Daily business and finance update 6th January 2023
Early signs Christmas wasn't so bad for the high street
Good morning. Tokyo is too popular for its own good with the Japanese government willing to pay families 1m yen per child (£6,300) to leave the city in 2023. The goal is to repopulate villages and municipalities that have been economically decimated by urbanization over the last decade.
Surprising Christmas for retailers
Yesterday the first wave of post-Christmas trading updates from high street retailers revealed that Brits had splashed out over the festive period, despite concerns the cost of living squeeze could dampen spending.
Fashion and homeware retailer Next said that Christmas sales were better than expected. The group had been forecasting a year-on-year drop of 2% in full-price sales for the nine weeks to December 30. Instead, sales rose by 4.8%.
Baker Greggs saw sales in the past three month rise by 18.2%, implying that, despite rail strikes, general retail footfall was fairly resilient during the period. It’s planning to open 150 shops in 2023, and is extending opening hours across many of its branches.
Discount chain B&M reported “very good performance” during the quarter across all UK product groups, “both in grocery and general merchandise.” Group sales were up by 12.3% year on year and it plans to pay a special dividend in February.
All companies were cautious over what 2023 would hold with the view that tough times are ahead for British consumers.
Car sales hit 30 year low
Last year the number of new cars sold in the UK fell to the lowest level since 1992. Data from industry body SMMT showed around 1.61m new cars were registered in 2022 - 2% down on the previous year and 25% below the pre-Covid level. Meanwhile, demand for electric cars continued to rise and they made up almost a fifth of new sales. Pandemic related supply chain issues, which have blighted the sector for the past three years, are starting to ease said the SMMT.
Amazon cuts back
The ecommerce giant is laying off more than 18,000 employees in the latest sign that a tech slump is deepening. CEO Andy Jassy announced the move in a memo to staff Wednesday, saying it followed the company’s annual planning process. The cuts, which began last year, were previously expected to affect about 10,000 people. The reduction is concentrated in the firm’s corporate ranks, mostly Amazon’s retail division and human resources functions like recruiting. There was no word on how many of the company’s 75,000 UK staff would be affected. With a 1.5m workforce, Amazon is one of the world’s largest private sector employers.
Tech conference back in full swing
The Consumer Electronics Show, the world's largest tech conference, kicked off in Las Vegas yesterday, with 100,000 people and 3,000 exhibitors expected to attend the four-day event - the highest participation since the pandemic. The annual show-and-tell event, which began in 1967, allows companies to preview their latest innovations while setting the stage for the year's biggest trends in tech. Some of the quirky ideas on display include digital tattoos, fitness training for dogs and smart bird feeders.
Labour's vision: Keir Starmer set out plans for a post-Brexit ‘take back control bill’ if Labour wins the next UK election.
Wrong side of the law: Meta’s New Year kicked off with a $410m fine from the EU over data privacy breaches.
Search engine 2.0: Microsoft is reportedly integrating AI bot ChatGPT into its Bing search engine.
Staying public: The government has confirmed that it's scrapping plans to privatise Channel 4.
Sinking profits: Samsung said it expects its worst fourth-quarter profit in eight years amid a sharp decline in global demand for memory chips and smartphones.
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Fact Of The Day
The government has revealed that UK taxpayers won't recover £990m of Covid funds lost in fraudulent or erroneous grants paid to supposedly struggling businesses during the pandemic.