Sunday Retail News Roundup
The former bankrupt who took over BHS from Sir Philip Green has been arrested by HM Revenue & Customs (HMRC) for failing to pay more than £500,000 in tax on money he took from the department store chain. Dominic Chappell, 49, is understood to have been arrested in a dawn raid at his home. HMRC is understood to have carried out a simultaneous raid on his office at a nearby business park. The Pensions Regulator has threatened to prosecute Green and Chappell over the vast hole in BHS’s pension scheme. Chappell has admitted taking £2.6m from BHS but has refused to return any of the money, saying his “conscience is very clear”. A report filed at Companies House said HMRC was owed £365,000 in VAT and £197,300 in corporation tax. HMRC officers arrived with warrants at Chappell’s home and office at 7am on November 2 and took away computers and documents. HMRC confirmed only that it had arrested a 49-year-old businessman. Chappell, who bought two yachts, a Bentley and several Range Rovers during his time in charge, has angered former staff with his lifestyle since BHS disappeared from the high street.
Customers are lulled into believing they are getting the best deal from retailers on Amazon when the product can often be bought cheaper elsewhere online, including on the retailers’ own websites. There are a number of cases where rival independent retailers who sell on the Amazon Marketplace platform are offering the same product at the same lowest price on Amazon, suggesting fierce competition and a bargain for the shopper. In fact, the products can often be bought more cheaply at other online stores. Some retailers offer the same product at a cheaper price on their own websites. The analysis of price differences between the best deals on Amazon and those available elsewhere follows a pre-Christmas warning by the Competition and Markets Authority (CMA) that online retailers could be colluding to fix prices, and comes less than two weeks before the online shopping bonanza of Black Friday, which Amazon will be spearheading.
Marks & Spencer’s boss faces a rebellion by small suppliers after promising to protect food shoppers from the impact of sterling’s plunge since the Brexit vote. Steve Rowe said last week that M&S’s grocery prices were more likely to fall than rise, despite the pound’s slump against the dollar and the euro, which has pushed up costs of imported ingredients. Rowe said M&S planned to mitigate the pain through “optimisation of our supply base” and by selling in greater volumes. His pledge drew anger from suppliers of own-label products, some of which said their businesses had already been tipped into the red by sterling’s weakness. Several said M&S had taken a stance of refusing to renegotiate prices based on currency swings, and they would have to bear the brunt of the impact. It is the latest dispute to break out between suppliers and retailers over the prospect of high street inflation since the EU referendum on June 23. The pound is down 15% against the dollar and 11% against the euro. At its interim results last Tuesday, finance director Helen Weir said about 20% of M&S’s food lines came from dollar or euro areas. She said efficiencies would include putting more products in shipping trays to cut transport costs.
Mail on Sunday.
Shoppers hunting bargains are primed for a Black Friday frenzy with the number of orders expected to hit a record of almost ten million on the day. The discounting will begin in earnest tomorrow when online giant Amazon announces the first wave of thousands of price cuts and other traders follow suit. The two-week shopping bonanza will peak on Friday, November 25 when the number of orders is forecast to rise as much as 25 per cent compared with the same day last year to a total of 9.5million. But many retailers are now trying to resist heavy discounting because attempting to keep pace with the aggressive price cuts of rivals is threatening fragile profits. Last year, many retail chains including Asda and John Lewis complained that the heavy discounting associated with Black Friday cuts into profits at a time when trade is just beginning to warm up and when shops should be selling at full price. Last year’s Black Friday accounted for £1billion in sales with £3.3billion spent over the four-day period which includes ‘Cyber Monday’, three days after Black Friday. Sainsbury’s chief executive Mike Coupe said Black Friday was not particularly important for his supermarket chain, which is busiest the week before Christmas, but he said it would be ‘massive’ for Argos, the general merchandise chain which his grocery business bought for £1.4billion in April.
The boom in sales for German discount supermarkets Aldi and Lidl is grinding to a halt. Bruno Monteyne, of stockbroker Bernstein and a former Tesco director, has warned that growth at the discounters is falling off a cliff and will peter out altogether over the next 18 months. The analysis will be welcome news to the battered ‘Big Four’ British supermarkets, Tesco, Sainsbury’s, Asda and Morrisons, which have been losing sales to the fast-growing groups leading to a wide-ranging price war. Aldi and Lidl currently control 12 per cent of the UK food retail market, a share that has doubled in four years. But despite spending huge sums on advertising, like-for-like sales at existing Aldi stores are falling. Aldi spent £62.5million, almost as much as Tesco, which is nearly four times bigger by food market share. Lidl spent an estimated £78.3million last year, making it the heaviest spender of any supermarket. As subsidiaries of German groups, neither Aldi UK nor Lidl UK publish detailed sales figures. But analysis of accounts and market share figures collected independently suggests that like-for-like sales, which exclude the effect of new store openings, are under immense pressure at both Aldi and Lidl. By comparison, sales declines at Tesco and Morrisons have been reversed. Where there are no openings of discount stores, consumers are switching back from Aldi and Lidl into the supermarkets.
Budget airline EasyJet is set to report a sharp fall in profits on Tuesday following a year of terrorist attacks at some of its key holiday destinations. The company was also badly hit by the slump in the value of the pound. Profit for the year to the end of September is set to be about £495million compared with £686million last year, a fall of nearly 28 per cent, though this was its third highest profit ever.
January bargain hunters are in line for disappointment, as Britain’s electricals giants prepare to unveil steep price rises after Christmas. The industry’s biggest names including Dixons Carphone and AO World, and upmarket department store John Lewis, are privately discussing double-digit price increases in order to absorb higher import costs caused by the pound’s post-referendum slump. Electrical retailers have been particularly hard hit after the pound’s drop in the wake of the EU Referendum as almost all their stock is imported. John Roberts, chief executive of AO, said that his online electricals retailer would be raising prices by between 4pc and 6pc next year. Retailers with high street shops are facing extra headwinds from rising rents and business rates, which will make them under greater pressure to pass on the costs. John Lewis had warned in the summer that the collapse in sterling’s value may feed through to costs next year. Fears about soaring costs and consumer confidence meant that shares in the country’s biggest electricals retailer, Dixons Carphone, tanked following the Brexit vote. Seb James, chief executive of Dixons Carphone, said they are of course having conversations with suppliers every day about prices and it is simple mathematics that the devaluation of the sterling is impacting those discussions currently for all companies doing business outside of the UK.
A crackdown by financial watchdogs on hire-purchase retailers is poised to trigger swingeing job cuts and store closures at furniture and electricals chain, Buy As You View, which has more than 500 staff across its stores and head office. The retailer recently fell under the control of Hayfin Capital, its lender, which is now preparing to cut most of its staff and pull out of large swathes of the country. Along with its biggest rival, BrightHouse, it has been hit by stricter controls on who it can provide high-interest finance to for electricals and furniture. More stringent credit checks imposed by the Financial Conduct Authority have ruled out some customers, while others have been put off by longer waiting times in stores causing a sharp fall in sales.
Healthy food chain Abokado has secured funding to grow its presence in central London in a bid to boost its turnover from £14m to £17m by the end of next year. The company plans to grow the number of its central London stores from 28 to 36 within twelve months, fuelled by a combination of operating cash and a £2.1m loan secured from the RBS. Abokado says its long-term goal is to operate more than 100 outlets, with a growing national presence. Abokado competes with chains including Itsu, Wasabi and Wagamama for an increasingly discerning customer-base. Recent research shows that 47pc of people in their late twenties to early thirties have changed their eating habits over the last year towards a healthier diet, along with 36pc of 35 to 55 year olds.
Email this article to a friend
You need to be logged in to use this feature.
Please log in here