(qlmbusinessnews.com via uk.reuters.com — Tue, 13th Aug 2019) London, UK —
LONDON (Reuters) – More than 50 British retailers, including Sainsbury’s (SBRY.L), Marks & Spencer (MKS.L), Asda (WMT.N) and Morrisons (MRW.L) have urged the government to freeze business rates to help out the struggling sector.
In a letter to the new finance minister Sajid Javid, published on Tuesday, the retailers called on the government to take action to “fix the broken business rates system”.
Business rates are taxes to help pay for local services, charged on most commercial properties, including shops, warehouses, pubs, cafes and restaurants. They are currently calculated according to the rental value of properties and have an annual inflationary uplift or multiplier.
The letter asks for a freeze in the business rates multiplier to stop another tax rise.
The retailers’ letter was coordinated by lobby group, the British Retail Consortium (BRC), which has for years complained the current system is unfair.
It points out that the industry is the largest private sector employer in Britain, employing about three million people. While it accounts for 5% of the UK economy, it is burdened with 10% of all business taxes, and 25% of business rates.
“This disparity is damaging our high streets and harming the communities they support,” said BRC chief executive Helen Dickinson.
The letter comes a day after BRC-Springboard data showed 10.3% of shops in Britain were vacant, the highest rate in four years, adding to the growing gloom in the sector.
Another survey from the BRC published earlier this month showed British retailers reported the weakest July sales growth since records began.
Last month new prime minister Boris Johnson announced a 3.6 billion pound fund to support town centres.
Javid is due to set out his spending for the 2020-21 financial year next month.
(qlmbusinessnews.com via theguardian.com – – Tue, 13th Aug 2019) London, Uk – –
Exclusive: Industry sources say system operator aware of growing potential of blackouts ‘for years’
What are the questions are raised by the UK’s recent blackout?
National Grid had experienced three blackout “near-misses” in as many months before Friday’s major outage left almost a million homes in the dark and forced trains to a standstill around the UK.
The system operator, already under investigation by the energy watchdog, faces criticism from within the industry that it has not done enough to guard against the risk of blackouts.
National Grid blamed the “incredibly rare” nationwide power cut on a severe slump in the grid’s frequency – a measure of energy intensity – following the unexpected shutdown of two power generators.
It will face an investigation into its handling of the energy system after the first blackout in more than a decade following the shutdown of a gas-fired power plant in Bedfordshire and the Hornsea windfarm in the North Sea at about 5pm of Friday.
It said it would work with the regulator and energy companies to “understand the lessons learned” after two power plants shut down unexpectedly within minutes of each other, causing severe rush hour travel disruption across the country.
But industry sources claim National Grid has been aware of the growing potential for a wide-scale blackout “for years”, and has suffered a spate of near-misses in recent weeks.
The Guardian understands that in every month since May there has been a severe dip in the grid’s frequency from its normal range around 50Hz. Industry sources have confirmed that the grid’s frequency has fallen below 49.6Hz on three different occasions in recent months, the deepest falls seen on the UK grid since 2015. On Friday the blackout was triggered when the frequency slumped to 48.88Hz.
In June, the frequency of the grid plummeted to within a whisker of National Grid’s legal limit of 49.5Hz after all three units of EDF Energy’s West Burton gas-fired power plant in Nottinghamshire tripped offline without warning.
The unexpected outage triggered an emergency call for backup electricity supplies which stabilised the energy grid’s frequency before a blackout was triggered.
In addition, the grid’s frequency fell to 49.55Hz on 9 May, and 49.58Hz of 11 July.
A spokesman for National Grid said these events were “independent”. He added that there was “no trend or prediction of more frequency excursions”.
“Over the past four years frequency has regularly fluctuated between the agreed limits, as part of the normal day-to-day operation of the electricity system,” he added.
Steve Shine, chairman of Anesco, a battery company, said: “It would be easy for National Grid to write this incident off as a fluke event, but they have actually been aware of this potential issue for many years.”
National Grid has managed to avoid wide scale blackouts by triggering last-minute contracts to help it stabilise the grid and avoid breaching the crucial 49.5Hz limit set by the regulator.
It contracts energy suppliers to ramp up their output from generators and batteries to make up for an outage, and offers contracts to companies such as factories and supermarkets, which can temporarily cut their energy demand to help stabilise the frequency of the grid.
But many of the companies tasked with supplying the “safety net services” – such as batteries and diesel farms, which are banks of small-scale generators – have warned that National Grid is not doing enough to safeguard the system against blackouts.
The UK’s booming renewable energy output can make it more difficult for National Grid to balance the frequency of the grid, which was originally built to accommodate fossil fuel power plants, which generate more intensive energy.
National Grid said it had embraced the UK’s renewable industry by developing “frequency response” tools – such as quick-fire back-up supplies of extra electricity – which should make it technically possible to run the energy system without any fossil fuels by 2025.
Shine said: “What is needed is a greater volume of faster response services, which can be called into action when the frequency drops. This would have prevented the need to turn the power off.
“It’s worrying that with just two generation sources dropping out of the supply mix, National Grid was still unable to deliver power to all areas, with no proper contingency plan in place,” he said.
“It’s exactly this kind of scenario the UK needs to be prepared for – these recent events demonstrate how important it is to have more, faster response services available, which can be called into action when the frequency drops,” he said.
Steven Meerman, the founder of battery firm Zenobe, called on National Grid to “update its old rules of thumb” to determine how many reserve services it kept on standby in the future.
“It may be the energy system is changing faster than expected,” he said.
John Pettigrew, National Grid’s chief executive, defended the grid’s response in a post on social media site LinkedIn entitled “there is never a good time for a power cut”.
He said: “Contrary to some erroneous media reports, I am not on holiday – indeed, I’ve been at my desk all weekend.
“As CEO of National Grid plc ultimately the buck stops with me.”Topics
(qlmbusinessnews.com via theguardian.com – – Mon, 12th Aug 2019) London, Uk – –
Travel operator, which had already asked for £750m, wants to stave off winter cash crunch
Shares in Thomas Cook have slumped after the troubled travel operator said it was seeking to raise another £150m from investors – after already asking for £750m – to stave off a Christmas cash crunch.
Thomas Cook said it was in advanced discussions with its banks and Fosun, the Chinese conglomerate and its biggest shareholder, over the “substantial new capital investment”.
The British travel company, which traces its history to 1841, has struggled in recent years due to a large debt pile, intense competition and structural change to a travel industry lumbered with large branch networks. In recent months unseasonable weather and the impact of Brexit on consumers’ travel plans have added to its woes, pushing it to a £1.5bn loss for the six months to 31 March.Quick guide
Thomas Cook shares fell by a fifth on Monday to 6.2p amid questions of whether the company would survive. The price was a far cry from highs of 140p reached as recently as May 2018. The former FTSE 100 blue chip company was worth only £147.9m before the latest fall in its value.
The latest cash injection comes a month after Thomas Cook revealed it was in talks over a £750m rescue deal with Fosun, a Shanghai-based company with diverse interests that include Wolverhampton Wanderers football club, insurance and property businesses and the Club Med tourism brand.
Thomas Cook said the extra £150m would provide it with liquidity headroom during the winter months, when travel operators generally ran low on cash after bulk buying hotel space before a surge of bookings for the next summer. It expects the bailout to be concluded in early October.
Those shareholders who have remained with Thomas Cook are expected to have the value of their shares “significantly diluted” by the bailout, which will result in about £1.7bn in debt converted to equity alongside the £900m cash injection.
The plans would also involve splitting its profitable airline from the tour operator business, which Fosun would essentially take over. Fosun would then have to decide on any reorganisation, prompting concern about the future of the 21,000-member workforce. The company has 563 high street branches in the UK.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 12th Aug 2019) London, Uk – –
The number of empty shops in town centres is at its highest for four years, industry figures show.
The vacancy rate was 10.3% in July, its highest level since January 2015, according to the British Retail Consortium and Springboard survey.
Footfall also fell by 1.9% in July, the worst July performance for seven years.
Diane Wehrle, Springboard insights director, said July had been “much more challenging” for shopping centres and High Streets than out of town stores.
The survey showed that High Street footfall declined by 2.7% in July, and shopping centre footfall declined by 3.1%.
In contrast, footfall in retail parks increased by 1.2%.
Ms Wehrle added: “Consumer demand is ever-more polarised between convenience and experience, and the stronger performance of out of town destinations where footfall rose by 1.2% in July reflects the fact that retail parks are successfully bridging the convenience-experience gap.
“They not only offer consumers accessible shopping environments with free parking and easy click and collect opportunities for online purchases, but many also combine this with an enhanced experience that includes coffee shops and casual dining restaurants, and some also have leisure facilities.”
The town battling the High Street blues
Chris Vallance, BBC's The World At One
In a shopping arcade in Stockton-on-Tees, the loudspeakers are playing Empire State of Mind. “Bright lights will inspire you,” goes the chorus, but the canned music isn't inspiring all the shoppers.
“It's getting like a ghost town really,” one says. “They've made it nice, the area, but the shops are going one by one.”
In 2018, data from the Centre for Retail Research found more than 2,500 mostly medium or large retail businesses failed, and the organisation's Joshua Bamfield now expects 2019 to be worse.
Stockton-On-Tees has also faced losses.
“Marks & Spencer, they closed and now Debenhams is going to close,” Labour's Nigel Cooke, the borough council cabinet member for regeneration and housing, told Radio 4's World At One.
Stockton's response to High Street closures has been to try to “reinvent” the High Street.
The BRC said there was concern about the rise in empty store fronts.
“If the government wishes to avoid seeing more empty shops in our town centres then they must act to relieve some of the pressure bearing down on the High Street,” said BRC chief executive Helen Dickinson.
“Currently, retail accounts for 5% of the economy, yet pays 10% of all business costs and 25% of all business taxes. The rising vacancy figures show this is simply not sustainable.
“We need an immediate freeze in rates, as well as fixing the transitional relief, which leads to corner shops in Redcar subsidising banks in central London.”
Tesla’s Gigafactory in Nevada is expected to be the largest building in the world by footprint once completed. CNBC’s Uptin Saiidi gets a rare look inside what Tesla founder Elon Musk calls, ‘the machine that builds the machine.’
Sneaker Con co-founder Yu-Ming Wu and Hayden Sharitt, a 21-year-old resale business owner, take us inside the industry where some sellers make millions of dollars on pre-owned shoes, as they attend a sneaker trading show in Cleveland.
Cambridge may be home to one of the world’s most revered universities but there's much more to this historic English town. With the picturesque River Cam running through its centre, Cambridge is as beautiful and it is fascinating. New restaurants and bars have invigorated its food scene, offering a blend of creativity and tradition. Welcome to Cambridge
This is the ultimate must-try food bucket list. From burgers dipped in cheese to classic NY cheesecakes to edible cookie dough, here are 42 foods you have to eat before you die and where you can try them.
(qlmbusinessnews.com via bbc.co.uk – -Fri, 9th Aug 2019) London, Uk – –
The UK economy contracted 0.2% between April and June, its worst performance since 2012, the Office for National Statistics said.
The surprise contraction came after a boost to economic growth in the first three months of the year because of Brexit stockpiling.
Rob Kent-Smith, head of GDP at the ONS, said manufacturing output fell and the construction sector weakened.
The pound slipped after the data was released, raising fears of a recession.
A recession occurs when the economy contracts in two consecutive quarters.
Economists had not been forecasting a contraction in the economy in the second quarter, but had expected it to stagnate, with the consensus forecast for 0% growth.
Why is the economy shrinking?
The economy had shown 0.5% growth in the first quarter after manufacturers' stockpiling ahead of Brexit helped to boost output, when the manufacturing sector recorded its biggest quarter rise since the 1980s was recorded.
The ONS said GDP had been “particularly volatile” so far this year because of the changes to activity sparked by the original Brexit date of 31 March.
The statistics body said its latest figures showed that those increased stockpiles had been partly run down in the second quarter and that a number of car manufacturers had brought forward their annual shutdowns to April as part of contingency planning, which also hit growth.
Mr Kent-Smith said: “Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK's original departure date from the EU.”
He added that “the often-dominant service sector delivered virtually no growth at all”.
Analsis: BY Faisal Islam
The economy has contracted over a quarter for the first time since 2012, raising the risk that the UK might be in a technical recession.
The numbers do contain some distortions that flattered growth in the first quarter, and have depressed it in the second, including stockpiling for a no deal Brexit.
They also contain the post no deal shutdowns of car factories around the first Brexit deadline in March.
But there are some real and enduring weaknesses in this number too, some of which is down to poor levels of investment, and some down to poor global growth.
This figure though is set to be the worst in the G7. The UK should avoid a recession if expectations of growth in this quarter are fulfilled, but that is not guaranteed. It is not the welcoming present that a new chancellor and PM would have wanted.
What else is happening to growth elsewhere?
The data comes at a time when there are signs other economies are slowing. For instance, data on Friday showed that French industrial output also fell more than expected in June.
Chancellor Sajid Javid said: “This is a challenging period across the global economy, with growth slowing in many countries.
“But the fundamentals of the British economy are strong – wages are growing, employment is at a record high and we're forecast to grow faster than Germany, Italy and Japan this year.”
But John McDonnell, the shadow chancellor, said the “dismal economic figures are a direct result of Tory incompetence”.
“The Tories' Brexit bungling, including Boris Johnson now taking us towards no-deal, is breaking the economy.”
What does business say?
The employers' body, the CBI, said the contraction was “concerning”.
Alpesh Paleja, CBI lead economist, said: “Growth has been pushed down by an unwind of stockpiling and car manufacturers shifting their seasonal shutdowns.
“Nonetheless, it's clear from our business surveys that underlying momentum remains lukewarm, choked by a combination of slower global growth and Brexit uncertainty.
“As a result, business sentiment is dire.”
The Federation of Small Businesses – which is calling for an emergency Budget – said that if the Treasury delays action until after 31 October, the date for Brexit, its efforts are likely to prove too little, too late.
“Time is of the essence. Unless the chancellor steps in imminently with radical action, we could be heading for a chaotic autumn – and a very long winter,” said the FSB's policy and advocacy chairman, Martin McTague.
How have economists reacted?
Chris Williamson, chief business economist at IHS Markit, said the data showed “an economy in decline and skirting with recession as headwinds from slower global growth are exacerbated by a Brexit-related paralysis”.
Geoffrey Yu of UBS Wealth Management said that while the global picture was “becoming more gloomy”, anyone looking for positive signs for the economy could look to “robust private consumption, reflecting a healthy labour market”.
Household spending rose 0.5% on the quarter. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, agreed that household spending was still growing at a “robust rate” said it was not time to panic.
He said the stockpiling was dragging on the economy, which was “sluggish and had not stalled”.
What has happened to the pound?
The pound – which has been at two-year lows on Brexit uncertainty – fell 0.2% against the dollar to $1.2106.
The currency also falls if there are expectations that interest rates will be cut. Mr Tombs said the market now sees a 70% chance of an interest rate cut in January, when Mark Carney is due to leave as the Bank of England's governor.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 9th Aug 2019) London, Uk – –
The company says a price war in the US is easing but slowing revenue growth leaves analysts worrying about its ability to expand.
Shares in Uber fell around 6% after the company reported record losses for its second quarter.
The $5.24bn (£4.3bn) net loss was significantly wider than its $878m (£723m) loss at the same time last year.
Costs rose by 147% to $8.65bn (£7.1bn) during the quarter.
This was partially due to one-off costs, such as $3.9bn (£3.2bn) of stock-based compensation expenses related to its IPO earlier this year and nearly $300m (£247m) in “driver appreciation” related to the stock sale.
But there was also a sharp rise in spending on research and development.
Total revenue was up 14% to $3.2bn (£2.6bn) but still below expectations.
Revenue from the company's main business – its ride-hailing – grew just 2% to $2.3bn (£1.9bn) and food delivery division Uber Eats grew 72% to $595m (£490m).
Haris Anwar, analyst at financial markets platform Investing.com, said: “Losses are widening and the competition is cut-throat.
“What's sapping investor confidence and hitting its stock hard after this report is the absence of a clear path to grow revenue and cut costs.”
Chief executive Dara Khosrowshahi insisted the losses would diminish in 2020 and 2021 while the company invests aggressively.
The competitive environment is starting to rationalise and has been “progressively improving”, he said, adding that the business would eventually become profitable.
Uber's monthly active users rose to 99 million globally, from 93 million at the end of the first quarter and 76 million a year earlier.
(qlmbusinessnews.com via uk.reuters.com — Thur, 8th Aug 2019) London, UK —
LONDON (Reuters) – Pay for permanent staff hired in Britain through recruitment agencies rose in July at the slowest rate since April 2017, according to a survey that suggested Brexit uncertainty continues to weigh on the labour market.
The monthly report from the Recruitment and Employment Confederation and accountants KPMG also showed companies reduced the volume of new permanent staff for a fifth month running, albeit at a slower pace than in June.
Overall, the survey added to signs that the labour market, the strongest feature of Britain’s economy over the last few years, may now be on the wane. Last week, the Bank of England said it saw signs of softening, with employment growth .
“Businesses continue to take a cautious approach to hiring as Brexit and economic uncertainty linger,” James Stewart, vice chair at KPMG, said. “Uncertainty is also impacting the supply of labour, as people are choosing to sit tight until the outlook is clearer.”
Official labour market figures covering the three months to June are due on Tuesday.
(qlmbusinessnews.com via theguardian.com – – Thur, 8th Aug 2019) London, Uk – –
Holidaymakers face the prospect of mass disruption at multiple airports in August after Ryanair pilots voted for strikes that could coincide with walkouts by their counterparts at British Airways and by Heathrow ground staff.
The pilots’ union Balpa said “decades of Ryanair refusing to deal with unions” had led to members voting for a 48-hour strike beginning on 22 August and a 72-hour strike from 2 September.Quick guide
What are your rights when flights are cancelled or delayed?
When an airline starts cancelling or delaying flights for more than three hours, passengers are entitled to compensation of €250-€600 under EU rules.
The cause of the problem has to be under the airline’s control and not an “extraordinary circumstance”. Lack of planes/staff, flight overbooking, a strike by the airline’s staff or an IT failure are all considered to be within the airline’s control – so compensation is payable.
Passengers on cancelled short-haul flights – up to 1,500km – are entitled to €250 or £230. For flights of 1,500km-3,500km duration, passengers are entitled to €400 (£370) or €600 (£555) for the longest flights (more than 3,500km).
Compensation is also payable in the event that the plane is delayed. The payments are the same but only kick in when the plane has been delayed three hours for short flights or four hours for the longer trips. The delay is calculated against the time the plane was due to arrive.
Passengers are also entitled to “assistance” under the EU rules. Short-haul passengers should receive food and water after two hours. Mid-distance passengers get help after three hours, while long-haul passengers receive it after they have been held in the terminal for four hours. If the delay is overnight, passengers should be provided with hotel accommodation but this often does not happen. This assistance should be provided irrespective of whether the delay is the airline’s fault.
The airlines have fought these compensation rules since they were introduced and passengers have had to go to court to get their money. The airlines frequently blame delays on events outside their control. Freak weather events, or a last- minute strike by air traffic controllers are deemed to be outside their control. A lack of planes or staff is not.
The rules only apply to EU-based airlines or all flights that start in the EU on non-EU based carriers. What will happen post-Brexit is not yet clear. Miles BrignallWas this helpful?
“We have had no formal offer from Ryanair and it is imperative that we resolve this dispute urgently to avoid strike action,” said Balpa’s general secretary, Brian Strutton.
“No pilot wants to spoil the public’s travel plans but at the moment it seems we have no choice.”
Any disruption caused by walkouts at Ryanair could coincide with parallel action by BA pilots and Heathrow ground staff, who have yet to rule out their own stoppages.
Balpa is still locked in pay negotiations with BA , whose staff can strike at two weeks’ notice if they do not accept the airline’s offer.
A 48-hour strike by more than 4,000 security guards, firefighters, engineers and passenger service workers at Heathrow was called off, after the airport made a new pay offer. But more action is scheduled for the 22 and 23 August, the same day as the Ryanair walkouts, if staff do not accept the proposals.
(qlmbusinessnews.com via uk.reuters.com — Wed, 7th Aug 2019) London, UK —
LONDON (Reuters) – Energy bills are set to fall for millions of households in Britain this winter after the country’s energy regulator told suppliers to reduce bills by 6% from Oct. 1, following a drop in wholesale gas and power prices this year.
Britain’s big six energy suppliers are Centrica’s British Gas, SSE, Iberdrola’s Scottish Power, Innogy’s npower, E.ON and EDF’s EDF Energy.
The regulator, Ofgem, said the price cap for average annual consumption will fall by 75 pounds ($91.21) to 1,179 pounds from Oct. 1. In April the cap was raised by more than 10% to 1,254 pounds.
“Wholesale energy prices have significantly fallen between February and June 2019. A combination of low demand during the winter, strong gas supply and relatively healthy storage levels have pushed down wholesale prices,” Ofgem said here in a statement.
Wholesale UK gas and power prices have steadily lost up to half their value since last September.
Ofgem was tasked with taking action by parliament last year after lawmakers said customers were being overcharged for electricity and gas.
The price cap applies to the so-called standard variable tariff (SVT), the most popular type of rate offered by the big six, as well as to other default deals, and is intended to be a temporary measure lasting until 2023 at the latest.
Around 11 million customers are on SVTs.
Last month, the Competition and Markets Authority made changes to a pre-payment meter cap which will lower costs by 25 pounds a year for another 4 million customers.
Dermot Nolan, chief executive of Ofgem, told journalists that the difference between SVTs and other tariffs will likely fall in the coming months but there are still cheaper tariffs available which people can choose to switch to.
“I do not think the cap is conservative. If you look at the pressure it has put on energy supply firms to make efficiency cuts and up their game….then it is not a ‘soft-touch’ price cap,” he said.
The shares of UK-listed Centrica and SSE were little changed. German energy group E.ON posted a 75% drop in operating profit on Wednesday at its retail unit, as the UK price cap in squeezed margins.
“The market in Great Britain is currently particularly challenging,” E.ON chief financial officer Marc Spieker said.
Months of weak gas prices have hurt the bottom line of some gas suppliers such as Centrica, which reported a near 50% drop in adjusted operating profit for the first half of 2019, sending its shares to a 21-year low.
Ofgem reviews the default tariff cap each April and October and can adjust it according to changing costs such as wholesale energy prices.
It is calculated using a formula that includes wholesale gas prices, energy suppliers network costs and costs of government policies, such as renewable power subsidies.
Ofgem said the wholesale energy cost part of the cap fell by 75 pounds to 446 pounds and other costs, such as VAT and supplier profits, fell slightly.
“These reductions offset cost increases totaling 7 pounds of other elements such as operating costs, network charges and environmental schemes, resulting in an overall reduction of £75 in the level of the default tariff cap,” Ofgem added.
Ofgem has estimated that the default tariff cap would have reduced the price of average SVTs from the six largest suppliers by 75-100 pounds per year since April 2015 had it been in place since then.
“(This) shows these suppliers have consistently charged more than the indicative level of the default tariff cap, which reflects the estimated costs of an efficient supplier,” it said.
Reporting by Nina Chestney and Noor Zainab Hussain
(qlmbusinessnews.com via bbc.co.uk – – Wed, 7th Aug 2019) London, Uk – –
The UK food industry has asked the government to waive aspects of competition law to allow firms to co-ordinate and direct supplies with each other after a no-deal Brexit.
The Food and Drink Federation (FDF) said it repeatedly asked ministers for clarity on a no-deal scenario.
Existing rules prohibit suppliers and retailers discussing supply or pricing.
The industry says leaving in the autumn could pose more supply problems than the original Brexit date last March.
The FDF, which represents a wide range of food companies and trade associations, said: “We asked for these reassurances at the end of last year. But we're still waiting.”
The boss of one leading retailer told the BBC: “At the extreme, people like me and people from government will have to decide where lorries go to keep the food supply chain going. And in that scenario we'd have to work with competitors, and the government would have to suspend competition laws.”
The FDF's chief operating officer Tim Rycroft told the BBC that in the event of a no deal, there would be “selective shortages” of food that would go on for “weeks or months”.
“It may be the government is going to come to us and say, ‘can't you guys work together to ensure that remote communities or the elderly or children – at risk groups – don't suffer from these shortages',” he said.
“We're happy to help, but the CMA can fine companies up to 10% of turnover if they are guilty of anti-competitive behaviour. So we wouldn't be able to do that without some pretty cast iron reassurances.”
He said the industry had asked for these reassurances at the end of last year, but despite “support” from the Department for Environment, Food and Rural Affairs, they were still waiting.
A government spokesman said: “The UK will be leaving the EU on 31 October and our top priority is supporting consumers and businesses in their preparations for Brexit.
“We are working closely with the food industry to support preparations as we leave the EU.”
There is a precedent for the government or competition authorities to act in this way, with the government pointing to four previous examples of such orders having been made – three in relation to the defence industry (one of which was subsequently repealed), and a fourth made regarding arrangements for the supply of oil and petroleum products.
But John Fingleton, the former head of the Office for Fair Trading, warned: “The last time something like this happened was in relation to dairy prices in 2001 when companies incorrectly thought government words about higher prices for dairy farmers would protect them from competition law. It did not.”
As a consequence, supermarkets faced huge fines for price fixing.
Which industries could suffer from a no-deal Brexit?
The cross-party Exiting the EU Committee has warned that a no deal could mean “damaging consequences” for sectors such as:
It comes after Domino's Pizza Group said it had spent £7m stockpiling ingredients, including tomato sauce, in case a no-deal Brexit disrupts supplies.
The company, which imports the tomato sauce for its pizza bases from Portugal, said the probability of shortages of ingredients had increased since March.
The FDF said it has repeatedly asked government to direct the CMA to issue a “letter of comfort” to the industry that such co-ordination would be considered legal, in the public interest and that the strict letter of the law would not be enforced in this situation.
The industry claims that the government, in internal discussions, has played down the impact a no-deal Brexit would have on the overall food supply.
One industry member said that a year ago: “Food was part of the conversation in terms of what to prioritise in a no-deal Brexit”.
That has changed with the government now privately acknowledging there may be an impact on price and choice rather than overall availability.
The change in date for the UK to leave the European Union from the end of March to the end of October is also causing problems for the food industry as it relies more heavily on Europe for fresh food at this time of year.
There is also a lack of warehouse space available for stockpiling.
One retailer said that 31 October “is about the worst day you can pick,” because warehouse capacity is at 105% in November, versus 75-80% in March.
They said that the UK would need 30 massive empty warehouses to store just a week's extra food supply.
Lord Haskins, former chairman of Northern Foods, told the BBC: “The government thinks food will flow normally in the event of a no-deal Brexit. I have my doubts.
“I think there will be some panic buying, that will create shortages. I am very worried about the supermarkets getting a priority, we have to remember the schools are very important, the NHS is very important… restaurants and catering. All of them have very complex distribution systems. I don't see how that can be left to the private sector to deal with frankly.”
But the government spokesman said: “Half of the food we eat is produced in the UK. The rest of our food is imported, with 30% coming from the EU and 20% from other countries. There will not be an overall shortage of food in the UK after we leave the EU.”
(qlmbusinessnews.com via news.sky.com– Tue, 6th August 2019) London, Uk – –
The supermarket said staff must work flexibly across different departments as more stock is delivered directly to the shop floor.
Tesco is to cut around 4,500 staff in the latest round of redundancies at the UK's largest supermarket chain.
The majority of the jobs will be cut from 153 mid-size Metro stores, as well as from the smaller Express chain of shops and the larger superstores.
Tesco wants to overhaul its Metro stores in particular, saying that shoppers tend to use them for top-up shops rather than buying bigger baskets.
“The Metro format was originally designed for larger, weekly shops, but today nearly 70% of customers use them as convenience stores, buying food for that day,” said the supermarket.
It said 134 Tesco Express stores – out of 1,750 – would see a reduction in opening hours due to lower footfalls.
Tesco – Britain's biggest private sector employer with more than 300,000 staff – also said it was changing the way it stocked stores, with more products going directly to the shop floor and fewer being held in the back.
Staff will be expected to be more flexible, working across different departments and adding more focus on keeping stock levels high during busy lunchtime rushes.
The company said there would be a “leaner management structure”, with workers given headsets to communicate more easily.
Jason Tarry, Tesco's UK and Ireland chief executive, said: “In a challenging, evolving retail environment, with increasing cost pressures, we have to continue to review the way we run our stores to ensure we reflect the way our customers are shopping and do so in the most efficient way.
“We do not take any decision which impacts colleagues lightly, but have to make sure we remain relevant for customers and operate a sustainable business now and in the future.”
Its shares were down nearly 2% following the announcement.
The move comes after Tesco announced in January a drive to cut 9,000 jobsas it looked to restructure its store and head office functions.
At the time,Tesco said it would close counters at 90 of its largest supermarkets.
It said changing customer habits meant that meat, fish or deli service areas were not being used as frequently and the remaining 700 stores could see a reduced counter service.
Other reforms included new stocking routines which, it said, reduced the need for staffing and the removal of a hot food service for workers.
Tesco also said in January that it hoped to redeploy half the staff facing job losses.
A year earlier, Tesco announced plans to “simplify” its operational structures, placing 1,700 roles at risk as it pursued further savings.
Shopworkers' trade union USDAW, which represents over 160,000 Tesco staff, said it has called for government intervention to tackle the UK retail crisis.
Pauline Foulkes, the union's national officer, said: “Our members at Tesco are shocked and dismayed by yet another round of potential job losses, coming just months after 9,000 staff were put at risk in stores.
“We will be working hard to make sure that any members potentially affected by these proposals are supported at this difficult time and throughout the consultation period.
“This issue is not confined to Tesco, our high streets are in crisis, with jobs being lost due to shops closing, retailers folding and businesses engaging in significant restructuring to survive.
“We need the Government to address the worries and concerns of shopworkers and our members.”
(qlmbusinessnews.com via theguardian.com – – Tue, 6th Aug 2019) London, Uk – –
Cyber retailer offers to buy online businesses but fails to mention high street network
The online retailer Boohoo has made an offer to buy the digital businesses and brands of Karen Millen and Coast, in a move that will raise fears for the jobs of hundreds of workers in the brands’ high street stores.
In a statement to the stock market published on Tuesday, Boohoo said it had offered to buy the brands, but made no mention of the struggling Karen Millen’s extensive high street network.
Karen Millen and Coast together employ about 1,100 people with 32 stores and 177 concessions across the UK. Coast also has a significant overseas presence, with concessions in the Middle East and outposts as far-flung as Singapore and Malaysia.Quick guide
Why are UK high street retailers in trouble?
The Karen Millen holding company lost £5.7m in the year ending February 2018, after losing £11.9m in the previous financial year. Deloitte was hired as advisers about six weeks ago to assess options, and quickly decided a sale was the best option.
It is understood that Karen Millen has received multiple bids, but Boohoo’s offer is preferred at this point. Administrators could be called in as soon as Tuesday to run the sale.
In its statement, Boohoo said it had “made an offer to acquire the online business of renowned British brands Karen Millen and Coast, together with all associated intellectual property rights”.
A large proportion of Coast’s concessions are located in Debenhams and House of Fraser department stores, which have been forced to close branches to weather the high street trading crisis.
Boohoo, the fast-growing online empire whose brands include PrettyLittleThing, Nasty Gal and MissPap, has been one of the few retailers to buck the trend of painful decline in the sector. In June, the company reported a 39% sales rise in the three months to 31 May.
Boohoo was founded by the fashion entrepreneur Mahmud Kamani and Carol Kane in Manchester in 2006. It has expanded quickly, floating on the stock market in 2014. Its market value was £2.7bn on Monday, and shares rose by 1.2% in early trading on Tuesday.
The retail analyst Nick Bubb applauded the company’s move to diversify its business towards the older shoppers who frequent Karen Millen and Coast.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 5th Aug 2019) London, Uk – –
The chief executive of HSBC has stepped down after the bank said it needed a change in leadership to address a “challenging global environment”.
John Flint is giving up the role he has held for a year-and-a-half “by mutual agreement with the board”.
He will immediately cease his day-to-day responsibilities at HSBC, but will help with the transition as Noel Quinn takes over as interim chief executive.
Chairman Mark Tucker thanked Mr Flint for his “commitment” and “dedication”.
However, he said: “In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face and to capture the very significant opportunities before us.”
HSBC made the surprise announcement as it reported a 15.8% rise in pre-tax profit to $12.4bn (£10.2bn) for the six months to 30 June.
Mr Flint, who has worked at HSBC for 30 years, said: “I have agreed with the board that today's good interim results indicate that this is the right time for change, both for me and the bank.”
The 51-year-old ran the bank's retail and wealth management business before taking over as chief executive last year. At that time, Mr Flint was seen as a safe choice for the top job.
Anaylis: By Domonic O'Connell
HSBC portrays itself as a conservative bank. Unlike some rivals, it has never pursued the wilder excesses of investment banking, and has a proud record of appointing its chief executive and chairman from within. It is part of the establishment in Asia and the West, and makes its money from the giant trade flows between.
With a 30-year track record at the bank, John Flint appeared the safest of hands when appointed 18 months ago. The bank's shares have fallen during his tenure, but the increasing trade tensions between America and China explain most of the fall. Mr Flint will be a “good leaver” – meaning he keeps his entitlement to most of his share options – and which rules out any idea his departure is linked to misconduct.
Mr Flint was regarded as the favourite of his predecessor as chief executive, Stuart Gulliver – so it is possible that Mark Tucker, HSBC's chairman, has simply decided he wants his own man in the job.
But the Huawei connection, although not confirmed by HSBC, cannot be discounted. In seeking to keep in the good books of the US authorities – which had a monitor embedded at the bank – HSBC provided the information that allowed America to apply for the extradition of Meng Wanzhou, Huawei's chief financial officer. That cannot have pleased Beijing, and HSBC is reliant on China's goodwill as much as America's. Mr Flint may have been the necessary sacrifice.
Commenting on the current environment, HSBC said “the outlook has changed”.
It said that US interest rates were now expected to fall rather than rise and “geopolitical issues could impact a significant number of our major markets”.
It added: “In the near term, the nature and impact of the UK's departure from the European Union remain highly uncertain.”
Mr Flint has a 12-month notice period, but it is not clear when his departure date will be, because he has “agreed to remain available to HSBC”.
HSBC has also granted Mr Flint “good leaver” status, which means he will be entitled to any stock options that vest after he exits the bank, provided he does not work at a competitor for two years.
The bank said it has begun a search to find a new chief executive and “will be considering internal and external candidates”.
(qlmbusinessnews.com via news.sky.com–Mon, 5th Aug 2019) London, Uk – –
There is a further casualty on the high street as 45-year old Spudulike falls out of fashion with diners and ceases trading.
Spudulike, the baked potato chain, has collapsed leaving all 298 staff redundant.
Administrators confirmed in a statement on Monday that all 37 of the Spudulike group's outlets and head office were shut on Friday after a last ditch sale of the business fell through.
It marks the latest casual dining business to fold following a torrid time for the sector which, like wider high street retail, has been battling a toxic cocktail of weaker consumer demand at a time of higher costs.
It has seen the likes of Jamie's Italian be declared insolvent, while others to find trouble and close restaurants have included Prezzo and Carluccio's.
Spudulike is understood to have been in distress for some time and had sought a controversial Company Voluntary Arrangement (CVA) in a bid to secure rent cuts from landlords.
They opposed the plan due to the scale of the reductions being sought.
Sky News is seeking clarification on the situation facing its former employees after The Guardian reported they were owed two weeks pay.
Joint administrator Neil Bennett, from the business services firm Leonard Curtis, said: “We are very disappointed with the outcome after working for several weeks firstly preparing a CVA proposal, which was rejected by the group's creditors, and subsequently pursuing the sale of all or part of the group's business and assets with a number of prospective purchasers.
“Sadly a sale of the business and assets of the group on a going concern basis did not prove possible, following the last minute withdrawal of an offer that was close to completion.”
He added: “We are now focusing on seeking any interest in the group's remaining assets whilst managing the impact of the closures on former employees, helping them prepare and submit claims for any arrears of wages, statutory notice entitlement and redundancy pay.”
Anna Wintour, Editor-in-Chief of Vogue and Artistic Director at Condé Nast, joins Tina Brown, founder and CEO of Tina Brown Live Media/Women in the World, for a revealing conversation on fashion, motherhood, and politics.
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