Connect with us

Published

on

A sharp fall in demand for groceries, as pubs and restaurants reopened to indoor customers, has driven a decline in retail sales volumes.

The Office for National Statistics charted a surprise 1.4% fall in retail sales between April and May.

Economists had predicted growth of 1.6% on the back of a 9% surge the previous month following an easing of COVID-19 restrictions that released pent-up demand for goods on the high street.

The fall in grocery volumes was backed up by separate figures from Tesco, the UK’s largest supermarket chain, which noted a decline in sales for meals at home during April and May in its first quarter results statement.

Tesco
Image:
Tesco said it enjoyed a ‘strong performance’ overall in the three months to 29 May

The retailer, which like its rivals has been among those shielded from pandemic sales pain, still reported like-for-like UK sales growth of 0.5% over the period against the tough comparison of the same three months to May in 2020.

Commenting on the wider performance for the retail sector as a whole, ONS director of economic statistics, Darren Morgan, said: “

“Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May.

More from Business

“However, they remain well above both their pre-pandemic levels and those seen in March before shops reopened.

“Food stores sales suffered as feedback suggested the reopening of hospitality meant consumers took advantage of eating out instead.

“Household goods stores and garden centres fared well as people spent money on improving their gardens in anticipation of the summer and the lifting of restrictions on outdoor gatherings.

“As customers returned to physical stores, online sales fell in May for the third consecutive month, but remain nearly 60% higher than the level seen in February 2020.”

In Tesco’s case, it reported revenue of £12.4bn – a rise of 1.3% on a like-for-like basis compared to the first quarter last year – and said it represented growth of 8.7% by the same measure on March-May 2019.

It reported a rising contribution from its Booker wholesale operation – thanks to hospitality reopening – and said a sales decline in Ireland reflected a strong comparison with a year ago as the country entered lockdown rather than any Brexit-related hit.

Ken Murphy of Tesco
Image:
Tesco boss Ken Murphy

Chief executive Ken Murphy told investors: “Our profit guidance from April remains unchanged.

“While the market outlook remains uncertain, I’m pleased with the strong start we’ve made to the year and continue to be excited about the many opportunities we have to create value over the longer term.”

A note to clients by Jefferies Equity Research said of the performance: “Resilient UK industry grocery sales and notable improvements at Booker have helped Tesco enjoy two-year stacked sales growth accelerating from the already strong levels seen at the end of 20/21.

“Despite the lack of formal guidance upgrade in this sales update, the upbeat start to the year suggests that guide for 21/22 retail profits similar to 19/20 could be bettered as the year progresses.”

Continue Reading

Business

Struggling CBI to impose 5% fee increase on members

Published

on

By

Struggling CBI to impose 5% fee increase on members

The CBI is urging members to swallow a further rise in fees even as the lobby group battles to regain its former standing among political and business leaders.

Sky News understands that CBI members will be asked at its annual meeting next week to approve a 5% rise in their subscription costs.

It comes less than three months after the organisation – which styles itself as ‘the voice of British business’ – won a lifeline from banks which agreed to provide sufficient funding to avert collapse in the aftermath of a sexual misconduct scandal.

The CBI has been slowly rebuilding its reputation, staging a slimmed-down version of its annual conference last month which featured an address by Jeremy Hunt, the chancellor.

In a circular to members, it said the fee hike was in line with previous years.

However, the group has been slashing costs by axeing a chunk of its workforce and closing most of its overseas offices in an attempt to restore its finances to a more stable footing.

Read more:
Frazer to prohibit removal of key Telegraph staff during probe
Lloyds shareholders could reap £500m bonanza from Telegraph deal

More on Cbi

The crisis which erupted earlier this year, which followed several rape allegations against former employees, triggered an exodus of corporate members including Aviva and John Lewis Partnership.

Tony Danker, its director-general – who was accused of inappropriate behaviour but had nothing to do with the more serious allegations – stepped down in April weeks after being suspended.

The CBI briefly entertained talks about a merger with Make UK, the manufacturers’ body, but these have now been curtailed.

The business group declined to comment on Friday, although an insider said it was “standard operating practice…to adjust prices for inflation”.

Continue Reading

Business

Frazer to prohibit removal of key Telegraph staff during probe

Published

on

By

Frazer to prohibit removal of key Telegraph staff during probe

The government is to prohibit the removal or transfer of key Daily Telegraph journalists during a public interest probe into the newspaper’s prospective takeover by a state-backed Abu Dhabi investor.

Sky News has learnt that Lucy Frazer, the culture secretary, is preparing to make an interim enforcement order (IEO) that will impose a set of restrictions on the Daily and Sunday Telegraph’s current owners.

City sources said the IEO – which has been notified to the Barclay family – was likely to be made public later on Friday.

Both the family and RedBird IMI are said to have agreed to the restrictions.

It will come within hours of the government issuing a Public Interest Intervention Notice (PIIN) that will subject the change of control at the broadsheet titles to a probe by Ofcom and the Competition and Markets Authority.

The IEO will prevent the Barclay family or RedBird IMI from expediting a further change of ownership, removing directors or transferring top editorial staff without the secretary of state’s approval, according to one insider.

Culture Secretary Lucy Frazer leaving Number 10 Downing Street, London, after a Cabinet meeting. Picture date: Tuesday June 20, 2023.
Image:
Culture Secretary Lucy Frazer

Whitehall officials had been considering using a separate order to ensure the newspapers’ independence during the PIIN, but sources said the IEO would effectively achieve the same objectives.

News of the IEO may assuage concerns raised by a growing number of Conservative parliamentarians about the Barclay family, which has owned the Telegraph since 2004, or RedBird IMI attempting to exert renewed influence on the newspapers.

Ms Frazer is seeking the regulators’ responses before the end of January, after which the takeover of the broadsheet newspapers could be approved or blocked.

Dozens of Conservative MPs, including the former party leader Sir Iain Duncan Smith, have called for the deal to face further investigation under national security laws.

The repayment of a £1.16bn debt to Lloyds is, however, unaffected by the PIIN.

Earlier on Friday, Sky News revealed that shareholders in Lloyds Banking Group could reap a windfall worth more than £500m early next year following the deal to repay the loans.

Lloyds is expected to receive the funds early next week from the Barclays following an agreement between the family and RedBird IMI, an Abu Dhabi-based vehicle which is majority-funded by members of the Gulf state’s royal family.

RedBird IMI plans to convert a £600m chunk of the loan into shares in the Telegraph newspapers and The Spectator magazine if it gains regulatory approval for the deal.

RedBird IMI, which is fronted by the former CNN president Jeff Zucker and funded in large part by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, has pledged to preserve the Telegraph’s editorial independence.

A trio of independent directors, led by the Openreach chairman Mike McTighe, will remain in place while the public interest inquiry is carried out.

Read more business news:
House prices show further growth
Train drivers to continue strike action
Cristiano Ronaldo faces $1bn lawsuit

RedBird IMI’s move to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.

Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall had been agitating for the launch of a PIIN.

The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, is now effectively over.

Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.

Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.

The DCMS and a spokesman for the Barclay family declined to comment.

Continue Reading

Business

Lloyds shareholders could reap £500m bonanza from Telegraph deal

Published

on

By

Lloyds shareholders could reap £500m bonanza from Telegraph deal

Shareholders in Lloyds Banking Group could reap a windfall worth more than £500m early next year following a deal that will see it repaid loans in full by the owners of The Daily Telegraph.

Sky News has learnt Britain’s biggest high street lender will be in a position to write back more than £500m on the value of a £700m loan extended years ago to the Barclay family.

One banking analyst said the writeback, the precise size of which will be disclosed in Lloyds’ annual results next February, would pave the way for Lloyds to return a significant amount of capital to investors, potentially through a special dividend or share buyback.

Lloyds is expected to receive a total of £1.16bn early next week from the Barclays following an agreement between the family and RedBird IMI, an Abu Dhabi-based vehicle which is majority-funded by members of the Gulf state’s royal family.

RedBird IMI plans to convert a £600m chunk of the loan into shares in the Telegraph newspapers and The Spectator magazine if it gains regulatory approval for the deal.

On Thursday, Lucy Frazer, the culture secretary, confirmed a Sky News report that she was issuing a Public Interest Intervention Notice (PIIN) that will subject the transaction to scrutiny by Ofcom and the Competition and Markets Authority.

Ms Frazer is seeking the regulators’ responses before the end of January, after which the takeover of the broadsheet newspapers could be approved or blocked.

A newsagent carries a pile of Daily Telegraph newspapers
Image:
A newsagent carries a pile of Daily Telegraph newspapers

Dozens of Conservative MPs, including the former party leader Sir Iain Duncan Smith, have called for the deal to face further investigation under national security laws.

The debt repayment to Lloyds is, however, unaffected by the PIIN.

The bank has already given notice to the government of the debt repayment, with the funds expected to be transferred early next week.

The outcome will be a stunning one for Lloyds and its chief executive Charlie Nunn, who had rejected a series of partial repayment offers from the family lodged after the Telegraph’s holding company was placed into receivership during the summer.

In addition to the £700m value of the principal loan, the Barclays are paying more than £400m in interest which has accrued over many years.

“The writeback is pure profit for Lloyds and will flow straight to the bank’s bottom line,” the analyst said.

One person close to the situation said that Lloyds had written down the majority, but not all, of the loan’s original £700m value.

A writeback of over £500m is therefore expected to contribute a meaningful proportion of the bank’s 2023 annual profit.

Analysts say the company is already generating significant sums of excess capital and that the absence of a substantial acquisition would therefore give Lloyds’ board the freedom to return the Telegraph loan windfall to shareholders.

RedBird IMI, which is fronted by the former CNN president Jeff Zucker and funded in large part by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, has pledged to preserve the Telegraph’s editorial independence.

The repayment of the Lloyds loan will trigger the dissolution of a court hearing in the British Virgin Islands to liquidate a Barclay company tied to the newspaper’s ownership, and temporarily put the family back in control of their shares in the broadsheet title.

However, the Barclays will be subject to restrictions imposed by the government which are expected to be outlined shortly.

A trio of independent directors, led by the Openreach chairman Mike McTighe, will remain in place while a public interest inquiry is carried out.

RedBird IMI’s move to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.#

Read more from Sky News:
House prices ‘show further growth’ after pause in interest rate hikes
Volta Trucks is saved but bulk of 600 UK workers are currently out of a job
Cristiano Ronaldo faces $1bn lawsuit

The battle for control of The Daily Telegraph has rapidly turned into a complex commercial and political row which has raised tensions between the DCMS and the Foreign Office over Britain’s receptiveness to foreign investment.

Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall had been agitating for the launch of a PIIN.

Sky News revealed recently that Ed Richards, the former boss of media regulator Ofcom, is acting as a lobbyist for RedBird IMI through Flint Global, which was co-founded by Sir Simon Fraser, former Foreign Office permanent secretary.

The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, has now been paused until next month.

The original bid deadline had been shifted from 28 November to 10 December to take account of the possibility that Lloyds might be repaid in full by the Barclay family by December 1.

That bid deadline is now expected to be cancelled.

Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.

Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.

A Lloyds spokesman indicated that any capital distributions would be evaluated in the usual way by its board ahead of the bank’s annual results, but declined to comment further.

Continue Reading

Trending