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Sunday Retail News Roundup

Kraft Heinz turn screw on Unilever, Sainsbury’s boss on Kraft, Shoppers feel weight of inflation, Bill’s Restaurants serves up turnover leap, Business rates row grows, Brexit shopping bills cut, Supermarket giants attack medieval rates, Sainsbury's calls for fundamental reform, Dirty meat fears.


Sunday Retail News Roundup

Kraft Heinz turn screw on Unilever, Sainsbury’s boss on Kraft, Shoppers feel weight of inflation, Bill’s Restaurants serves up turnover leap, Business rates row grows, Brexit shopping bills cut, Supermarket giants attack medieval rates, Sainsbury's calls for fundamental reform, Dirty meat fears.

Sunday Times.

Kraft Heinz is poised to defy opposition to its £115bn takeover bid for Unilever by taking the proposal directly to shareholders of the consumer goods giant. The American food goliath will meet some of Unilever’s biggest investors over the next few days to test their interest in its $50-a-share offer. A clear indication that Kraft Heinz, backed by Warren Buffett and Brazilian private equity group 3G Capital, is serious about its pursuit of Unilever. Unilever HQ is in London and Rotterdam. Kraft Heinz has until March 17 to make a firm offer. The deadline falls two days after the Dutch election. Theresa May discussed the deal with the business secretary, Greg Clark, on Friday night. Clark has demanded a meeting with both companies. Unilever employs in excess of 7,000 people in the UK and Ireland, its shares surged on Friday, closing up 13.4% at £37.97. Kraft Heinz, advised by the American investment bank Lazard, is willing to change the structure of the cash-and-shares offer to include more of its stock. If successful, the takeover would be the second-biggest of all time. A tie-up of the two consumer giants would bring together brands including Hellmann’s mayonnaise and Heinz tomato ketchup. It would have sales of more than £64bn, making it the second-biggest in the sector after Nestlé.

Mail on Sunday.

Sainsbury’s boss expects competition authorities to have a ‘field day’ after it emerged on Friday that the US owner of Heinz was trying to buy consumer goods giant Unilever. Sainsbury’s chief executive, Mike Coupe, said Unilever is their biggest supplier. Supermarkets are portrayed as having a disproportionate amount of power in supplier relationships. Critics miss the point that Unilever, Procter & Gamble, Nestlé and Coca-Cola are massive monoliths many times Sainsbury's size and making massive profits. The group would have larger sales than Tesco and more than twice those of Sainsbury’s. Unilever said the offer of about £40 a share ‘fundamentally undervalues’ its business and that it ‘does not see the basis for any further discussions’. Chicago-based Kraft Heinz admitted there was no certainty of a deal but implied it would pursue the plan.

The UK economy grew faster in the final quarter of 2016 than initially thought, but economists feel it could be the last hurrah. The Office for National Statistics will say on Friday that it grew 0.7 per cent, slightly quicker than its first estimate of 0.6 per cent. But retail sales figures last week showed a marked slowdown in shopper spending in January and economists believe inflation, caused by the pound’s fall since the Brexit vote, may now affect growth.

Bill's Restaurants served 5.8 million eggs and 468,000 avocados to 7.5 million customers last year as the chain continued its rapid expansion across Britain. The casual dining high street brand, majority-owned by millionaire restaurateur Richard Caring, saw turnover jump 21 per cent to £111 million in the year to July 31, 2016. Just filed accounts show pre-tax profits at the 75-strong chain up from £6.6 million to £7 million. Last year nine new outlets were opened at locations including High Wycombe, Greenwich, Sevenoaks, Birmingham and Leeds. Chief executive Mark Fox, who left Starbucks to join Bill’s last year, said 2016 had been ‘a strong year’ for the company.

Wales scraps appeals process and Westminster is urged to follow lead. Communities Minister Sajid Javid was under mounting pressure to reverse the Government’s business rates reforms after it emerged Wales had scrapped the most controversial features of the system. Former Chancellor George Osborne granted powers to the Welsh Government to vary the new system and it regards the latest rules as an ‘England-only’ plan. The split centres on the new appeals system for rates bills, known as Check Challenge Appeal, and critics have already warned this will delay companies getting their bills corrected and may put many firms off complaining at all. The Welsh plans will further enrage businesses in England, where complaints about the system reached fever pitch last week. The first revaluation of rates bills in seven years means many firms have witnessed extreme changes to their bills following the last review. Business lawyers claim the new appeals system could even be illegal because it allows a margin of error in the assessment and they argue this means appeals will be thrown out even if the rates bill in question is wrong.


British households could save up to £300 on their annual shopping bill after Brexit because a tariff on non-EU goods will no longer apply, a Eurosceptic campaign group has said. New Zealand lamb chops will cost around £1.45 less and Thailand prawns 36p less, according to analysis from Leave Means Leave. The price of imported breakfast staples are also estimated to fall, with certain honeys becoming 17 per cent cheaper and peanut butter becoming 13 per cent cheaper. Owen Paterson, the former Tory environment secretary, said the average household could save £300 a year and that once Britain is “free of the dead hand of the EU” people will benefit from “cheaper food” and a “genuine green revolution”. However critics warn an expected rise in inflation and the possibility of new tarrifs on EU goods, including food, could have the opposite effect.

The heads of two of the UK’s biggest supermarkets have called the business rates system “medieval” and accused the Government of laziness in tackling reform. The system has come under fresh attack in the run-up to the first rates revaluation in eight years in April, which will mean retailers will have to find an estimated extra £2.25bn over the next five years. Retailers warn that the property tax will threaten smaller businesses and stall investment. Andy Higginson, chairman of Morrisons, believes business rates were “a medieval tax that have past its sell by date.” Mike Coupe, chief executive at J Sainsbury, argued that the system “is flawed and need to be replaced with one more relevant to the world we live in.” Sainsbury’s rates bill was far higher than its corporation tax bill and close to equalling its entire profits. The grocers’ outrage comes despite analysis from business rates consultants showing that the largest superstores will enjoy a £39.9m reduction in their rates bills over the next five years.


The chief executive of Sainsbury’s has waded into the row over business rates, calling for “fundamental reforms”. Adding to mounting pressure on the government to reconsider the controversial levy, Mike Coupe said that the shake-up would reduce bills for online retailer Amazon while many of its high street rivals would face sharply higher bills. Sainsbury’s is facing a rise of almost £120m to about £500m, while Amazon will enjoy a lower business rates bill for most of its huge warehouses, according to analysts. The rates overhaul is linked to the revaluation of properties that should take place every five years but was controversially delayed in 2015 ahead of the general election. The government has mounted a staunch defence of the changes after business groups including the CBI, British Retail Consortium and the FSB made a joint call to ministers to rethink the changes.

Audits carried out at more than 300 abattoirs in England, Wales and Northern Ireland find major hygiene failings in more than a quarter of meat plants. One in four slaughterhouses are failing to take basic hygiene precautions to stop contaminated meat reaching high street butchers and supermarkets. An analysis of government audits carried out at more than 300 abattoirs in England, Wales and Northern Ireland identified major hygiene failings in more than a quarter of the meat plants. The failings could expose consumers to serious food poisoning illnesses such as E coli, salmonella or campylobacter.

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