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  • Daily business and finance update 7th March 2023

Daily business and finance update 7th March 2023

Starbucks’ UK commitment

Good morning. Japan could soon ‘disappear’ that’s according to a government adviser who made the comments following the news that in 2022 the number of births in Japan fell to its lowest level since records began in 1899. Last year, roughly twice as many people died as were born. Japan's population peaked at over 128m in 2008, and is now sitting at below 125m.

Big Stories

Starbucks’ UK commitment

The world’s biggest coffee chain announced that it would open 100 new UK stores in the next year as part of a Europe-wide investment programme. Starbucks already has over 1,000 locations in the UK, its fifth largest market. The £30m investment marks a change of heart from the company who last year had hired advisors to explore a possible sale of its UK operations. It comes as Starbucks announced total revenues in the country were up 37% in 2022 to £449.3m although profits dropped by 24% to £12.6m driven largely by staff pay increases.

Harrods booms

The luxury department store is confident of its performance despite the rising cost of living as “the rich get richer in a recession”, according to boss Michael Ward. Harrods is trading ahead of 2019 levels after being hit hard by the pandemic and a plunge in international shoppers. The global luxury market is forecasted to grow as much as 8% in 2023 amid concerns of a UK economic downturn. It comes as French luxury group Hermès had an “exceptional” 2022 with a 23% increase in sales and Louis Vuitton owner LVMH posted record profits last year.

China’s modest target

The world’s second biggest economy set a lower-than-expected economic growth target of around 5% this year. That’s under last year’s 5.5% growth rate and the lowest growth projection in more than 25 years. The news came at the beginning of China’s legislature’s annual gathering. Addressing the annual National People's Congress, China’s outgoing Premier, Li Keqiang, blamed the more modest goal on a number of headwinds, including global inflation, slowing trade and “external attempts to suppress and contain China.” The country’s military budget, meanwhile, got a 7.2% boost.

Swiss exit

US investor Harris Associates sold its entire stake in Credit Suisse ending ties with the firm after about two decades of ownership and piling further pressure on the troubled Swiss lender’s leadership. The investment was exited over the past three to four months, said David Herro, chief investment officer for international equities at Harris Associates, in an email. Harris Associates was the biggest shareholder in Switzerland’s second largest bank for many years, and halved its 10% holding toward the end of 2022 to 5%. Credit Suisse’s share price sank to a record low last week.

Elsewhere...

Coffee-ing up: Costa Coffee will raise UK staff pay for third time in a year.

Going down: A Revolut investor has written billions off its $33bn valuation, two years after the banking app became Britain’s most valuable start-up.

On the mend: The Barclays chief executive has completed treatment for cancer and is now in remission.

Shutting down: US asset manager Vanguard is set to close its financial planning arm in the UK after launching the service around two years back.

Cutting back: Morrisons is reportedly planning to ditch at least 83 property maintenance suppliers, which could put up to 1,000 jobs at risk.

Under investigation: The boss of one of the UK's largest business groups has stepped aside while an investigation takes place into complaints about his conduct at work.

Slashing prices: Tesla has cut the price on its two most expensive electric vehicles in the US, the fifth cut this year.

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Number Of The Day

2.4%

The increase in the UK gender pay gap in 2021 according to a new report by PwC. The UK's gender pay is 14.4% and has widened four times faster than other developed countries since the pandemic.

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