Today's business and finance round up 21st January 2022
Primark owner shakes up management with job cuts
21st January 2022
Bite-sized business news from the UK and beyond
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Today's stories
Primark owner shakes up management with job cuts
Top investor scolds Unilever’s ‘near death experience’
RETAILPrimark owner shakes up management with job cuts
What’s going on?Yesterday Associated British Foods, owner of Primark, announced 400 management roles are being slashed across its British stores as part of a revamp of its senior team.
Why is this important?
Primark is on a mission to simplify its operations and give employees more room for career progression. It plans to phase out shop floor roles like supervisors and create a new entry-level management role. Overall it expects to cut 400 jobs across its 191 UK locations, which currently employ 29,000 people.The company says the changes will improve accountability and increase management support in store.The news came as Primark announced trading numbers for the quarter to 8 January with UK sales up 36% compared to a year ago but down 11% compared to two years ago.The emergence of Omicron towards the end of 2021 saw customers retreat from the high street and back to online shopping – unhelpful to Primark which doesn’t have an ecommerce website.On that front it also announced that it was launching a new customer-facing website in the UK by the end of March.It said the site "will showcase many more of our products and will provide customers with product availability by store".
Zooming outThe jobs cuts will not only streamline Primark operations but also help it keep a lid on costs. Unlike rival clothing retailers M&S and Next, it’s committed to not raising prices despite cost pressure from 30-year high inflation.
CONSUMERTop investor scolds Unilever’s ‘near death experience’
Yesterday consumer giant Unilever experienced one of the worst things that can happen to a listed company - getting publicly told off by one of your top shareholders. Investor Fundsmith, which holds £800m in Unilever shares, launched a scathing attack on management, calling the failed £50bn bid for GSK’s consumer arm (maker of Aquafresh, Sensodyne and Panadol) a “near death experience”.Earlier this week Unilever, which owns a suite of brands including Marmite, Dove and Cornetto, confirmed that it would not increase its offer after three rejected attempts.Fundsmith issued a “postmortem” letter to investors where it compared getting information out of Unilever to “a dentist pulling a back tooth”. It also argued that the company uses too much jargon and has an unclear strategy of which businesses to buy.It’s not the first time Fundsmith has blasted the company. In the past it’s criticised missed sales and profit targets and poor share price performance. In the past year Unilever shares have fallen 20% versus the FTSE 100 that has risen 13%.So where does Unilever go from here? Boss Alan Jope will be under pressure to prove that his plan of buying companies in the health, hygiene and beauty sector is the right one at a strategy update next month. But if investors aren’t sold then you can expect to hear more attacks from the likes of Fundsmith.
Stat of the day
UK consumers bin £1.2bn of food a year
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