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Next performed better than expected over the Christmas period and has increased its profit outlook as a result, painting a positive picture for retail over the Christmas period.

Sales were up nearly 5% in the nine weeks to 30 December on the same period in 2021, far outpacing the 2% reduction the retailer had forecast and £66m better than expected.

As a leading high street retailer, Next is seen as a bellwether for the retail sector.

The company upped full-year profit before tax guidance by £20m to £860m, up 4.5% on 2021 but said it remains “cautious” in its “outlook for the year ahead”.

The cold weather is behind some of the “dramatic boost to sales”, Next said in a trading update.

“We believe that the strength of demand for cold weather products in December was partly a result of pent-up demand from an unusually warm October and November.”

But the picture is looking gloomier for the coming year. Full price sales are forecast to be down 1.5% and profit before tax down 7.6% to £795m, compared to the current year.

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For now, Next shares have enjoyed a boost on the back of the news, and the share price was at a high not seen since mid-August.

Other major outlets reported similar growth in the face of expected business disruptions including icy weather and rail strikes.

Greggs said sales increased 18.2% in the final three months of 2022, compared to the same time in 2021. For the year as a whole, sales rose 17.8% on 2021.

The strike action and weather headwinds were less than the disruption caused by the COVID-19 pandemic, Greggs said in a trading update.

Addressing the increased sales, it said “This reflected a favourable trading pattern leading into the Christmas period and softer trading conditions in the comparable quarter of 2021 as a result of disruption caused by the Omicron variant of coronavirus.”

Over the year the baker said 186 new shops were opened and 39 were closed.

It was more optimistic for the coming year than Next, telling investors “We enter 2023 in a strong financial position that will enable us to invest in shops and supply chain capacity to bring Greggs to even more customers across the UK.”

Reduced budgets may be no bad thing for Greggs. It said: “While market conditions in 2023 will remain challenging, our value-for-money offer of freshly-prepared food and drink is highly relevant as consumers look to manage their budgets without compromising on quality and taste.”

Discount retailer B&M has also upped its full-year profit forecast as revenue rose 12.3% to £1.56bn in the 13 weeks to 24 December. As a result, pre-tax profits are expected to be above analysts’ expectations and between £560m and £580m.

Increased prices caused by double digit inflation, pushed up by high energy costs and supply chain difficulties, have led to a cost of living crisis that has eaten up disposable income and was expected to suppress economic activity in the run up to Christmas.

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Sainsbury’s to cut over 3,000 jobs as budget tax hikes loom

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Sainsbury's to cut over 3,000 jobs as budget tax hikes loom

Sainsbury’s has revealed plans to cut more than 3,000 jobs.

The supermarket said the move was a bid to save money ahead of a £140m leap in costs from budget tax measures, due to come into force within weeks.

Head office and senior management roles are among those affected, the chain said, adding that the cost-saving drive would also result in the closure of its remaining cafes, hot food, patisserie, and pizza counters.

All the proposals, Sainsbury’s added, were subject to consultation.

Chief executive Simon Roberts said: “We are facing into a particularly challenging cost environment which means we have had to make tough choices about where we can afford to invest and where we need to do things differently to make our business more efficient and effective.”

He made the announcement despite the company’s decision, a fortnight ago, to award inflation-busting pay rises to store workers across the business, which also includes Argos.

Mr Roberts is among business leaders to have publicly spoken out after October’s budget put firms on the hook for the bulk of £40bn in tax increases.

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He warned then that additional costs would result in higher prices for customers as the chain did not have the “capacity to absorb” a “barrage of costs”.

Sainsbury’s, he explained, was facing an additional annual bill of £140m from April to cover the cost of additional employer national insurance contributions alone.

Industry bodies have widely spoken of how higher costs will choke investment and jobs.

Cafes are due to shut at the following locations:

Fosse Park, Leicestershire

Pontypridd, South Wales

Rustington, West Sussex

Scarborough, North Yorkshire

Penzance, Cornwall

Denton, Greater Manchester

Wrexham, North Wales

Longwater, Norwich, Norfolk

Ely, Cambridgeshire

Pontllanfraith, South Wales

Emersons Green, South Gloucestershire

Nantwich, Cheshire

Pinhoe Road, Exeter, Devon

Pepper Hill – Northfleet, Kent

Marshall Lake, Solihull, West Midlands

Rhyl, North Wales

Lincoln, Lincolnshire

Bridgemead, Swindon, Wiltshire

Larkfield, Aylesford, Kent

Whitchurch Bargates, Shropshire

Sedlescombe Road, Hastings, East Sussex

Barnstaple, Devon

Dewsbury, West Yorkshire

Kings Lynn Hardwick, Norfolk

Truro, Cornwall

Warren Heath, Ipswich, Suffolk

Godalming, Surrey

Hereford, Herefordshire

Chichester, West Sussex

Bognor Regis, West Sussex

Newport, South Wales

Talbot Heath, Dorset

Rugby, Warwickshire

Cannock, Staffordshire

Leek, Staffordshire

Winterstoke Road, Bristol

Hazel Grove, Stockport, Greater Manchester

Morecambe, Lancashire

Darlington, County Durham

Monks Cross, Huntington, North Yorkshire

Marsh Mills, Plymouth, Devon

Springfield, Chelmsford, Essex

Durham, County Durham

Bamber Bridge, Lancashire

Weedon Road, Northampton, East Midlands

Hempstead Valley, Kent

Hedge End, Hampshire

Bury St Edmunds, Suffolk

Thanet Westwood Cross, Kent

Stanway, Colchester, Essex

Castle Point, Essex

Isle of Wight

Keighley, West Yorkshire

Swadlincote, Derbyshire

Leicester North, East Midlands

Wakefield Marsh Way, Wakefield, West Yorkshire

Torquay, Devon

Waterlooville, Hampshire

Macclesfield, Cheshire

Harrogate, North Yorkshire

Cheadle, Greater Manchester

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Manchester United and Chelsea owners aim for late winner in Lords Hundred auction

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Manchester United and Chelsea owners aim for late winner in Lords Hundred auction

Part-owners of Chelsea and Manchester United football clubs are among a quartet of finalists vying to buy a big stake in London Spirit, the most prestigious franchise in English cricket’s Hundred competition.

Sky News has learnt that a vehicle controlled by Todd Boehly, a shareholder in Chelsea, and members of the Manchester United-owning Glazer family have been shortlisted to acquire 49% of the Lords-based team from the England and Wales Cricket Board (ECB).

The other two shortlisted bidders are a consortium of technology company owners and financiers which includes the bosses of Google and Microsoft; and RPSG Group, the owner of the Indian Premier League team Lucknow Super Giants.

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People close to the process said on Thursday that the four bidders would be asked to submit sealed bids for the ECB stake next week, with the highest bidder expected to be chosen by the ECB.

The London Spirit franchise is expected to be valued at about £140m, meaning the proceeds to be received and distributed by the ECB would be approximately £70m, the insiders added.

The identities of the shortlisted parties means that India’s Ambani family, owner of the Mumbai Indians IPL team, is not in the running to buy the Lords-based outfit.

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Instead, the Mumbai Indians’ owners are pursuing bids for the Oval Invincibles and Manchester Originals teams, according to insiders.

Shortlists for some of the eight Hundred franchises are said to number fewer than four bidders, although the process has been complicated by the presence of some parties in several processes.

The Lucknow Super Giants owners, for example, are said to have been in pursuit of four of the eight teams.

In total, the ECB has indicated that it could receive in the region of £350m for its 49% stakes in the eight teams.

The host counties are also allowed to sell their 51% shareholdings, although some have said they do not intend to do so.

The MCC, which controls the London Spirit franchise, does not intend to offload any of its stake at this point, according to cricket insiders.

Sky News revealed earlier this month that the consortium of tech company chiefs was also bidding for the Oval Invincibles, with them also expected to be shortlisted in that process.

CVC Capital Partners, the buyout firm which has made a swathe of sports investments, has also tabled an offer for the Oval-based team.

Investors will only be allowed to own a stake in one of the eight teams, which also include Welsh Fire, Southern Brave and the Northern Superchargers.

A bigger-than-expected windfall from the process could offer a financial lifeline to a number of cash-strapped counties, with part of the proceeds likely to be used to pay down debt.

Concerns have been raised, however, that windfalls from the Hundred auction will not deliver a meaningful improvement in counties’ long-term financial sustainability.

The outcome of the Hundred auction is also likely to intensify other searching questions about the future of cricket, as the Test format of the game struggles for international commercial relevance against shorter-length competition.

The Hundred auction is being handled by bankers at Raine Group, the same firm which oversaw the sale of large stakes in both Manchester United and Chelsea in recent years.

An MCC spokesman declined to comment, while none of the bidders contacted by Sky News would comment.

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Primark sales woes underline the challenges facing retail

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Primark sales woes underline the challenges facing retail

Primark’s owners have reported a rare plunge in retail sales during the crucial Christmas quarter, underlining the challenges facing even discount retailers in the tough economy.

Associated British Foods (ABF) reported a like-for-like sales decline of 6% for Primark in the UK and Ireland over the 16 weeks to 4 January.

It said that while sales within the fashion-dominated business had held up over the festive season, the build up to December was mired by weak consumer demand and warm weather.

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ABF said that as a result of the drag, it was now expecting “low single-digit” sales growth for the brand in 2025, down from a forecast for mid single-digit growth made in November.

That was despite growth in key emerging markets of the US, France, Spain, Italy and Portugal.

The UK and Ireland account for almost half of Primark’s revenues.

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The company’s bleak update chimes with the findings of an industry survey, released earlier on Thursday, which stated that the outlook for UK consumer confidence had plunged to a new low.

The British Retail Consortium’s (BRC’s) latest Sentiment Monitor showed declines in expectations for both the economy and personal finances.

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‘We need to grow our economy’

The retail lobby group has been among the loudest voices in opposing Chancellor Rachel Reeves’ decision to pile £25bn of taxes on business in the budget – the vast majority through employer national insurance contributions.

The measures do not kick in until April but major employers, such as supermarkets and other major chains, have widely warned that the tax grab will result in lower investment, jobs, wages and higher prices to help offset the impact.

The most recent employment figures pointed to an acceleration in job losses among payrolled employees during December.

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Reeves risks economic ‘doom Loop’

While highlighting the deterioration in consumer confidence, the BRC did add that a significant contribution was likely to have come from a traditional post-Christmas easing when many shoppers tend to tighten their belts.

BRC chief executive Helen Dickinson said of the outlook: “As the government warns of tough times ahead, it is little surprise that the public have caught the January blues.

“Consumer confidence in the economy fell to a new low, with concerns most pronounced among older generations.”

She added: “On top of this challenging market backdrop, retailers are facing £7 billion in additional costs from the budget and new packaging levy.

“With retailers’ tight margins leaving little scope to absorb more costs, many are warning of price rises and job cuts in the coming months.

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Low retail sales in key Christmas month

“To mitigate this, and shore up investment in shops and entry level jobs, the government must ensure that no shop ends up paying a higher business rates bill because of its proposed reforms.”

The Labour government has placed economic growth at the top of its list of priorities but the economy has stagnated since the election, with consumers continuing to grapple a host of higher bills such as from household energy.

Shares in ABF were down by more than 2.5% while some other consumer-facing stocks also fell in sympathy.

Russ Mould, investment director at AJ Bell, said of the update: “If Primark is struggling, you know the UK retail sector is in trouble.”

He added: “When Primark says UK sales are weak, you know there has been a change in shopper behaviour. People might still be visiting its stores but they are being more selective and that’s a problem when the business model is built on shifting high volumes of goods.

“Retailers love to blame the weather when things don’t go well. While the UK autumn was relatively mild, winter has been bitterly cold so Primark should still have been able to shift plenty of jumpers and coats in recent weeks, albeit the last couple of weeks fall outside of the reporting period to 4 January for the trading update.”

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