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Retail round up – the Sunday papers

Subway 'meatball' sub at centre of new VAT row, Community-run shops on the rise, M&S seeks £1m in dispute over rent, Ocado to drive up non-food sales, Boots to return to London stock market, Tesco seeks to bolster its top-tier executives to shore up UK performance, Osborne defies PM and blocks plastic bag tax, Websites given warning on misleading offers, Tycoons clean up in cosmetics sale, Giraffe serves up winning recipe, China’s Fairy Fox clothing hunts London float, Boots No 7 label to become billion-dollar global brand, Mobile phone providers use 'roaming rip-off' loophole, Booze, cigarettes and aisles of sweets, Fashion retailer Coast opening £1m outlet in London's Oxford Street , Ferocious squeeze on Middle Britain


Retail round up – the Sunday papers


Subway’s Meatball Marinara sub could be about to cause the Government some serious indigestion. The sandwich is set to be the subject of a High Court battle that could reignite the VAT pasty row that caused the Government such pain earlier this year. The case revolves around the heated Meatball Marinara “sub”, one of its most popular. If the tax authorities lose the case, it would be another blow to the Treasury and its attempt to close the VAT loopholes on food. The Subway sandwich is heated up before it is handed to customers, and in the eyes of the Treasury it is therefore “above ambient temperature” and liable for the full level of VAT at 20pc.

Increasing numbers of villages are setting up community-run shops to replace closed commercial stores. Faced with the closure of the only shop in a picturesque Cambridgeshire village, its residents desperately sought a solution to preserve local life. Elsworth was among 23 villages to set up community-owned shops across Britain in 2011, according to a new report. There are now 280 community shops in Britain’s villages and many are thriving despite the tough economic climate – with average sales increasing by 18 per cent last year, the study found.

Marks & Spencer has become embroiled in a £1.1m dispute with the landlords of part of its Paddington head office campus. The retailer, which vacated its 47-year-old headquarters at 55 Baker Street in London in September 2004 in favour of the West London site, has issued a writ against BNP Paribas Securities Services, part of the French banking giant, for rent over-payment. The writ, a copy of which has been seen by The Sunday Telegraph, demands repayment of £1.1m, including over-payment of rent, car-parking fees, service charges and insurance rent.

Ocado is expected to buy a warehouse dedicated to stocking non-food products, as the company attempts to loosen the ties with its main supplier Waitrose. The company is on the hunt for a third warehouse, which could be used to distribute its growing selection of home wares, kitchen equipment and toys to customers. It is understood it will talk about its ambitions when it publishes half-year results this week. commentators believe that any move for a third warehouse would be a clear statement of Ocado’s intention to shake off its reputation as being no more than the online delivery arm of Waitrose.

Boots is to return to the UK stock market as a by-product of Walgreens’ $6.7bn (£4.3bn) acquisition of a 45pc stake in the retailer’s parent company, Alliance Boots. A FTSE100 constituent until it was taken private in a £11.1bn leveraged buy-out led by Alliance Boots’ founder Stefano Pessina and private equity house KKR, the retailer is poised to return to the London Stock Exchange as part of an attempt to increase Walgreens’ European shareholder base.


Independent on Sunday

Tesco has started the search for a UK commercial director to sort out its stuttering domestic performance, as the grocery giant prepares to face shareholders in Cardiff this week.  The world's third-biggest retailer has hired executive search firm, Zygos, to find the new director who will sit on Tesco's UK board and work closely with the chief executive Philip Clarke.

A tax on plastic carrier bags has been blocked by the Treasury despite pressure from David Cameron, senior government sources claimed last night. The PM threatened supermarkets with a levy after a sharp rise in single-use bags threatened to reverse a previously successful campaign to limit their environmental impact. The Independent on Sunday has learnt that Caroline Spelman, the Environment Secretary, wanted a "bag tax" to be included in the Budget in March and the Queen's Speech last month.


Sunday Times

The Office of Fair Trading has sent warning letters to 35 discount websites ordering them to clean up their acts, amid fears that consumers are being misled. The action follows the OFT’s investigation into Groupon — the discount voucher site with about 1m subscribers — that found many of its practices potentially breached consumer regulations.

The family behind a British toiletries empire is preparing to bag a huge windfall from its sale. Mike Jatania and his three brothers — Vin, Danny and George — stand to net about £120m after putting a big chunk of their business, which owns household brands such as Vosene shampoo and Lypsyl lip balm, on the block.

A family-friendly restaurant chain has defied the high street gloom to serve up a sharp rise in sales. Turnover at Giraffe, which has 46 outlets, reached £40m in the year to March, up 18% on the previous 12 months. Underlying earnings rose 17% to £4m. The chain added six outlets last year and expects to open a similar number in 2012-13.

A fashion house that specialises in the teen market is set to become the second Chinese clothing brand to float in London this year. Fairy Fox hopes to raise £13m from a listing on AIM, the junior market, to fund expansion plans. If successful, the listing would value the expanding fashion operation at about £60m.

Mail on Sunday

Boots' No 7 label will become a billion-dollar global brand following the chain’s partial takeover by Walgreens. The US pharmacy giant is understood to have agreed the purchase of a 45 per cent stake to help it secure access to Boots’ own brands, including No 7. It will mean the label will be launched in most of Walgreens’ 8,000 US stores, leading to sales of about $1 billion (£650 million) a year within the next two to three years, sources said.

Mobile phone providers are exploiting a ‘roaming rip-off’ loophole in order to pocket millions of pounds of price cuts they should be passing on to customers. The European Union is demanding the companies slash internet tariffs – known as data roaming – and European call rates from next Sunday. But phone operators are promoting a series of ‘bundled’ deals to avoid passing on the reductions.

Cigarettes, beer and aisles full of sugary snacks are not what you’d expect to find in your local Boots. But its new owner has long since benefited from sales of such unhealthy products, raising fears that British stores may adopt the same practices – or at least become tarnished by association. Boots has positioned itself at the centre of Britain’s public health agenda and as a convenient first resort for those struck by illness. It has also conducted major health promotions, including anti-smoking campaigns. But pharmacy giant Walgreens, which last week agreed to buy a  45 per cent stake in Alliance Boots, has actively fought to resist legislation by US states to ban sales of tobacco in pharmacies.

Fashion retailer Coast will open its biggest store on Friday – a £1 million outlet in London’s Oxford Street. Customers will be invited to make appointments with friends and be served drinks while trying on clothes. About a third of the store, which is four times the size of a typical Coast outlet, has been devoted to fitting rooms.But the range has also increased by 40 per cent compared with a typical store to reflect better the products available online.

A ferocious squeeze on Middle Britain is likely to be highlighted this week with figures showing that higher taxes and stagnant earnings are corroding living standards. It follows a report last week by independent research group the Institute for Fiscal Studies, which used official data to show average incomes falling sharply in 2010-11. The annual report by the Office for National Statistics on Tuesday on the effects of taxes and benefits on household income is expected to highlight the situation.

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