Sunday Retail News Roundup
Marks & Spencer supplier revolt, Knighthood for Tesco scandal accountant, Stores get foreign aid budget, M&S hires headhunter, Cold snap perks up Next, Linda Farrow frames new shops plan, BHS doomed by chaos and mistrust, Take-back Tuesday.
Marks & Spencer has been forced to accept wholesale price rises of up to 15% on some grocery lines after suppliers threatened to pull products from its shelves. Chief executive, Steve Rowe, angered small own-label suppliers in November when he promised to protect shoppers from the impact of sterling’s drop since the Brexit vote. Suppliers planned to stop shipping products in the new year unless it paid them more to compensate for sterling’s depreciation. Since EU referendum the Pound is down 17.4% against the dollar and 11.1% against the Euro, making it more costly for British companies to buy ingredients from overseas. Marks & Spencer backed down and agreed price increases of up to 15% over Christmas with some suppliers. The ceasefire raises the prospect of higher bills for shoppers and a squeeze on its profit margins. Supplier prediction is shelf prices would rise 8%-10% for chocolates and confectionery, nuts, tea and coffee.
Mail on Sunday.
Millionaire former boss of accountancy giant PwC has been given a knighthood despite his firm facing heavy criticism after a string of scandals. Ian Powell, who was UK chairman and senior partner, was attacked for failing to spot a multi-million pound black hole at supermarket chain Tesco. Industry watchdogs are still investigating PwC's handling of Tesco's accounts after a 2014 scandal in which the supermarket admitted its profits had been overstated by £326million which led to a share price slump and the resignation of the retailer's chairman.
Marks & Spencer, Sainsbury’s, Waitrose and Tesco were handed millions of pounds from Britain’s out of control foreign aid budget. Vast sums were spent on training and improving conditions for their Third World farmers and factory workers but critics say the multi-billion-pound firms should fund themselves. Sainsbury’s led a £161,106 taxpayer-funded project in South Africa called Top Of The Class, in which 170 workers were given ‘life skills’ training. A dozen of them were treated to an all-expenses-paid trip to the UK and photos posted on social media showed them enjoying visits to a rugby stadium and restaurants. The supermarket also ran a publicly funded £300,310 scheme in Kenya, called Worker Education And Nutrition, which produced a Swahili version of the British radio series The Archers.
Marks & Spencer is understood to have asked headhunter JCA Group to find it a new fashion boss to turn around its struggling clothing business. The role would also require an experienced executive, possibly even the boss of a firm, to run the £4 billion division. Candidates could include Mothercare boss Mark Newton-Jones; former Next product director Christos Angelides; or Fat Face boss Anthony Thompson, who worked at M&S as recently as 2007 as retail director.
Next update on Wednesday could provide cheer to the City this week when it is expected to say that colder weather and a late rush to the shops boosted sales, meaning higher profits than previously expected. The company is expected to say that full price sales at its stores, website and from its catalogue increased in the two months to December 24 by more than 2 per cent. That would be a reversal of the negative trend at the company in the previous quarter.
Linda Farrow, the high-end British glasses brand that counts Beyonce and Adele as fans, is planning an ambitious expansion plan to launch 100 stores globally after a savvy bet on the Brexit result. The radical roll-out comes as Linda Farrow has enjoyed a loyal celebrity following, after growing its creative team and collaborating with some of the world’s most sought-after luxury designers. The company is on track to post a 30pc lift in sales this year to around £75m.
The repercussions of BHS’s failure, one of the biggest corporate scandals to hit Britain in the 21st century, will continue to be felt through 2017. Although the parliamentary committee led by Labour MPs Iain Wright and Frank Field has delivered its verdict, there are other investigations still underway. The Pensions Regulator, the Insolvency Service, the Financial Reporting Council, HM Revenue & Customs and the Serious Fraud Office are all still looking into the circumstances surrounding the collapse of the 88-year-old chain.
Women’s clothes are the item most likely to be returned, says the Post Office, after analysing its Tracked Return service, used by more than 1,000 online sellers. It said that the number of returned parcels will spike on Tuesday, with volumes 50% higher than at other times of the year. Many retailers have a “goodwill” returns policy, often extended at Christmas, although credit notes may be offered rather than a full refund. John Lewis has a generous 90-day returns policy. Amazon goes further over Christmas. Items sold on Amazon.co.uk between 1 November 2016 and 31 December 2016 can be returned at any time before midnight on 31 January 2017. After that date, the retailer reverts to its standard 30-day return policy.
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