70 UK shopping centres at threat of permanent closure
Up to 70 shopping centres across the UK could be forced to close as the effects of the Covid-19 pandemic continue to manifest in the retail sector. Online shopping as well as the over-expansion of retail space has threatened 70 out of Britain’s 700 shopping centres. Many shopping centres built in the 1970s and 1980s will be at least partly redeveloped into homes, offices or for other uses. At least 30 shopping centres in the UK are now at least half empty including five with more than 80 per cent of their shops vacant following months of lockdowns, according to a Local Data Company (LDC) analysis of centres in England, Scotland and Wales. A further 34 have between 40 per cent and 50 per cent of their shops vacant, with at least 10 shops in them. “There’s no doubt that the Covid-19 pandemic has exacerbated many of the challenges we were seeing across the physical retail environment, with shopping centres having been particularly exposed to categories in decline, such as fashion and casual dining,” LDC commercial director Lucy Stainton said. Knight Frank head of retail research Stephen Springham said 10 per cent of shopping centres are no longer viable. He believes a further 20 per cent to 30 per cent – about 200 – will need a significant overhaul, with shops retained but parts of the centre converted to homes, offices or other uses. With potential tenants hard to come by, shopping centres already set for redevelopment are Nottingham’s Broadmarsh, where demolition starts this month, Stockton’s Castlegate, the Riverside centre in Shrewsbury, the Chilterns centre in High Wycombe, and Nicholsons in Maidenhead. Work has already begun to knock down south London’s Elephant & Castle centre.
Post Office launches campaign to stop cash disappearing from High Street
A campaign to stop cash disappearing from high streets and communities across the UK has been launched by the Post Office. The Save Our Cash campaign is calling for the UK Government to bring forward legislation to ensure access to cash becomes a legal right, with a requirement on banks to ensure continued local access for those who need it. The Post Office said that about eight million adults have said they would struggle day-to-day without cash, while 1.4 million people do not even have a bank account and rely exclusively on cash to survive. More than half (55 per cent) of cash-accepting small businesses deposit cash at least weekly and need somewhere convenient, reliable and secure to deposit their takings, it added. The Post Office highlighted research from Which? showing that 4188 bank branches have closed since the start of 2015. The government has already said it would legislate to protect the future of cash on high streets. The new Post Office campaign says there is an “urgent need” for legislation, to ensure that banks continue to ensure access to cash remains free at the point of service for both consumers and businesses. The campaign will ask people to write to their MP to call on government to bring forward legislation. The Post Office has an agreement with many UK banks, building societies and credit unions, to ensure people can access everyday banking services over its counters. However, the agreement is inherently fragile since it relies on the goodwill of each participating bank, the Post Office said. It believes banks should be under an obligation to ensure customers can continue to access their own accounts, free of charge, somewhere local to them. The Post Office added that high street banks should have a legal obligation to provide access to cash withdrawal services free at the point of service for both consumers and businesses who rely on cash for their everyday lives, covering both notes and coins. It also said an industry fund, administered centrally, should be set up to support the “levelling up” of solutions for communities without appropriate cash services. “Continued access to cash is not a luxury for millions of people and businesses across the country: it is an absolute necessity for their way of life,” Post Office chief executive Nick Read said. “For them cash provides safety, security and even survival, which is why legislation is now needed to place an obligation on the banks, whose own customers’ interests we are concerned with. “We firmly believe working in partnership with the banks is pivotal to building a secure and sustainable cash system and ensuring financial inclusion. “But the current cash infrastructure is fragile and we need the industry to fully commit to meeting its service obligations, supported by appropriate legislation that ultimately ensures we Save Our Cash.” A UK Finance spokesman said: “The banking and finance industry is committed to making sure there is access to cash for those who need it as we recognise that cash is still an important way to pay for many. “It is fantastic news that the government have moved swiftly to allow cashback without purchase which, alongside other initiatives, will help customers who might be less confident using other types of payments. “In addition, the independent Community Access to Cash Pilots have recently been launched which are supported by the major banks, consumer and SME groups, the Post Office, and Link. “The pilots are supporting eight communities across the UK to trial and test different ways to allow people access to cash and this work will ensure that access to cash needs are addressed both now and in the future.”
Ted Baker forecast to post £65m loss
Ted Baker is expected to tumble to a £65 million loss after sales were slashed by the Covid-19 pandemic. The enforced closure of non-essential shops and Ted Baker’s focus on occasion-wear and formal clothing had particular heavy toll on its trading last year. Analysts have forecast that the fashion retailer will unveil a £65.2 million operating loss for the year to January 30 when it updates the market on Thursday this week. Ted Baker’s trading update has itself been disrupted by Covid-19, having been delayed by two weeks from the original publish date on May 24. It said at the time that “disruption caused by Covid on the audit processes” meant it had to push back the announcement to June 10. However, it stressed last month that the update is expected to be “in line” with the expectations of industry analysts. A day after pushing back its results, Ted Baker announced that it secured an extension to its refinancing arrangements, including a £90 million credit facility. Liberum analyst Wayne Brown described the move as a “positive signal” that its lenders remain supportive despite the financial toll of the pandemic and resultant restrictions. The pandemic confounded a difficult period for the brand and retailer which has seen its share price plunge by more than 90 per cent over the past three years, despite a steady rise so far in 2021. Last year, Ted Baker cut around 950 jobs after retail sales nosedived following the impact of the pandemic. However, analysts have suggested that its restructuring efforts could place it in a strong position to rebound after heavily reducing its cost base. Hargreaves Lansdown equity analyst Laura Hoy said the performance of its online business would be “top of mind” for shareholders as they assess its recovery prospects. “The pandemic only accelerated a seismic shift toward online shopping, one that Ted was fairly unprepared for,” she said. “But the level of success of the newly launched digital platform will offer an insight into how turnaround efforts are doing. “We’d like to see online sales making up a reasonable chunk of sales, even as lockdowns unwind.” The analyst added that shareholders will expect the company to highlight a leaner inventory model after it was “bogged down” by unsold products and heavy discounting last year.
Tesco to end buying partnership with Carrefour
Tesco has said it will end its buying partnership with French supermarket giant Carrefour after three years. The UK’s biggest grocer told investors this morning that it would end the alliance – which was intending to improve product choice and lower prices – on December 31. The two retail giants said they would continue their efforts to improve purchasing deals “independently” and will focus on their own opportunities. In 2018, Tesco and Carrefour struck the deal in order to strengthen relationships with grocery suppliers, reduce prices through their greater collective buying power and expand their own-label ranges. “Over the last three years, Tesco and Carrefour have benefited from a number of joint buying opportunities across food and general merchandise categories, enabling access to new suppliers, new sources and new products,” they said in a joint statement. “Moving forward, both companies have agreed that they will continue this work independently and focus on their own opportunities, building on the experience and the progress made during the alliance period.” A Tesco spokesperson told The Guardian that the UK’s departure from EU did not influence the decision to end the partnership, especially in the wake of concerns about the rising cost of food imports due to Brexit. Shore Capital analyst Clive Black said the decision to end the partnership “does not come as a great surprise”. “For whatever reason, regulatory, cultural and operational, there would appear to be little notable benefit from the alliance on an ongoing basis,” he said. “Such a view does not come as a great surprise to us, having observed many attempts by major grocery chains to explore economies of scale through amalgamated buying. “In truth, the outcome is far from clear or impressive for major players; apart from bananas, it was not especially evident in food for Asda in the UK being part of Walmart, never mind other buying groups.”
Klarna expands BNPL service to all online stores
Klarna users can now purchase items from any online retailer regardless of whether they partner with the company and use its ‘buy now, pay later’ (BNPL) service.
The Swedish BNPL giant has launched its new ‘Shopping’ app in the UK through which users can shop with any of their “favourite retailers without having to leave the Klarna app”.
While Klarna currently boasts over 250,000 partnerships with major retailers including H&M, Ikea, Asos and Nike, until now customers have only been able to use its delayed payment service with participating companies.
Now shoppers can choose to use Klarna’s ‘Pay in 3’ service, allowing users to spread the cost of a purchase across three interest-free instalments, with any retailer through its app.
“Shoppers now can interact with their favourite retailers without having to leave the Klarna app, to create a smooth, safe and frictionless shopping experience,” Klarna chief executive Sebastian Siemiatkowski said.
“Our one stop shop app is the future of shopping, it creates a truly personalised and bespoke service for every user and liberates consumers from ever paying more than the price of the product.”
The new shopping feature, which has been available in the US, Australia and Sweden for some time, will also integrate monthly budgets and personal spending limit functionalities so users can remain in control of their spending.
Retail landlords call for flexibility over rent arrears
Landlords and tenants are reportedly calling for a six months timeframe to agree a plan for rent arrears to be paid back before entering into a binding arbitration. Landsec chief executive Mark Allan and British Land chief executive Simon Carter want landlords and occupiers to work “constructively together as economic partners to resolve this situation”. A ban on evictions and debt collection from commercial tenants is due to be lifted on June 30. Carter and Allan said that a solution to the commercial property moratoriums and accrued rent arrears is within reach, The Times reported. They call for tenants and landlords to be given six months to reach an agreement on how to resolve the £6 billion of arrears that have accrued since the moratorium was introduced in March last year. High street retailers, including H&M, JD Sports and Boots, took advantage of the policy to withhold rent. The BRC has warned that thousands of shops could close if property owners push tenants for unpaid rent. BRC chief executive Helen Dickinson said that it entered discussions with UK Hospitality and had talked to the government about the possibility of ring-fencing the historic debt relating to the periods of closure. “Rather than a blanket extension of the moratorium, we’re looking at the historic issues, keeping the protection in place over that historic rent, to give time for those discussions between the landlords and the tenants to resolve themselves over the coming months,” she said. In late May, the BRC said two-thirds of retailers face legal action once the rent moratorium ends in July, as the sector sits on £2.9 billion worth of unpaid rents. Last week, the Confederation of British Industry (CBI) called on the government to extend the moratorium on commercial evictions for businesses below 30 per cent of pre-pandemic levels. The lobby group said the government should let the commercial evictions ban expire on June 30. It also called to extend targeted support for businesses in sectors like hospitality and theatres until the end of the year. Landsec and British Land said that if agreements cannot be reached in six months’ time then both parties should enter into a binding arbitration.
Amazon, Shopify, Ebay, Etsy, PayPal all hit by global internet outages
Aldi unveils packaging made with recycled plastic bound for the ocean
Aldi is set to introduce new packaging that is made from recycled plastic that would’ve otherwise ended up in the ocean. To mark World Ocean Day today, the UK arm of the German discount grocer said it would roll out packaging made with Prevented Ocean Plastic across its entire range of own-label fishcakes and crispbakes. The packaging, produced by Sharpak, includes fully traceable and certified recycled waste plastic that has been collected by communities living in coastal areas across the globe at risk of ocean plastic pollution. Aldi said the change would prevent approximately 76 tonnes of plastic from entering the ocean each year – the equivalent of over three million plastic bottles bottles. The retailer also said the move would help support bottle collectors, collection centres and local recycling facilities. Aldi added that it “significantly” reduced the size of its fishcake packaging, which will see the removal of a further 32 tonnes of plastic annually, as well as 23 tonnes of cardboard from its Specially Selected lines. “These changes will see us use less packaging overall, and also repurpose plastic that could otherwise end up polluting our oceans,” Aldi UK plastics and packaging director Richard Gorman said. “This is the latest in a series of initiatives we are rolling out to reduce our environmental impact and offer our customers even more environmentally-sustainable options when they shop at Aldi.” Last year, Aldi pledged to halve the volume of plastic packaging it uses by 2025. This will see the supermarket chain remove 74,000 tonnes of plastic packaging from products over the next four years. Aldi said it was also on track to have all own-label products recyclable, reusable or compostable by 2022, and branded products sold at Aldi by 2025.
Aldi's protest against Tesco price match ad rejected by watchdog
Aldi’s complaint against Tesco’s ‘price match’ campaign has been dropped by the Advertising Standards Authority (ASA). The discount grocer complained about a Tesco press ad which appeared last July, as Tesco launched the campaign to compete with discounters. Aldi argued the ad was misleading because it did not explicitly set out whether the branded products shown had been priced matched against the same brands at Aldi. The German discounter argued consumers could be mistaken into thinking they could buy the branded products from Tesco at prices matched against Aldi own-label. However, the ASA considered the ad to have made clear the brands had been added to an existing campaign, while consumers would be aware Aldi sold both brands and own-label. It took into account smaller print saying “hundreds” of products had been compared with “comparable” ones. The watchdog decided consumers would understand Tesco’s price match claims did not apply to all of Aldi’s range. It also ruled that brands had been matched against the same product “or in rare circumstances, the nearest comparable product at Aldi if the branded product was not available”. “We did not consider that consumers would interpret the ad as suggesting that the branded items shown were being price matched with Aldi own-brand items nor that consumers would be able to obtain lots of ‘big brands’ at Aldi own-label prices,” the ASA said. “We considered that the ad made clear to consumers the price match was in relation to a selection of products rather than in relation to Aldi’s entire product range, and branded products would be matched with the same branded product where it was available at both stores. “We therefore concluded the ad was not likely to mislead.” Aldi said it was “disappointed” by the verdict. Tesco launched the campaign in March last year, while fellow Big 4 grocer Sainsbury’s also launched an Aldi Price Match campaign in February this year.
Zara owner Inditex sales smash £4bn
Zara owner Inditex has reported a strong quarterly sales growth thanks to a “digital and sustainable business model”. The fashion giant also said revenues have subsequently been ahead of pre-pandemic levels. Inditex’s sales climbed 50 per cent to €4.9 billion (£4.2 billion) in the first quarter to April 30. In the period to June 6, sales rose 102 per cent year on year and were up five per cent versus 2019. Online sales in local currencies climbed by 67 per cent over the quarter. Quarterly sales were higher across all geographies and all its brands, despite losing 24 per cent of trading hours due to Covid-19 lockdowns and related restrictions. At the end of the quarter, 16 per cent of the group’s stores were still closed and sales were 11.5 per cent down on 2019. Net profit was €421 million (£370 million) in the quarter, compared with a loss of €409 million (£351 million) in the comparable period last year. “Our differentiation and strategic transformation towards a fully integrated, digital and sustainable model continues to bear fruit supported by the commitment displayed by all the people who work at Inditex,” Inditex executive chair Pablo Isla said.
Pets at Home to become most responsible business with new strategy
Pets at Home has launched its second standalone Social Value Report, and the first since finalising its new social value strategy “Our Better World Pledge” in October last year. The report highlights the ways in which Pets at Home will achieve its goal of becoming the “most responsible pet care business in the world” by accelerating and focusing its efforts in the three areas: pets, people and planet.
Each of the three pillars are:
• Pets – To “positively impact” the life of every pet in the UK by 2030
• People – To “enhance the lives of one million people by 2030, through our shared love” of pets
• Planet – To become net zero by 2040
These goals are supported by 10 quantifiable targets that will drive the group’s performance forward over the next few years, along with 20 agreed actions. Pets at Home will add to these over time as the business develops further initiatives. The pet care retailer has also outlined a number of partnerships which will enable the business to “share knowledge, resources and experience”. These include a partnership with the Prince’s Trust to develop a work experience scheme for young people, signing up to the BRC’s Climate Action Roadmap, and developing a Pet Memory Scheme with The Woodland Trust. “The launch of our social value strategy marks a major milestone for our business,” Pets at Home chief executive Peter Pritchard said. “I am very proud of what we, as a group, have been able to achieve this past year but recognise the importance of strengthening our ambitions and outlining our goals so that we can work towards them together. “To be the best pet care business in the world, we must also be the most responsible one, and we embark on this new strategy with renewed focus on improving the lives of the nations’ pets, supporting people in our business and communities and helping to protect the planet.”
Tesco shop floor & warehouse staff given 2.7% pay rise
Tesco has announced a new pay deal for staff working on the shop floor and in customer fulfilment centres. The Big grocer confirmed a 2.7 per cent pay rise for staff paid hourly rates, taking their wage from £9.30 to £9.55 per hour. The new rates will come into effect from September 5 as part of a one-year deal. The deal will also see night premium payments for eligible staff rise 4.1 per cent from the current rate of £2.21 to £2.30. Tesco had consulted with union reps from Usdaw to develop the new pay packet. In its announcement today, the supermarket said its hourly rate has increased by 29.2% since July 2014. “We’re delighted we have been able to reach this agreement giving our colleagues a well-deserved pay increase,” Tesco UK chief executive Jason Tarry said. “Over the last year our colleagues have gone above and beyond to continue to serve our customers throughout the pandemic. “Together with our other colleague benefits, it makes our total reward package more competitive than ever before.” The announcement comes amid an ongoing legal battle regarding equal pay for Tesco shopworkers. Last week, the European Union Court of Justice ruled that pay conditions for Tesco shopworkers can be compared with those of distribution staff, in a blow to the Big 4 giant. The ruling means the grocery giant now faces the prospect of a £2.5 billion bill after the court ruled that EU rules guaranteeing equal pay for male and female workers can be invoked in the dispute over pay. Thousands of shopworkers, most of whom are women, have accused Tesco of paying them up to £3 less per hour than warehouse workers, who are mostly men. The court said the legal test for comparability was one of three tests involved in the case, which could still take years to conclude.
Amazon, Google, Apple, Facebook could end up paying millions less in tax under G7 proposals
Big Tech could pay less corporate tax under the new reforms agreed at the G7 according to think-tank TaxWatch.
TaxWatch believes that Amazon, Ebay, Facebook and Google would pay approximately £232.5 million less tax under G7 plans.
Over the weekend finance ministers from the UK, US and nations within the EU met in Cornwall to discuss new a global tax system which would ensure Big Tech could no longer exploit tax loopholes in the future.
“The historic global tax agreement backed by G7 finance ministers reforms the global tax system to make it fit for the global digital age, achieving a level playing field for all types of companies,” a UK Treasury spokesman told Yahoo Finance.
“The deal makes sure that the system is fair, so that the right companies pay the right tax in the right places.”
G7 finance ministers agreed a global minimum corporation tax rate of at least 15 per cent at the conference while also agreeing that countries should be able to tax the very largest corporations at 20 per cent of their profits above a 10 per cent margin.
According to the UK Treasury, the new deal would culminate in the largest multinational corporations paying more to the exchequer however this will mainly come from other large international companies instead of Big Tech.
TaxWatch has said that the deal will that the UK will suffer a net loss of tax from Big Tech like Facebook, Amazon, Ebay and Google.
The news comes as the Financial Times reported the UK’s chancellor Rishi Sunak is attempting to find a loophole by which would mean London is excluded in the G7 reforms in order to make the City more attractive for investors post Brexit.
Sunak is reportedly fronting a group of European leaders calling for an exemption for banks.
Banks already face large amount of regulations and are made to properly capitalise on their subsidiaries around the world, this means that banks face large tax burdens in every market they operate in already.
The UK Treasury declined to comment on reports that Sunak was pushing for the financial services loophole.
Card Factory swings to £14.6m loss after year of lockdowns
Card Factory has recorded losses of over £14 million in the year to January 31 after store closures during lockdowns decimated full-year sales. The gift and cards retailer suffered a statutory pre-tax loss of £14.6 million during the period, compared to a £65.2 million profit the previous year. On an underlying basis, Card Factory posted a pre-tax loss of £15.2 million, dropping from a £67.2 million profit the prior year. Underlying EBITDA dropped by 62.7 per cent to £47 million. Card Factory said total revenues dropped 36.9 per cent to £285.1 million during the year, while like for likes rose by a mere 0.1 per cent. Meanwhile, its online sales increased by a colossal 135.3 per cent during the pandemic. “Since joining Card Factory in March 2021, I’ve been immensely encouraged by what I have seen and heard,” Card Factory chief executive, Darcy Willson-Rymer said. “We have successfully reopened our entire store estate following the third lockdown and delivered a reassuring performance in stores, whilst maintaining online momentum. “Our powerful brand and unique business model means we are well placed to respond positively to the changing retail environment and to unlock the inherent potential in this business. “The recent refinancing provides sufficient resources for us to do that by building on our excellent platform to drive future growth. I am excited about the opportunities ahead.” Card Factory chairman, Paul Moody added: “2020 was an unprecedented year for all businesses. “For Card Factory in particular, key trading periods were significantly disrupted and a loss of over a third of the year’s revenue inevitably had a very material impact on our financial performance. “There were some challenging times for all, but I’m delighted at how the business and our colleagues navigated the consequences of the pandemic, which reflects on the robustness of the business. “Our colleagues responded with great resilience ensuring our customers still received great service. “We worked closely with our many stakeholders – suppliers, landlords, banking partners and the government – to ensure that Card Factory can now confidently start to look forward to the future. “I am certain that under Darcy’s leadership we will take Card Factory forward, building on the strong platform that is already in place and deliver for all our stakeholders.”
John Lewis Partnership offers 6 months equal paid parental leave in UK first
The John Lewis Partnership has announced the introduction of six months of equal parenthood paid leave for any staff member, in what is dubbed a UK retail first. The parent company of John Lewis and Waitrose also confirmed it would offer any staff member two weeks of paid leave if they experience the loss of a pregnancy. These commitments, alongside the start of a pilot programme to provide career help for young people leaving the care system, are part of a new package of support for staff across the partnership. Informed by feedback from staff, these commitments part of John Lewis Partnership’s ambitions to become the UK’s most inclusive business for both staff and customers. “Equality is a founding principle of the partnership, which was formed almost 100 years ago and supported through our unique employee-owned business structure and written constitution,” the retail giant said in a statement. “These new commitments are a stride forward in redefining our responsibility to this principle and what it means to our partners in today’s society.” The John Lewis Partnership said its equal parental pay and leave will be offered from this autumn, and staff who have been with the business for one year will become eligible for it regardless of how they became a parent. It will comprise of 26 weeks paid leave – 14 weeks at full contractual pay and 12 weeks at 50 per cent contractual pay. Meanwhile, any staff member who experiences the loss of a pregnancy will be entitled to take two weeks’ paid leave, and they will also have access to emotional support through the company’s free counselling and mental health services. The John Lewis Partnership also said that this month it would launch a pilot programme with Essex County Council to help young people aged 18-24 leaving the care system into employment. The retail giant said it would help identify job opportunities via its current job vacancies and provide support, such as coaching and mentoring and interview practice. It added that it would continue with ongoing coaching and mentoring once a role has been secured. The partnership also said that all job vacancies would now be advertised with a flexible working option, unless there is an operational reason why this is not possible, and that a “blended” working approach for office-based staff will begin this month. Regarding diversity and citing the work of its internal Black Partner Advisory Group over the last 12 months, John Lewis Partnership said it would now expand its reverse mentoring scheme, where ethnic minority staff from across the business mentor senior leaders. The retailer also said it would aim to cater for a broader range of customers by adding new products online and in stores, such as hosiery from Sheer Chemistry, clothing ranges with AAB and designer Kemi Telford, greeting cards by AfroTouch and new world foods. The John Lewis Partnership added that it was creating an Inclusion Committee, which will launch in summer and feature staff and external advisers who have strong diversity and inclusion experience. The committee will help accelerate and scrutinise the delivery of the partnership’s plans to be a more inclusive business that welcomes and celebrates diversity. “As an employee-owned business, equality matters to us,” John Lewis Partnership chair Dame Sharon White said. “We want John Lewis and Waitrose to be a place for everyone and for people from all walks of life to feel valued so they can thrive in our business. “We want to be there for our Partners to support them in important life moments, whether that’s stepping into the world of work for the first time, or becoming a parent.”
Asda sales surge as Walmart given nearly £3bn before Issa bro's takeover
Asda has revealed another lockdown-charged surge in sales over the past quarter as the grocer also confirmed that Walmart has taken almost £3 billion worth of dividends ahead of a change of hands. The UK’s third largest grocer is still awaiting approval from the CMA to complete its £6.6 billion takeover by the billionaire Issa brothers and private equity backers TDR Capital. The deal, which was first agreed in October, will see current owners – US retail giant Walmart – retain a minority stake. On Thursday, Asda filed its statutory results for 2020 which revealed that Walmart withdrew significant dividends during the year. The dividends include a payment of £1.65 billion in cash during the year, as well as a dividend in specie – a payment satisfied through assets – worth £1.29 billion. The confirmation came as Asda revealed a 7.3 per cent jump in like-for-like sales, excluding fuel, for the three months to the end of March. Asda’s outgoing chief executive Roger Burnley said demand was boosted by the closure of non-essential retailers during the third UK-wide lockdown over winter. The retailer said this helped to drive strong clothing and general merchandise sales, which increased by 31 per cent and 39 per cent respectively. It hailed “strong demand” for outdoor furniture, BBQs and garden accessories, as customers prepared to host friends and family outside. Asda said like-for-like food sales grew by 3.9 per cent as the closure of hospitality continued to drive strong grocery sales. Total digital sales were also up 88 per cent for the quarter after the retailer rapidly grew its capacity for home deliveries during the pandemic. “We showed huge resilience last year in unprecedented circumstances and carried this momentum through the first quarter with strong like-for-like sales growth in many key categories, especially clothing and general merchandise,” Burnley said. “Whilst the closure of non-essential retail during the first quarter helped stimulate demand, our constant focus on keeping prices low, providing great quality products and developing in-store partnerships with market leading consumer brands such as B&Q, The Entertainer and Greggs continues to resonate with customers.”
DFS buoyed by pent-up sofa demand as shops reopen
DFS has revealed that sofa orders surged after it saw pent-up demand released following the reopening of its stores in April. Shares in the furniture retailer surged 12.7 per cent earlier this morning after it hailed a 92.1 per cent jump in orders for the 10 weeks to date, compared with the same period in pre-Covid times in 2019. It said the strong reopening period came after a third quarter which saw online sales more than triple year-on-year as showrooms remained shut. DFS said revenues for the current financial year, which will finish this month, are 10.4 per cent higher for the past 49 weeks. It said it would therefore report underlying pre-tax profits of at least £105 million for the year, ahead of analyst forecasts. The retailer said it would also resurrect its dividend as a result of the strong performance and is recommending a payout of 7.5p per share in September. DFS said the sales rebound came despite significant disruption due to “supply chain challenges”, which included raw material shortages and shipping container delays following the blockage of the Suez Canal. “This performance once again reflects both the underlying resilience of the group and the tremendous support from our colleagues who have worked with huge dedication and commitment throughout the pandemic,” DFS group chief executive Tim Stacey said. “Looking ahead, we will continue to invest in key strategic initiatives such as our digital channels, our showrooms and our Sofa Delivery Company final mile logistics capability, along with new investment in UK manufacturing and capacity and expansion into other home categories. “Despite short-term supply chain challenges and a macro environment that’s hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner.”
Selfridges goes on sale for over £4bn
Selfridges may be sold for £4 billion or more after considering buyer interest following an unsolicited approach. The luxury department store is owned by the Weston family, who also control Primark, and have brought in advisers from Credit Suisse. The bid interest is likely to draw out other would-be buyers. An approach to buy Selfridges has been made, but a deal was not a foregone conclusion. Meanwhile, the Westons are likely to consider the extent to which any interested parties value sustainability as Selfridges has put sustainability at the heart of its strategy. Selfridges’ property assets alone are worth £2 billion. In its most recently reported financial year, Selfridges Group’s holding company SHEL Holdings said the pandemic “had a significant short-term impact on the group’s profitability” but it has “committed support from its ultimate parent company”.
Tesco to shutter international wholesale business
Tesco has reportedly revealed plans to axe its international wholesale business, which exports its own-brand range across the world. The Big 4 grocer will wind down its international export arm with the aim of shutting down the division completely by the middle of next year. Despite the business “performing well” last year, Tesco made the decision to shut it down after a “thorough consideration of its scale and the future growth potential”. A small number of staff are expected to be affected by the closure, but Tesco said it will redeploy those affected within the business, Retail Week reported. Meanwhile, Tesco denied that the decision to close the international wholesale arm was connected to the recent agreement to end its buying partnership with French supermarket giant Carrefour after three years. Tesco’s international export business has been in operation for about a decade and exports the retailer’s own-brand products to 20 partners in countries such as Australia, Saudi Arabia and in Europe. “This was a difficult decision to make, but we believe it’s the right one, and we are committed to supporting our partners through the transition period ahead,” Tesco chief product officer Ashwin Prasad said.
Russian discounter Mere to open over 300 UK stores
Russian discount chain Mere has plans to open over 300 stores in the UK within the next eight to 10 years. The retailer said it will undercut Lidl and Aldi by 20 per cent to 30 per cent and is set to scale its UK presence once processes have been established, The Grocer reported. The first four UK stores will open this year, in Preston, Castleford, Caldicot and Mold. The first, in Preston, is now set to open in mid-July, a date pushed back from June as Mere meets with suppliers and manufacturers. Mere is currently advertising for staff for both the Preston and Caldicot stores. Mere’s suppliers are required to deliver directly to stores, and pay only for stock that is sold. Food will be displayed on pallets in stores of about 10,000sq ft, including a walk-in chiller. Each will have a maximum of 1,200 SKUs across ambient, chilled and frozen, and eight staff, including about four cashiers and three handling deliveries. Mere’s parent company Torgservis was founded in 2009 in Krasnoyarsk, Siberia, by entrepreneur brothers Sergei and Andrei Schneider. In its UK growth plans, Mere will target any part of the country where it can lease sites meeting its requirements, including accessibility from major roads.