Today's business and finance round up 14th September 2021
đPrimark sales slowdown but invests online
14th September 2021
Good morning Remember Houseparty? Itâs 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.Â
Today's stories
Primark sales slowdown but invests onlineÂ
Apple court ruling could cost it billions
RETAILPrimark sales slowdown but invests online
Whatâs 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 managementâs 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 âpingdemicâ meant lower foot traffic in its UK stores. In Spain, the companyâs 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 âpile it high and sell it cheapâ business model wonât 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 whatâs 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.Â
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 âFortniteâ 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 Appleâs 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 companyâs 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.Appleâs shares fell 3% after the ruling, taking $80bn off its market cap. But donât feel too bad for them, itâs still worth over $2 trillion.
Stat of the day
300 billion emails are sent every day
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China tech shares slide on latest internet curbs
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