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Today's business and finance round up 14th September 2021

👕Primark sales slowdown but invests online

September 14, 2021

14th September 2021

Good morning Remember Houseparty? It’s the app that allowed you to play games with friends in a video chatroom that gained almost overnight popularity at the height of the pandemic. Well, its owner has announced that its shutting down next month as unsurprisingly, people are ditching it in favour of in-person interactions. 

Today's stories

  • Primark sales slowdown but invests online 

  • Apple court ruling could cost it billions

RETAILPrimark sales slowdown but invests online

What’s going on?Fast-fashion retailer, Primark, reported that revenue in the last three months had slowed down as the UK was hit by the spread of the Delta variant and the so-called pingdemic. The company also announced that it would be improving its online presence.

Why is this important?

Sales in the quarter to September were down 17% on the same period in 2019 and below management’s expectations. That was after a 3% increase in the quarter before when stores reopened from pandemic lockdowns suggesting that the pent-up demand for shopping may be tailing off. The surge in alerts from the NHS contact tracing app in June and July led to a rise in self-isolating. Primark said that this ‘pingdemic’ meant lower foot traffic in its UK stores. In Spain, the company’s second biggest market, the decline of foreign tourists also hit sales.However as UK self-isolation eased in August, Primark did see an improvement from a weekly decline in like-for-like sales of 24% early in the quarter to a drop of 8% in recent weeks.Primark has famously resisted selling its clothes online, believing that its ‘pile it high and sell it cheap’ business model won’t work in the digital space. But the company seems to be softening its stance. It announced that it will invest in its website so that customers will know what’s available in stores before they visit. TakeawayOnline retailers have proven to be more resilient than their high street peers during the pandemic as lockdown shut physical stores. With 24m social media followers Primark seems like the perfect candidate to transition to an online store.However its some way behind fast-fashion rivals like Boohoo and Asos when it comes to ecommerce. Updating its website for inventory checking is a start but is a far cry from a full-scale sales site. 

TECHApple court ruling could cost it billions

Last week a court in California ruled that Apple must allow other payment options for in-app purchases on iOS, a decision that could cost the tech giant billions of dollars.It all began last August when the creator of the popular “Fortnite” game, Epic Games, sued Apple over its App Store payment policies.Epic wanted to sell digital goods within its own game without having to pay Apple’s 30% in-app purchase commission.Apple has had a tight grip on in-app purchases since the creation of the App Store. In 2020 profit from this avenue was $15bn or 20% of the company’s total profit. After the court ruling, some of that will change. Apple will have to give all American developers options to advertise payment methods outside of the App Store from December. The decision could save app developers billions in fees.Apple’s shares fell 3% after the ruling, taking $80bn off its market cap. But don’t feel too bad for them, it’s still worth over $2 trillion.

Stat of the day

300 billion emails are sent every day

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