Retail round up Â– the Sunday papers
High Street rocked by huge rise in profit warnings, WM Morrison opens first of chain of convenience stores, Cash-strapped retailers face collapse over cost of Christmas stock, Allders: Tillman talks, but no sale, M&S bosses face a pay row as rebellions grow, Tesco recruits have to agree working anti-social hours
The gloom on the High Street reached new depths on Saturday after a report by Ernst & Young revealed that more profit warnings were issued in the first six months of the year than the whole of 2010. The analysis showed that 26 profit warnings were made by listed retailers, twice as many as were made in 2009, before the financial crisis had an impact on the economy. The number of general profit warnings rose by 40pc in the second quarter of 2011.
WM Morrison, the UK's fourth largest supermarket, has opened the first of a planned chain of convenience stores with a pledge to undercut rivals' prices in the sector. In a break from its rivals' practices, Morrisons said that it will not charge a premium on fresh products sold in its so-called M-local small shops. Rivals such as Tesco and J Sainsbury charge more at their convenience shops for certain products than they do at their larger stores. Dalton Philips, chief executive of the Yorkshire-based grocer, said Morrisons wants to be a "challenger brand" when it comes to price.
Ernst & Young says that suppliers, spooked by the spate of retail failures, may cut back their lines of credit to struggling retailers. The cost of stocking the shelves for Christmas may force the collapse of several more high street retailers, a leading accountancy firm has warned. Ernst & Young said retailers who had been "hanging on in there" since the 2008-09 recession might not be able to build up enough cash to pay for extra stock for the crucial festive season as well as the rent due at the next quarter-day in September.
The Independent on Sunday
Harold Tillman has held talks to sell his department store, Allders of Croydon. Mr Tillman, the chairman of Jaeger and Aquascutum, and of the British Fashion Council, and his chief executive Andrew MacKenzie, held talks with Beales, the regional chain, earlier this year. The talks have ended, but a sale could still be on the cards for the UK's third largest department store, which is 150 next year. Some sources said that Hilco has shown interest, but this was denied.
Mail on Sunday
Marks & Spencer will this week face the anger of shareholders for the fourth year in a row over ‘excessive’ pay and bonuses for directors. The company, which is holding its annual meeting in London on Wednesday, is one of a string of high-profile firms being forced to justify their pay and incentive schemes to investors.
Tesco has introduced rules that could mean a fifth of its new staff will have to commit to working unsociable and disruptive hours. The supermarket giant has introduced contracts that will require staff to commit to a ‘flexibility plan’ stating what times of day they are prepared to work before they are given employment contracts.
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