainsbury's also went for emotional impact by running a commercial based on the December 1914 Christmas Truce between German and British soldiers fighting on the front lines of Belgium during World War One. 

Sainsbury's 2014 Christmas Truce commercial

(Watch the video)

It starts by showing the soldiers huddled in their respective trenches, both sides singing stirring renditions of the hymn Silent Night. After their voices blend together over No Man's Land, the soldiers begin to emerge, meeting in the middle for a joyful game of soccer and touching moments of friendship.

When they hear the sound of a battle raging in the distance, they begin a hurried return to their trenches - but not before a British soldier covertly puts a chocolate bar in the coat pocket of his new German friend. Upon finding the chocolate after getting back to his dug-out, the German soldier smiles to himself, visibly touched. 

Sainsbury's won't say how much the commercial cost to make. It has 14.9 million YouTube views and counting. 

Owning the 'meaning of Christmas' 

Both of the commercials follow what has become the cardinal rule of Britain's Christmas advertising extravaganza—that is, using emotive stories to tug at viewers' heart strings rather than promoting particular products.  

'If you have a really good ad that touches people's hearts, people are going to seek it out, talk about it, look at it online and read about it in the press.'- Helen Powell, advertising professor

According to Powell, it's a strategic decision retailers make to try to "own the meaning of Christmas" in the eyes of the public. 

"If you have a really good ad that touches people's hearts, people are going to seek it out, talk about it, look at it online and read about it in the press. So in terms of added value that has for the brand, it's much more significant than simply advertising traditional Christmas fare in the way it's been done in the past," said Powell.

John Lewis Monty product range

John Lewis has developed a line of merchandise based on Monty the Penguin. Plush versions of the penguin sold out shortly after the Christmas commercial was released. (John Lewis )

Still, there is some direct marketing involved. For example, after its ad debuted, John Lewis began selling plush versions of Monty for about $170. Despite the steep asking price, they sold out online within hours.

The penguin and his girlfriend Mabel are also featured on everything from cufflinks and umbrellas to bedding and wall murals. There's even a book called Monty's Christmas

For its part, Sainsbury's is selling the same type of chocolate bar given to the German soldier, with all proceeds going to the British Legion. 

A trend not going away anytime soon 

Sainsbury's chocolate bar

Sainsbury's is selling the chocolate bar featured in its Christmas ad for $1.80, with all proceeds going to the British Legion. (Sainsbury's )

This current cinematic trend in British Christmas advertising — with its epic tales, big budgets, high production values and star power — began about five years ago, according to Powell, at the height of the global economic downturn. Back then, it was aimed at spurring an ailing economy by lifting the nation's spirits as the biggest shopping season of the year approached. 

Now that these kind of ads have become a sort of national institution, the brands are more driven by competition between each other to have the best, most talked-about holiday commercial. It's a trend unlikely to go away anytime soon, Powell said. 

"This seasonal moment is really where your future success is determined," said Powell. "Ultimately, it's about keeping your brand in mind, placing it within the public consciousness. No brand in Britain can rest on its laurels … especially at the time of the year." 


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