Daily business and finance update 13th January 2023
Asos’ tough Christmas
Good morning. This week the UK's 50 best workplaces were revealed, according to review site Glassdoor. Consulting group Bain & Company won after employees praised the company’s culture, work-life balance and learning opportunities.
Big Stories
Asos’ tough Christmas
This week a batch of supermarkets chains and high street retailers have delivered solid Christmas results suggesting that Brits are still spending despite soaring energy bills and fears of rising mortgage costs.
But yesterday Asos numbers painted a different picture. The online fashion retailer reported an 8% drop in UK sales in the four months to the end of December blaming weak demand among its 20something customer base and delivery delays due to postal strikes.
The company said it will cut costs by £300m with plans to withdraw 35 unprofitable brands as well as slash office and warehouse space. It comes on top of a previous decision to decrease staff costs by 10% through a series of layoffs.
Energy bills fall prediction
Average household energy bills could fall below the government’s £2,500 energy price guarantee (EPG) by the summer, according to new research by Investec. The bank forecasts that by July a typical bill could be £2,478, £150 lower than original estimates. Wholesale gas prices spiked after Russia invaded Ukraine last February but have now fallen to pre-war levels after a warmer European autumn and winter and higher levels of gas storage. The EPG was introduced in October to subsidise household bills by protecting them from spiralling energy prices. The fall in wholesale gas prices will reduce the cost of the EPG to taxpayers by close to £1bn according to Investec.
US inflation cools again
New data released yesterday showed that US prices are rising at their slowest rate in more than a year. In December US CPI was 6.5%, a 0.1% drop on the month before and the lowest since October 2021 driven by falling petrol prices. Although inflation is still at a multi-decade high – and way above the 2% target - it has been on a downward trend for the past six months giving hope that it could have peaked. The US central bank has been hiking rates steeply in the past year to cool inflation but the latest data could mean it opts for less aggressive increases or pauses altogether.
Disney told off by investor over price rises
Activist investor Nelson Peltz has criticised Disney for overcharging customers at its theme parks. It follows other critiques from Peltz over Disney's lossmaking streaming business and low staff wages. Peltz’s firm Trian Partners owns 0.5% of the entertainment giant worth $900m and is angling for a seat on the board but has been rejected by Disney. In 2018 Peltz forced his way on to consumer goods group P&G’s board after a similar public battle with management.
Elsewhere...
Foreign attack: Severe disruption to Royal Mail's overseas deliveries has been caused by a Russia-linked ransomware attack.
Running out: Three million people across Britain ran out of credit on their prepayment energy meter last year, the equivalent of one every 10 seconds, Citizens Advice has said.
Festive food spree: Tesco and Marks & Spencer reported bumper Christmas trading figures suggesting the cost of living squeeze has yet to dampen consumer spending.
Cash recovery: Disgraced cryptocurrency boss Sam Bankman-Friedman says FTX customers could get their money back in statement published on Substack.
End of the road: Makeup brand Morphe has filed for bankruptcy.
Cut at the top: Apple’s CEO Tim Cook has taken a pay cut of over 40%, slashing his salary by about $35m.
Another fraud?: A 30 year-old entrepreneur is being sued by JPMorgan, which claims it was misled into buying her education startup for $175.
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Fact Of The Day
HMRC failed to collect £42bn in tax last year partly due to staff shortages.
