Next week sees vital trading updates from both Tesco and Sainsbury’s as the battle to gain the initiative in the UK’s supermarket wars continues.
Tesco announces its latest trading update on Monday as it fights to win back shoppers lost over the last six months. It is expected to reveal a fall of 1.7 per cent in like-for-like UK sales in the quarter to May 26th. The trading update will not include the Diamon Hubilee Bank Holiday period.
In January Tesco announced its first profits warning for 20 years following a disappointing Christmas trading period where it lost ground to rivals such as discount grocers Lidl and Aldi. This led to its share price falling to a three-year low and this has not recovered so far.
Since then, the head of UK operations, Richard Brasher has left, leaving Chief Executive, Philip Clarke to lead the fight back. Mr Clarke decline his bonus for 2011 because of Tesco’s poor performance.
However, the update on Monday is expected to show Tesco has not been successful in winning back the lost ground through the heavy discounting strategies and a £1 billion recovery plan that has been the strategy in the opening months of 2012. This will increase the pressure on Mr Clarke whose strategy to improve the supermarket's performance has involved hiring more staff, especially for fresh produce sections and revamping many of its stores.
Meanwhile, Sainsbury’s is expected to have had a successful trading period over the Queen’s Golden Jubilee holiday that will be illustrated when it announces its trading update on Wednesday which will be for the 12 weeks to June 9th. Its chief executive, Justin King will reveal just how much party food, champagne and bunting sales the supermarket moved over the long weekend,
Sainsbury’s is expected to announce like-for-like sales growth of just under two per cent, slightly down on the 2.6 per cent increase reported for the previous quarter. Tesco is expected to announce a 1.5 per cent fall in UK like-for-like sales, though group sales should increase by around 2.5 per cent. Its trading period will not include the Golden Jubilee Bank Holiday.
Asda delivered sales growth of 2.2 per cent in its last reported quarter
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Retail round up - The Sunday papers - Retail Bulletin
You are here: Home | News | Retail round up - The Sunday papers
Battle for Croydon's Whitgift between Westfield and Hammerson could end with compulsory purchase order, Gordon Ramsay puts 4m into restaurant empire, House of Fraser closes final salary pension scheme, Diageo considers Hong Kong listing, Sainsbury's out-trades Tesco on UK food sales, OFT demands hit dozens of Groupon's small business clients, Mulberry thrives as it spreads roots overseas, M&S and Tesco draw up banking battlelines, Top stores condemned for letting you gamble on shopping, Mulberry profits jump by 50pc as sales rocket, 'Tap and go' payment systems for all post offices, Price war threat to profit for Tesco and Morrisons, Wave of half-price summer sales soon as rain hits High Street, M&S boss Marc Bolland boosts 2.5m pay packet by 500,000, Ex-wife sues Poundstretcher boss over AIDS 'Ponzi' scheme, Blackstone bid for Tiger Tiger, Sales continue to fall at Tesco, Topshop bags a Burberry hotshot
Sunday Telegraph
Westfield has warned that its row with Hammerson, over the future of the Whitgift shopping centre in Croydon could end with one of the rivals being taken out by a compulsory purchase order. The south London town has become an unlikely battleground for two of the world’s biggest property developers because its transport links and proximity to central London mean it is seen as an ideal location for the UK’s next super-mall. In an interview with The Sunday Telegraph, Westfield’s director of development, John Burton, said the company was “ready to spend £1bn on the site”, adding: “We have the balance sheet, the people and the ideas. I hope reality prevails.”
Gordon Ramsay has injected almost £4m of his own money into his restaurant empire following a damaging fallout with his father-in-law. The chef’s loan came as his companies suffered a pre-tax loss of £4.4m after he sacked Chris Hutcheson, his former business partner. The £3.8m payment takes the total value of his loans to the company to £9.2m. Last week it emerged that the family feud had cost Mr Ramsay at least £6m in the past year. Accounts filed at Companies House show that over the year to August 31 2011, Kavalake — which includes restaurants such as the Savoy Grill and Gordon Ramsay at Claridge’s — was faced with “reorganisation costs” of £2.4m as a result of the split.
House of Fraser has closed its gold-plated pension scheme to staff in an attempt to strengthen its balance sheet. The retailer, which last year refinanced its bank debts with the issue of a £250m bond, told employees that its final salary scheme had been brought to an end. It follows a near-trebling in the size of the group’s pension deficit, from £31.7m at the end of January 2011 to £85m at the end of January 2012.
Diageo, the world’s biggest drinks company, has admitted for the first time that it has studied a potential listing on the Hong Kong stock exchange as it continues to cement its Asian expansion. Paul Walsh, the chief executive, said listing on a stock market in one of the developing regions was something Diageo’s board “do and will continue to consider” as it extends its global footprint.
Independent on Sunday
The diverging performance of Britain's two biggest food retailers will again be laid bare this week, when Sainsbury's posts underlying sales ahead of Tesco in the UK. Market-leader Tesco is set to deliver a fall of 1.7 per cent in UK like-for-like sales in its first quarter to 26 May, which will reinforce the pressure on chief executive Philip Clarke. In contrast, Sainsbury's trading period covers the entire Jubilee bank holiday, so its chief executive Justin King will be quizzed on the country's patriotic spending splurge.
Dozens of entrepreneurs who use Groupon to drum up business have seen trade disrupted ahead of an Office of Fair Trading deadline for the online deals giant to clean up its act. In March, an OFT investigation found that there were "widespread examples" of consumer protection breaches and gave Groupon three months to implement six undertakings that would ensure that claims made on the website were fair and accurate.
Mulberry is set to flesh out its international expansion plans, as the fast-growing luxury brand posts a sharp jump in annual profits this week. The results will see new chief executive Bruno Guillon – the former managing director of the fashion house Hermès France, who joined Mulberry in March – make his first comments on his strategy for the group. Mulberry, arguably best known for its Alexa handbag named after TV presenter Alexa Chung, is forecast to deliver a 54 per cent leap in pre-tax profits to £35.4m for the year to 31 March. That was driven by storming sales in the UK and emerging markets, including Asia and the Middle East.
Marks & Spencer Money which has announced plans to open 50 bank branches within M&S stores will not be offering mortgages, for the time being at least. The plan was announced last week and it was initially reported that M&S Money would be offering a new current account and mortgage service. But a spokesperson said: "There are no plans to launch a mortgage product now or in the foreseeable, we want to get the current account right before we move into the mortgage arena."
Mail on Sunday
Britain's biggest high-street stores have been accused of preying on vulnerable families by encouraging customers to gamble on their online shopping.Boots, Sainsbury's and Asda are among the 150 well-known retailers that offered their internet customers the chance to win their shopping by placing a £1 stake on the spin of a roulette wheel.Shoppers using the stores' own websites to buy everyday items are told they have an 'unbeatable way to win anything you want'.
Handbag brand Mulberry will this week report a surge in profits and is expected to map out ambitious plans for overseas growth. New chief executive Bruno Guillon, at the firm since March, will say profit rose by more than 50 per cent in the year to March to about £40million following rampant sales of about £175million. The company has opened new stores in Seoul, Tokyo and New York.
The Post Office has announced that all 11,500 of its branches are to get ‘tap and go’ payment systems to cut queues. Contactless card technology allows you to hold or tap an enabled debit or credit card at a terminal. Cash is debited, without needing a PIN. The Post Office says the move, which should be completed by the end of the year, will allow customers with MasterCard Paypass and Visa PayWave cards to make payments in seconds.
Supermarket profits are forecast to slump as the companies grapple with the twin pressures of food price inflation and an addiction to discounting. City sources have warned that profits at two of the Big Four chains are likely to fall in the current financial year. Market leader Tesco and Morrisons are both struggling with the huge changes in the sector, with the worst yet to come. Tesco is expected to say tomorrow that like-for-like sales in the first quarter fell 1.5 per cent.
The High Street is set for a wave of half-price summer sales after appalling weather hit the retail sector. Many retailers were disappointed that the Queen’s Diamond Jubilee celebrations failed to provide sufficient uplift. John Lewis said spending surged at its stores at the end of last week, but many other retailers have been left staring at mounting storeroom stocks that are unlikely to sell as the unseasonally poor weather persists.
Marks & Spencer boss Marc Bolland is expected to face mounting opposition to his pay after it emerged this weekend that he has been paid an extra £500,000 – just for staying with the business. The fixed payout was made on Friday and came in addition to £2.5million in pay and bonuses in the year to March. He also received £1.3million in shares yesterday as part of his compensation for leaving previous employer Morrisons.
It has been a turbulent year for Richard Kirk. Recently named as the new boss of Poundstretcher, he is still under the shadow of Peacocks, the budget fashion chain where he was chief executive when it collapsed in January crushed by £750million of debt. But now a new battle has opened up with an unexpected enemy – his former wife, Barbara. Mrs Kirk is now suing her ex-husband for £3million, claiming that he persuaded her to take part in a fraudulent ‘Ponzi’ scheme involving AIDS drugs for Africa in which the money put in by later investors was allegedly used to pay earlier investors.
Sunday Times
Blackstone,one of America’s biggest buyout firms has emerged as a surprise bidder for the bar operator behind the Balls Brothers and Tiger Tiger chains. The group, which also owns Jewel cocktail bars, wants to bring in a new backer to fund expansion and is expected to change hands for about £110m.
Tesco will report its third consecutive drop in domestic sales when it updates the market tomorrow. The country’s biggest supermarket chain is expected to deliver a decline of between 1.3% and 1.7% in first-quarter like-for-like sales, which compare stores that have been open more than a year.
Sir Philip Green has hired a Burberry executive to assist with his global expansion plans for Topshop. Justin Cooke, 31, has worked with Burberry for the past six years and is credited with helping shake off the brand’s tired image.
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Warning to motorists over private clampers - Watford Observer
Warning to motorists over private clampers
5:00pm Sunday 10th June 2012 in News By Ben Endley
A string of complaints from motorists charged up to £500 by private clampers has prompted Hertfordshire County Council to urge greater caution when choosing a parking space.
Hertfordshire Trading Standards has received numerous complaints about clampers operating in Watford town centre and across the county but says their activities are lawful as long as a number of conditions are met.
Signs must be prominently displayed warning drivers that clamping is in operation and telling them the maximum costs and the company involved.
Clampers must also be licensed by the Security Industry Authority.
Richard Thake, cabinet member for community safety, said: “"Authorised clamping on private land is not illegal and companies who carry this work out are entitled to charge motorists a reasonable fee to release as long as the clamping operation is properly signed.
“While we cannot stop these companies if they are operating legally, we would like to urge motorists to be extra careful when parking in areas they are unfamiliar with.
“Check the area for signs informing you if clamping is in operation and stick to the conditions that allow parking in the area.”
Anyone who has experienced clamping which they feel may have been unjustified or involved unfair charges should contact the Citizens Advice consumer service on 08454 040506 or visit www.direct.gov.uk/consumer to seek advice.
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Tesco continues to lose out to rivals - ITV
The rivalry between supermarket giants Tesco and Sainsbury's will be in focus this week when the pair issue trading updates.
Tesco is expected to suffer another bloody nose on Monday when it reveals it has continued to lose out to rivals despite heavy discounting and a £1 billion recovery plan.
The chain, which is the UK's biggest supermarket with 2,800 stores, is fighting to win back shoppers after dire trading led to its first profits warning in 20 years, while its shares recently hit three-year lows.
Chief executive Philip Clarke, who recently declined his bonus because of the poor performance, has launched a recovery plan that has seen the grocer focus on revamping stores, hiring more staff and sharpening pricing.
Source: www.itv.com
Josh Berger on Leavesden film studios: Harry Potter's new chamber of secrets - The Guardian
If you want to imagine, look up. Ten minutes by car from Watford Junction station stand nine film studio stages, cathedrals to creativity: the brand-new Leavesden Studios. Built in 18 months, they dwarf the visitor paying homage in an ersatz Hollywood golf buggy. The 81-hectare studio lot they are part of is the new British home of Warner Bros, a facility so large that it is one-and-a-half times the size of the company's studios in Burbank, Los Angeles.
Josh Berger, the president and managing director of Warner Bros in the UK, Ireland and Spain, is the man wielding the metaphorical hard-hat and shovel at a site 15 miles north of London that officially opens for bookings on Monday. Now a division of Time Warner, Warner Bros has a connection with the UK that dates back to the shooting of pictures at Teddington from the late 1920s onwards – but took off in its modern form once the studio obtained the rights to JK Rowling's Harry Potter series in 1998 and agreed to her request that the books be filmed here.
The 45-year-old American, who has been in Britain for 16 years, fits the stereotypical image of a Hollywood producer, with flattery and bonhomie on tap; he is a not unfamiliar figure at the Ivy, always eager to acknowledge the presence of others in the London restaurant popular with media suits and celebrities.
During his tenure, the 94-year-old US company's British presence has grown. Warner Bros owns Waterloo Road producer Shed Media (a group including Wall to Wall and Twenty Twenty Television), has sniffed around Big Brother's maker, Endemol, and owns two British video games developers. Even last year, with the Watford operation yet to open, it part-shot seven movies here, including scenes for The Dark Knight Rises.
The "irony", says Berger, is that it took eight Potter films and a total box office gross of $7.7bn for Warner Bros to buy Leavesden Studios, where the films were shot, in November 2010. The Hollywood studio paid the property group MEPC £22m before rebuilding the site. "How often have you seen over £100m invested in the UK in a time of recession?" Berger asks; the facility also has an underwater stage, three smaller TV studios and "one of the most extensive back lots in Europe" for outdoor scenes.
Leavesden was once a Rolls-Royce engine factory, but films, Berger reckons, are the new manufacturing: "We're employing 400+ people on site, plus an estimated 300-500 per production. You can see how this rolls out into the community. Go and talk to the local taxi company: they know when we're busy, when we're quiet." Keeping a site with the capacity to film two blockbusters at once busy will be Warner Bros' challenge. It helps that next door is the Warner Bros Studio Tour – a £28-a-ticket celebration of the movie versions of the Harry Potter novels that showcases the films' sets, designs and techniques, from prosthetics to green screens. Able to cope with up to 5,000 visitors daily, this is "definitely not" a theme park – and of course the rights to create Harry Potter theme parks have been licensed to Universal Studios, a rival to Warner Bros. Visitors to the US theme park will get "a noisy American" experience, with "claptrap", says Berger, noting that "Harry Potter fans are very passionate people. The experience here is a emotional one, to be in the actual Great Hall, to be in Diagon Alley. It's more of a British experience."
Yet he insists that the visitor centre is not intended to offset the risk of the studio business, arguing these were "two separate investment decisions". He praises the tax break regime for British films set up by Gordon Brown, a rebate worth 16% to Warner Bros on large productions, for providing a "great service" to companies such as his. "Now it really goes to film-makers, the tax credits go to production companies who shoot here, and it creates an environment that makes it favourable to continue to invest," he adds.
Even though it faces competition from Pinewood Studios, 17 miles away down the M25, Berger reckons the company can profit from the increase in British studio capacity. "Our business has been resilient and historically counter-cyclical," he contends optimistically. There has been a shortage of capacity in the UK – Pinewood has reported high utilisation in recent years – but it helps that Berger has a Hollywood studio behind him in his mission to fill the space.
However, his most important argument in defence of his adopted country is economic and cultural: "Look at what we've made, from Harry Potter to The King's Speech, the breadth of British cinema now, both commercially and from the creative point of view," he enthuses, pointing out that "you don't have to convince a US movie star to spend three months in London".
There is also a growing Anglo-American exchange of creative ideas to sustain future productions, and here Berger points to television, noting that "now we have planted our flag here" there are "close links between our British TV creators and our Hollywood-based TV production". A pilot of Bad Girls is being made for the US, and a second series of the UK version of Warner Bros' dating show The Bachelor will be on Channel 5 later this year, with Spencer Matthews from Made in Chelsea taking his pick of 24 women.
Asked about The Voice, which is made by Wall to Wall, Berger says "all the producers will sit down and work out how to continue to improve" in the light of the BBC1 talent show's softening ratings, a statement of the obvious that nevertheless alarms his PR department.
There is clearly interest in more Time Warner acquisitions in Europe, but he has no comment on debt-laden Endemol, for which Time Warner made an unsuccessful €1bn bid last year. Decisions about any move on ITV are taken by another Time Warner division, its channels business, Turner. So Berger has also nothing to say on this, although he points out that Turner hired the former RTL chief executive Gerhard Zeiler this year to oversee its international business. He describes Zeiler's appointment as "interesting".
Berger likes being asked whether he has been asked to apply to be BBC director general. Flippantly, I ask, isn't the pay so low it amounts to charitable work? "I'd rather do that for the Chickenshed Theatre," the north London "inclusive theatre" company that he chairs, he replies, which is his way of saying you can rule him out.
Anyway, Berger has quite enough to do. His job now is to find directors with large enough imaginations and producers with stupendous budgets to keep bosses in Burbank happy and studios in Hertfordshire busy.
Source: www.guardian.co.uk
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