14th January 2022
Bite-sized business news from the UK and beyond
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Retail festive round up – High street report bumper Christmas sales
From bad to worse – Ovo Energy to cut a quarter of workforce
RETAILHigh street report bumper Christmas sales
What’s going on?A host of big name retailers released trading figures that showed that despite concerns over inflation and supply chains, the high street and British consumers had a good Christmas.
Why is this important?
Supermarkets benefitted from consumers staying away from pubs and restaurants in favour of treating themselves at home with premium food and drinks.Britain’s biggest grocer Tesco said it had the highest market share in four years as Christmas sales edged up 0.3% compared to 2020 or 9.2% compared to 2019.M&S enjoyed a 10% annual increase in food sales in the last three months of last year to £1.9bn or up 12.4% on pre-pandemic levels. Even the clothing division, which has been in decline for years, put in a strong performance as customers snapped up pyjamas and activewear.Online fashion retailer Asos reported a 5% increase in sales during the four months to December but said trading had been limited by weaker demand and supply chain constraints.The company also announced that it was moving from the junior market on the London Stock Exchange to the main market, something that will widen its investor base.
TakeawayGoing into December there were concerns that shelves would be empty due to the lack of lorry drivers and warehouse workers. Add to that the wave of Omicron cases and many wondered if Christmas 2021 would be even worse than the year before. Despite all this, retailers had a pretty solid trading period as people chose to treat themselves at home.But 2022 will be an even bigger challenge as all retailers warn that they’re facing rising cost pressures and supply chain challenges.
ENERGYOvo Energy to cut a quarter of workforce
It’s been a bad week in the office for Ovo Energy. On Wednesday the UK’s third largest energy provider was forced to apologise after it issued condescending advice to customers on how to save money on their bills including doing star jumps to stay warm.Then yesterday the company told staff that a quarter of them – 1,700 roles - would lose their jobs, in a bid to cut costs as the company fights to survive the ongoing energy crisis. Wholesale energy prices have increased fivefold in the past year. The energy price cap, which regulates how much suppliers can charge customers, has stopped suppliers from increasing prices to reflect their higher input costs. As a result 25 providers have gone bust since the summer.Industry experts predict that the price cap will almost double to £2,000 when it's next changed in April. Founded in 2009 as a challenger to the Big Six suppliers, Ovo tripled its revenue overnight to £4.5bn two years ago when it bought SSE's domestic energy business. The Unite union warned at the time that Ovo was taking on too much and says it will do all it can to prevent the redundancies.
Stat of the day
Last year London tech startups raised a record £18.6bn, making it the fourth-highest city for venture capital investment globally
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