Retail round up - the Sunday Papers
British shoppers delivered a surprise boost to the economy in January, igniting hopes that the UK will avoid a return to recession this year. Retail sales figures for January released by the Office for National Statistics (ONS) showed the strongest increase in sales volumes since the Royal Wedding last April. "This is very good news," said Alan Clarke of Scotiabank. "It suggests at the very least that we will be growing by 0.5 per cent in the first quarter and probably faster than that." The boost to sales was driven by sales of discounted furniture and sporting goods. An increase in mail order and internet shopping also made a strong contribution.
A London branch of Tesco was brought to a standstill yesterday in a protest against the company's low wages. Police were called to Westminster when a dozen right-to-work campaigners forced the shop to close to customers. They were demonstrating over a "misunderstood" job advert, which Tesco has amended, looking for permanent workers in exchange for expenses and jobseeker's allowances.
Rising unemployment and job insecurity may have triggered calls for the chancellor, George Osborne, to find a plan B. But new research shows that the economic gloom has failed to permeate the higher echelons of the retail sector, with premium brand sales rocketing as upmarket supermarkets' fine dining lines defy the downturn. The research also suggests that the retail sector, especially food and drink, is becoming polarised, with budget brands also performing well. Kantar Worldpanel, which tracks consumer behaviour through 30,000 UK households, says a sharp divergence in consumption patterns is taking place. In the past 12 months, strong sales at Aldi and Lidl, which are known for their discount brands, and the success of Waitrose suggest that both the bottom and top ends of the market are outperforming the centre.
Two aggressive American hedge funds are planning to seize control of Travelodge as the huge budget hotel chain scrambles to raise cash. The company is buckling under a mountain of debt. It has six weeks to raise £60m or it could face administration. Two New York hedge funds, Avenue Capital and Golden Tree Asset Management, are expected to step in with the money in return for control of the business.
A baby food business that operates from an Oxfordshire barn is attracting interest from some of the world’s biggest food companies. Nestlé, Danone and Pepsico are understood to be in early talks about buying a stake in Ella’s Kitchen, which sells pouches of healthy baby food. The business, based near Henley-on-Thames, made a £3.5m profit on sales of £31m last year.
Mail on Sunday
Are you hankering for the latest high-tech television, bristling with features such as internet connectivity and 3D? Be careful how you pay and where you shop – a TV costing one customer £1,000 could set another back by more than £4,000. Some of the difference is in the cost of credit, with electrical retailers charging staggering rates of up to 50 per cent APR. Then come the add-ons of exorbitantly priced warranties and insurance. An investigation by Financial Mail has also revealed that the situation is made even worse when retailers refuse to disclose product codes, enabling them to use higher initial prices that customers cannot readily compare elsewhere.
Simon Fox, HMV chief executive, has warned that firms using a base in the Channel Islands to avoid paying VAT on certain goods will simply move elsewhere when the controversial loophole is closed. The Chancellor announced last year that Low Value Consignment Relief (LVCR), which allows goods with a value of £15 or less from outside the EU to be sold free of tax, would no longer apply to the Channel Islands. This will take effect from April 1.
James Timpson, managing director of shoe repairer Timpson, has called for an urgent rethink of the way business rates are set. Timpson says his family business, which has 625 shops, has turned down the opportunity to open ten new branches because business rates are so high.Rates are due to increase again in April.
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