Daily business and finance update 4th September 2023
Octopus buys energy rival
Good morning. Today we're talking about Octopus Energy buying Shell’s energy business, Superdry’s tough summer and US jobs market data.
Octopus buys energy rival
Octopus Energy, a leading UK energy supplier, has agreed to buy Shell’s household energy and broadband business in the UK and Germany. The deal, which is worth an undisclosed sum, will see Octopus Energy take on 1.4m household energy customers and 500,000 broadband customers. The acquisition will make Octopus Energy the UK's second-largest energy supplier, behind British Gas. It will also give Octopus Energy a significant foothold in the German market. Octopus Energy is known for its innovative approach to energy supply. It offers a range of green energy tariffs and has been praised for its customer service. Shell is exiting the household energy market as part of a wider strategic review. The company said that it wants to focus on its core businesses of oil and gas production and refining. The deal is expected to close later this year, subject to regulatory approval.
Superdry’s tough summer
British fashion retailer Superdry has swung to a £148m loss for the year to April 2023, as the cost of living crisis weighed on sales. The company, which delayed the publication of its full year results due to "technical points", said sales fell by 10% in the fourth quarter. Superdry said it expects sluggish sales this year as the cost of living crisis continues to bite. The company has also been hit by a decline in tourist spending in the UK and the wet British summer dampened consumer demand. The retailer said trading continued to remain tough, reporting an 18.4% fall in sales in its first financial quarter to the end of July. Superdry has taken action such as implementing a £35m cost-cutting drive that has included head office redundancies and sold the rights to its brand in some Asia Pacific countries in a $50m deal with the South Korean firm Cowell Fashion Company.
US jobs market strength
The latest US jobs report suggests that the world’s largest economy is still growing, but at a slower pace than in recent months. In August the country added 187,000 jobs and the unemployment rate rose to 3.8% from 3.5%. The jobs market and other indicators are being closely watched by the Federal Reserve to see whether the economy is slowing down and inflation is dropping toward their target level. In July the central bank raised interest rates for the 11th time in under two years, bringing rates up to a range of 5.25% to 5.5%, making mortgage rates and other loans more expensive. The Fed wants to achieve a soft landing, that is bring inflation down to 2% without a recession. Inflation has dropped from 9.1% to 3.3% in July, but economists say there is still more to go and the full effects of the rate hikes have not yet been felt.
Retail protection: Frontline Tesco workers will be offered body cameras following an "unacceptable" spike in verbal and physical attacks.
RIP: Mohamed Al Fayed, the Egyptian-born businessman who owned the department store Harrods, has died aged 94.
Property slump: House prices are 5.3% lower compared to August last year in the biggest annual decline since 2009, according to Nationwide.
Number of the Day
How much bigger the UK economy was in the final three months of 2021 compared to pre-pandemic levels, according to revised official data. The previous figures said that the UK economy was 1.2% smaller.
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