Today's business and finance round up 8th December 2022
🔗Greenlight for UK’s first coalmine for 30 years
8th December 2022
Bite-sized business news from the UK and beyond
Greenlight for UK’s first coalmine for 30 years
Moonpig slashes forecasts as customers cut back
ENERGYGreenlight for UK’s first coalmine for 30 years
What happened?Yesterday the government gave the go ahead for a new £165m coalmine in Cumbria, the UK’s first in three decades.The decision is controversialLike many countries the UK has committed to net zero emissions by 2050 in a bid to avert a climate change disaster. Environmental campaigners argue that new fossil fuel development will counter this objective as coal is the most polluting energy source.The new mine could release as much pollution as 200,000 cars according to think tank Green Alliance.But supporters claim it will boost the economyThe mine is expected produce around 2.8m tonnes of coal a year and create 500 jobs. The mine will extract coking coal that will be exported for making steel, rather than for electricity generation. Coal is the top source of electricity generation worldwide but is close to being phased out in the UK. However some use has been continued due to gas shortage fears since the war in Ukraine began.Zooming out: There are concerns that the coalmine could damage the UK’s climate reputation on the global stage and could be viewed at a backward step in the fight to cut emissions. This announcement comes the same week that the International Energy Agency projected that renewables will top coal as the No. 1 source of power generation in the world by 2025, with twice as much renewable capacity created from 2022-2027 than in the 5 years before.
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RETAILMoonpig slashes forecasts as customers cut back
What happened?Yesterday online card retailer Moonpig reduced its annual revenue target by £30m to £320m saying that customers are buying cheaper gifts: “In particular sending prosecco to their loved one instead of champagne.”How did we get here?Founded in 2001, Moonpig grew rapidly during Covid lockdowns when the high street closed and consumers switched to online gift exchanging. In May the company bought the gift experience group Buyagift for £124m jumping on the growing trend of gifting activities rather than physical products. But the company is now taking steps to weather a series of challenges:
The reopening of the high street has increased competition for cards and gifts. Moonpig says it’s built customer loyalty by sending reminders around key dates like birthdays and anniversaries.
The cost of living crisis means customers are spending less by buying cheaper items. The company said it’s focused on offering more gifts in the £10 to £15 range to support sales.
The disruption to orders caused by repeated Royal Mail strikes has dampened consumer confidence during the critical Christmas trading period. There’s little Moonpig can do to mitigate this as switching to another distributor is a big change and could easily go wrong.
Zooming out: In February 2021 Moonpig listed on the London Stock Exchange with a valuation of £1.2bn in one of the biggest debuts of that year. However since then investors have become more pessimistic on the company’s outlook with shares plunging by two-thirds.
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