Morrisons Sales Slump 6.3% In Third Quarter

Morrisons has reported another big fall in sales as the supermarket sector scraps for market share amid the challenge from discounters.

The grocer posted a 6.3% drop in like-for-like sales in its third quarter to 2 November - a figure that hit 8% when the effects of fuel sales were included.

Morrisons said competition in the sector remained "intense" and it would take time for its pricing initiatives to help sales recover.

As part of a wider plan announced in March to invest £1bn in price cuts over three years, the company recently launched a new loyalty card scheme which promises to match prices at the hard discounters Aldi and Lidl.

There have been signs that the strategy is starting to pay off after closely-watched data from Kantar Worldpanel pointed to an improved sales trend.

Chief executive Dalton Philips said today: "Morrisons is meeting the challenges created by a period of intense industry competition and structural change with quick and decisive action."

He insisted the initiatives designed to help the chain recapture market share were showing some encouraging signs.

The like-for-like sales drop for the third quarter did represent an improvement on the 7.4% drop Morrisons endured in the previous six-month period.

The group, which trails market leader Tesco, Asda and Sainsbury's in annual sales, said it remained confident in its full year 2014-15 profit outlook.

It now expects underlying profit before tax to be in the narrower range of £335m-£365m versus previous guidance of £325m-£375m.

Such a performance would represent a halving of profit on the previous financial year.

The Morrisons share price rose more than 7% in early trading on the FTSE 100, with investors apparently encouraged by improving sales trends.

It had lost a third of its market value this year in advance of the trading update amid a wider sell-off of supermarket shares.

18.56 | 0 komentar | Read More

Banking Industry Competition Probe Ordered

A full market inquiry into banks has been ordered over fears the dominance of the largest lenders is stifling competition.

The Competition and Markets Authority (CMA) said its investigation would scrutinise the personal current account and small business retail banking sectors.

Sky News reported on Tuesday night how major banks had called off their efforts to stall the inquiry.

The UK's four largest banks, Lloyds, RBS, Barclays, and HSBC collectively supply 77% of personal current accounts in the UK - a market worth £8bn.

The 'Big Four' also control about 85% of all small and medium-sized business accounts, an industry worth another £2bn.

TSB says the market is not working for consumers

The CMA said there has been "very little movement" in their collective market share as the level of customers shopping around and switching current accounts is "low".

It blamed limited transparency in the sector and had previously suggested a banking comparison website as a first step to improving transparency and aid competition.

Video: 'Retail Banking Isn't Working'

Challenger banks, such as Metro Bank and supermarket lenders, have grown their customer bases but failed to make the impact that had been hoped for to aid lending to small firms in particular.

The seven-day switch initiative - to ease the amount of time customers would have to wait to change bank - has helped grow numbers changing their lender.

The spin-off of TSB from Lloyds and the looming flotation of Virgin Money may also help boost competition.

But the CMA said it was concerned about continuing barriers of entry and expansion in the banking sector, which limit the ability of smaller and newer providers to develop their businesses.

The investigation is tipped to take up to two years to complete.

The chief executive of the bank industry group the BBA, Anthony Browne, said of the probe: "All the banks will co-operate fully with any investigation.

"There are already substantial changes currently under way across the banking industry to strengthen competition."

But his view was not shared by some of the smaller players.

Paul Pester, chief executive of TSB Bank, said: "The big four banks have had a stranglehold on the market for far too long.

"TSB believes the CMA investigation should focus on achieving greater transparency in banking, along with more choice and competition, so consumers get a better deal."

Craig Donaldson, the boss of Metro Bank, said: "Competition in the UK banking sector is heavily distorted.

"No market where such a small number of players hold such a large percentage of the market share should be described as efficient or competitive."

18.56 | 0 komentar | Read More

Petrol Price Guarantees Demanded By Treasury

A failure by petrol firms and supermarkets to pass on the full benefit of falling oil prices to customers filling up at the pumps would be an "outrage", a Cabinet Minister has warned.

Treasury Chief Secretary Danny Alexander has demanded guarantees from fuel companies and distributors that they were doing all they could to pass on the price cuts to hard-pressed motorists.

Danny Alexander is seeking assurances on petrol prices

At a speech in Aberdeen, Mr Alexander said consumers felt petrol prices rise "like a rocket" when oil costs went up, but fall "like a feather" when they came down.

And he said people would "rightly be angry" if they felt prices were not coming down as much as they should.

Video: Chancellor On Petrol Prices

Brent crude slumped as low as $82 (£51) a barrel earlier this week, its lowest level in just over four years due to concerns about over-supply.

The Liberal Democrat frontbencher will say: "Especially in the current economic circumstances people would rightly be angry if they feel that pump prices don't fall as much as they should on the back of falling oil prices."

However, investigations into the failure to pass on the fall in the price of oil has been inconclusive.

Mr Alexander has written to the industry's major players "seeking their assurance that they are doing all they can to pass on the benefit of falling oil prices as quickly as possible".

He said: "When the price of oil falls, the public have a right to expect pump prices to fall like a stone, not a feather."

His comments came as Asda announced it would be cutting the price of petrol and diesel by 1p to 119.7pm and 123.7p a litre. 

Video: 'We Still Pay Too Much For Fuel'

Asda said it was the first time its petrol had gone under 120p a litre in four years.

It triggered a supermarket price war and Sainsbury's and Tescos quickly followed suit with 1p cuts of their own.

Motoring organisations were quick to say there was more then Government could do that just put pressure on oil firms.

RAC Foundation director Professor Stephen Glaister said: "It is encouraging that Mr Alexander shares the concerns of the nation's drivers but in a way he is passing the buck.

"The biggest driver of pump prices remains the Government. Well over 60% of the price is tax."

AA president Edmund King said: "They themselves could do more.

Video: Cuts: A Loss Leader Or Real Deal?

"First, policies to help strengthen the pound by just 10 cents against the dollar would double the potential for a 2p-a-litre fall in the price of petrol to 4p.

"Secondly, the Government's failure to introduce fuel price transparency, showing the relationship between oil, wholesale and pump prices, has helped no one."

Shadow chief secretary to the Treasury Chris Leslie said: "Of course it's right that drivers should benefit from falling oil prices with lower prices at the pumps.

"But since 2011 people have paid 3p more on every litre of petrol because the Lib Dems broke their promise and backed the Tories in raising VAT."

18.56 | 0 komentar | Read More

M&S Profits Up But Warm Autumn Hits Clothing

M&S has reported a 2.3% rise in half year profits but said its troubled clothing division was hit by an unseasonably warm September.

The retailer's latest results marked a 13th consecutive quarterly fall in underlying sales of general merchandise, which include clothing, while web sales fell more than 6% in the six-month period.

M&S said its margins improved in the first half, helping it drive underlying profits higher for the first time in four years to £268m and it signalled that shoppers should not expect discounting ahead of Christmas by raising its non-food margin projections.

The food business, which has been growing steadily against a backdrop of struggles elsewhere, continued to impress in the 26 weeks to 27 September with sales up 3.6%.

M&S Simply Food stores are helping drive profitability

M&S said the success of its Simply Food stores meant it was planning to open 200 new outlets over the next three years.

The company insisted that it had turned around womenswear - with sales rising 1.3% over five months and improved customer feedback.

It did not provide a six-month figure. 

Chief executive Marc Bolland told Sky News he was pleased by the performance, saying "style is back" and "wraps are in."

Mr Bolland, who took over in 2010, said the group was improving "step by step" but a new clothing team he set up in 2012 has so far failed to deliver a sustained increase in sales.

M&S estimated a 1.3% hit to clothing from "unseasonal conditions" in September - with the mild weather, also charted by rivals Next,  not helpful for shifting high-margin winter coats, knitwear and boots.

Mr Bolland has spent over £2.3bn to address decades of under-investment, overseeing the revamp of products, stores, a new website and marketing.

He said the disappointing internet sales figure was a consequence of the new website, which has cost M&S £150m.

Mr Bolland blamed a "massive change, moving to a new platform."

Shares in M&S, which were down almost a fifth over the past year ahead of today's results, rose 6.5% when trading began on the FTSE 100. 

18.57 | 0 komentar | Read More

Interest Rate Hike 'Knocked On The Head'

A slowdown in the UK's economic recovery means there is no prospect of an interest rate increase, according to a closely-watched report on activity.

The Markit/CIPS services purchasing managers' index (PMI) for October came in at a 17-month low with growth weaker than even the gloomiest forecasts had suggested.

The survey found that mounting economic uncertainty was hitting confidence, with stagnation in the eurozone, China's slowdown and the shaky recovery in the US all highlighted as factors.

Markit said a weakening of its composite PMI, which also took in the construction and manufacturing sectors, and an absence of inflationary pressure suggested that the Bank of England would wait to raise borrowing costs.

Its chief economist, Chris Williamson, said: "Slower service sector growth knocks the prospect of interest rate hikes firmly on the head.

"An increasingly downbeat flow of economic data in recent weeks ...has thrown a cloud of uncertainty over the outlook."

The report suggested Britain was on track to record GDP growth of 0.5% in the fourth quarter of the year - down from the 0.7% recorded in the previous three months.

The Bank of England said last month that it expected growth of 0.8% between October and December.

18.57 | 0 komentar | Read More

Christmas Costs 'Falling' Amid Price War

A retail industry body says Christmas shoppers are set to benefit as it charts falling shop prices, with food costs growing at their lowest level since at least 2006.

The British Retail Consortium's (BRC) shop price index for October, compiled by Nielsen, showed that the battle for customers between discounters and the major supermarket chains was reaping benefits for consumers.

It measured falls in the price of kitchen essentials such as milk, cheese and eggs for the first time since February 2010.

The BRC said convenience food was also cheaper than it was a year ago.

Total food inflation stood at just 0.1% in October, the lowest rate since the index began in 2006, after three consecutive months at 0.3%.

Overall, shops reported deflation for the 18th-consecutive month, accelerating to an annual rate of 1.9% in October from 1.8% in September as key agricultural commodity costs fell further amid market concern about the world economy.

The report said that in addition to that, discounts on clothes and electrical goods also continued to have an impact.

BRC director general Helen Dickinson said: "With the current competitive environment, retailers are passing most of these savings on to consumers.

"This should mean great deals for shoppers as they start stocking up on seasonal fare.

"As Christmas swiftly approaches, there is plenty of evidence to suggest that budgets will go a little bit further this year."

18.57 | 0 komentar | Read More

Primark Posts 'Magnificent' 30% Profit Rise

The chairman of Primark's owner has hailed a "magnificent" year for the discount clothing retailer, with profits rising 30% to £662m.

Associated British Foods (ABF) said the performances of its fashion and grocery divisions offset the adverse impact of lower prices in its sugars business, helping the group to achieve annual profits growth of 6% in the year to 13 September.

It also confirmed that Primark was shrugging off the effects of the current warm autumn weather, which has prompted rivals including Next to warn on profits, with sales for the first six weeks of its new financial year up 10%.

Annual sales at Primark, which now operates in nine countries, were 17% ahead of last year.

The results statement said: "This excellent result was driven by an increase in retail selling space, like-for-like sales growth of 4%, and superior sales densities in the new stores.

Primark opened its first French store in April

"The year was characterised by success for our autumn/winter and spring/summer ranges.

"Sales over the Christmas period were excellent and were boosted in the third quarter by warm weather, especially in the spring and early summer.

"We began trading in France in December last year and sales across all five stores have been exceptional.

"Eight years on from our initial entry into Iberia, this year's like-for-like growth achieved by our Spanish stores was particularly strong."

ABF chairman Charles Sinclair added: "We recently announced that the next new market would be in the north-east of the US, with the first stores expected to open late in 2015 and with up to 10 stores by the end of 2016."

Almost 400 people were killed in the Rana Plaza collapse

Primark also confirmed it had committed a total $12m (£7.5m) in compensation and other support to workers and families of the victims following the collapse of the Rana Plaza factory in Bangladesh last year.

The retailer said that while most of its Rana Plaza staff were making garments for its competitors when the building collapsed, it was "committed to meeting its responsibilities in full and to paying long-term compensation to the workers employed by its supplier or their dependants".

"The safety of the staff employed by our suppliers is a high priority," Primark said.

"We have now undertaken structural assessments of all of our supplier factories in Bangladesh.

"We further strengthened our in-country teams of ethical trading specialists who are critical in supporting sustainable improvements within supplier factories, and providing greater visibility across the supply chain.

"We conducted 2,058 audits in the last calendar year, and ethical trade training continues to be provided to every new Primark employee," the company added.

18.57 | 0 komentar | Read More

Virgin Money Flotation Is Back On Track

Virgin Money has confirmed it will go ahead with its stock market flotation, after postponing the listing last month.

The bank confirmed on Tuesday an earlier report by Sky News that it was now satisfied market conditions had settled amid volatility last month on global economic growth worries.

The company, backed by Sir Richard Branson, plans to raise around £150m from the sale of new shares, valuing the firm at up to £2bn.

Virgin Money chief executive Jayne-Anne Gadhia said in a statement that new Bank of England leverage rules set out last week had provided clarity for the UK banking sector, meaning the time was right to push ahead.

She said: "Given this and given more stable market conditions, we now plan to move forward with our IPO (Initial Public Offering) with the aim of being admitted by the end of November.

Ms Gadhia had previously stated that Virgin Money had performed strongly during its third quarter, winning a 4.5% share of new mortgage applications.

"Looking to the future, we have a powerful brand, a strong balance sheet, a strong core business franchise and considerable opportunities to continue to extend our product range," she said.

Virgin Group and WL Ross, a US-based investment vehicle, collectively own just over 90% of Virgin Money.

Bank of America Merrill Lynch, Barclays, Citi, Goldman Sachs and Keeffe Bruyette & Woods are working on the Virgin Money flotation.

18.57 | 0 komentar | Read More

Holiday Pay Should Include Overtime

Overtime should be taken into account when holiday pay is calculated, the Employment Appeal Tribunal has ruled.

The Employment Appeal Tribunal ruled on two cases against Hertel UK and BEAR Scotland, which related to the UK's interpretation of the Working Time Directive.

Workers for these companies claimed their holiday pay was less than it should have been because their employers did not factor in voluntary overtime completed in the period prior to time off.

Brian Gordon, managing director BEAR Scotland, one of the companies involved in the case, said they were "disappointed" by the decision.

He added: "We believe that this interpretation of the Working Time Directive is significant for all UK employers, public and private, and we will reflect on our position before considering how to respond."

Unions have welcomed the ruling, with Unite executive director Howard Beckett saying: "Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to.

"This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order."

Business groups, however, have described the ruling as a "blow" to business, with Confederation of British Industry director-general John Cridland warning of "punitive costs potentially running into billions of pounds".

He added: "Not all will survive - which could mean significant job losses.

"These cases are creating major uncertainty for businesses and impacting on investment and resourcing decisions.

"We need the UK Government to step up its defence of the current UK law, and use its powers to limit any retrospective liability that firms may face."

Tim Thomas, head of employment policy for manufacturers' organisation EEF, said firms will have little option but to factor the additional costs in to future pay negotiations and to reduce overtime, while one in four could cut jobs.

Some businesses had already prepared for the worst, with John Lewis setting aside £40 million to reimburse workers. 

Business Secretary Vince Cable said: "Government will review the judgement in detail as a matter of urgency."

He said a taskforce has been set up to discuss how to limit the impact of the decision for businesses, adding: "Employers and workers can also contact the Acas helpline for free and confidential advice."

18.57 | 0 komentar | Read More

HSBC Prepares For UK Forex Fines Of £236m

Banking giant HSBC has set aside almost £250m as it prepares itself to be hit with fines over alleged foreign exchange manipulation.

It said it has made a $378m (£236m) provision for potential penalties following an investigation by Britain's Financial Conduct Authority (FCA).

"Discussions are ongoing with the FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank plc's systems and controls relating to one part of its spot FX trading business in London," it confirmed.

"Although there can be no certainty that a resolution will be agreed, if one is reached, the resolution is likely to involve the payment of a significant financial penalty.

"We continue to cooperate fully with regulatory and law enforcement authorities in the UK and other jurisdictions."

Video: 1964: Banking For the Ladies

HSBC, Royal Bank of Scotland and Barclays have now set aside a combined figure of more than £1.1bn for potential FCA fines over currency-rigging claims.

US investigators are also likely to hit HSBC, Europe's biggest banking group, with settlement charges however it has not chosen to quantify those possible penalties.

In addition to the currency trading woes, HSBC also said it was setting aside around £370m for potential additional payment protection insurance (PPI) mis-selling in the UK.

Video: MP Talks About Forex Probe

It has also agreed a $550m (£340m) settlement with the US Federal House Finance Agency.

The bank also confirmed it had been summoned to appear before French magistrates over whether its Swiss private bank had helped French citizens to evade tax.

Early last month, Sky News City Editor Mark Kleinman revealed two key directors were quitting over tough new regulations that could see directors jailed over failed banks.

Video: The Cost Of Banking To The Banks

The news about the potential penalties comes as the bank released its results for the three months to the end of September.

Although total revenues were flat at $15.57bn (£9.7bn), adjusted pre-tax profit fell 12% to $4.4bn (£2.75bn) on the back of impairment charges that reached almost $1.7bn (£1bn).

Statutory pre-tax profit rose by just 2% on the 2013 figure, far below analysts' expectation of around 16%.

Video: Oddie Confronts HSBC Over Loggers

Shares were down in early trading before recovering.

Net profit for the period rose 7% to $3.43bn (£2.1bn), compared to the same period last year.

18.56 | 0 komentar | Read More