Below are our top 10 stories that you need to know about. Be sure to check our twitter page for regular posts of important headlines. Click on the links for full stories.
Opinion articles of the week:
The Chairman of HSBC argues that uncertainty is the biggest threat to the UK economy. Click here for the debate.
Are universal basic incomes a good idea? Click here for the debate.
Analysts argue that air pollution could harm the size of China’s economy by 2.5% by 2060. Click here for more.
1. HIGH STREET SALES FIGURES
High street retailers enjoyed a modest rebound in sales last month as shoppers stocked up on summer clothes, barbecue food and outdoor toys, according to industry figures.
The warm weather helped like-for-like sales rise 0.5% on the year in May, the British Retail Consortium (BRC) said. It brought some relief to retailers after falling sales in the previous two months, but the trade group said conditions remained tough.
“Clothing made a big comeback this month after suffering declines in April. This appears to be due to consumers waiting for just the right moment before embarking on their pre-summer spending,” said BRC’s chief executive, Helen Dickinson.
“However, with signs that the UK’s economy is slowing it’s unlikely that this is the beginning of a complete reversal of fortunes. The uncertain outlook means that customers will remain cautious with their spending, therefore we expect sales figures to remain volatile for the time being.” (The Guardian)
2. OIL SECTOR JOB LOSSES
The number of jobs lost as a result of the downturn in the UK oil and gas sector could top 120,000 by the end of this year, according to a report. Oil & Gas UK estimated 84,000 jobs linked to the industry went in 2015, with 40,000 losses expected this year.
It said the offshore industry supported 453,000 jobs at its 2014 peak – either directly, in its supply chain or in trades such as hotels and taxis. The new figures suggest 330,000 jobs would be supported by the end of 2016. The analysis was carried out by marketing services company Experian. Brent crude is currently trading at about $50 a barrel, less than half the price it was in 2014 when jobs linked to the sector peaked at over 450,000. (BBC News)
Royal Dutch Shell today announced that it has earmarked 10 per cent of its oil and gas production assets for sale, which would result in the oil giant exiting between five and 10 countries.
The company has previously announced plans to ditch around $30bn (£20.7bn) worth of assets by the end of its 2018 financial year in a bid to re-jig its balance sheet following its acquisition of BG earlier this year.
Shell also announced that it would aim to keep its capital investment between $25bn and $30bn per year until 2020, with the company currently pushing for expenditure at the lower end of the range because of persistently low oil prices.
The oil major’s £35bn takeover of BG has caused its balance sheet gearing position to shift from 14 per cent at the end of 2015, to 26 per cent at the end of the first quarter of 2016. A shift towards a higher gearing generally means a company is more vulnerable to knocks because it has less of a financial cushion to see it through bad times. (City A.M)
4. AMAZON FRESH
The next supermarket price war will be a London street fight. Amazon Fresh has finally made its foray into grocery retailing in the U.K. And the offer looks compelling. The U.S. giant will offer 130,000 products in 69 London postcodes. Crucially, it will offer delivery with as little as a four-hour window. Unlike in the U.S., where the service looks to be highly priced, the charge in the U.K. looks competitive.
True, to use Amazon Fresh you would already have to have a subscription to Amazon Prime, which costs 79 pounds ($114) a year, but brings other benefits. After that, it is 6.99 pounds a month for unlimited delivery — including the speediest options — for baskets costing more than 40 pounds. That’s more than what Tesco charges, but is cheaper than the other major players.(Bloomberg)
5. AMAZON INDIA INVESTMENT
Amazon has said it will increase its investment in India by $3bn (£2.1bn), bringing the total amount invested in the country to more than $5bn. The online retail giant announced a $2bn investment in India in 2014 and already employs 45,000 people there.
Chief executive Jeff Bezos said Amazon continued to see “huge potential” in India, its fastest-growing region. In 2014, the firm said India was on track to become its “fastest country ever” to achieve $1bn in gross sales. However, it faces competition from home grown e-commerce retailers Flipkart and Snapdeal. (BBC News)
Uber and two executives were fined by a French criminal court over claims the company’s UberPop ride-sharing service broke the law before it was suspended.
The court fined the company and executives a total of €850,000 (£665,000), half of which was suspended, at a hearing in Paris on Thursday.
French prosecutors had attacked Uber over fraudulent commercial practices, encouraging illegal activity and improper use of personal data. Uber has faced regulatory challenges in a variety of cities where it operates, from its birthplace in San Francisco to Munich, Stockholm and Mumbai. In France, regulators have focused their attention on the UberPop service, which it suspended in July last year. The service allows anyone with a vehicle and driver’s license to offer a taxi service, in contrast with Uber’s main chauffeured-car operation that requires registration with authorities. (The Independent)
6. SAINSBURY’S SALES FALL
Sainsbury’s has reported a fall in underlying sales, with the UK’s second-largest grocer warning the market remains “challenging”. Like-for-like retail sales – excluding fuel – were down 0.8% in the 12 weeks to 4 June as food price deflation continued to grip the sector. Total group sales rose 0.3% for the three months, with an “encouraging performance” from the bank.
Earlier this year, Sainsbury’s agreed a £1.4bn takeover of Argos-owner Home Retail Group, although last month the Competition and Markets Authority said it would examine the deal to see if it would lead to “a substantial lessening of competition” for consumers.
The UK’s big four supermarkets have been engaged in a price war as German discounters Aldi and Lidl expand rapidly in the UK. Sainsbury’s strategy has been to invest in improvements in stores and cut prices on everyday products rather than run promotions. During the three months Sainsbury’s ended its Brand Match campaign. (BBC News)
7. SPORTS DIRECT WAGE TROUBLES
Sports Direct’s founder Mike Ashley has admitted workers at its Derbyshire warehouse were paid below the minimum wage and its policy of fining staff for being late was unacceptable. HMRC is investigating the firm over the minimum wage issue, Mr Ashley told MPs.
An internal investigation had discovered “some issues” with working practices at the warehouse, which he had “hopefully” addressed, he said. The firm had “probably” outgrown his ability to run it, Mr Ashley agreed.
He said much of what he’d found out, after starting an internal investigation into how staff were treated at its Shirebrook distribution centre six months ago, was an “unpleasant surprise”. (BBC News)
8. VODAFONE ACQUIRES SKY NETWORK TV NEW ZEALAND
Vodafone said it was merging its New Zealand unit with the country’s biggest pay-TV firm, Sky Network Television in a $2.4 billion deal that will enable it to offer customers packages of entertainment, broadband and mobile.
The biggest deal in New Zealand this year will give Sky Network the chance to expand beyond its traditional satellite broadcast market, which has been shaken up by the arrival of Netflix and Apple online content service. Sky’s shares jumped nearly 20 percent.
Vodafone said the tie-up would enable it to offer Sky’s sports and entertainment programming to its mobile and fixed-line subscribers who increasingly wanted to access more content and communications from a single provider. Under the terms of the deal announced on Thursday, Sky will buy the mobile phone provider for NZ$3.4 billion ($2.4 billion) in total.
Mobile operators and cable and satellite pay-TV groups in Europe, the United States and elsewhere are scrambling to tie-up so they can offer “quad play” packages of mobile, fixed-line, broadband and TV service. (Reuters)
9. GUYS HANDS DROPS LEGAL DISPUTE WITH CITIGROUP
Private equity tycoon Guy Hands has dropped his legal battle with investment bank Citigroup over his firm’s takeover of EMI in 2007.
The founder of private equity firm Terra Firma had sought damages of £1.5bn alleging that the US investment bank misled him over the deal.Citigroup denied the allegations.
Terra Firma bought the record company, whose roster included the Beatles, for £2.4bn shortly before the financial crisis hit. The private equity firm has also agreed to pay all the US investment bank’s costs. (BBC News)
10. RALPH LAUREN CUTS 1,000 JOBS
Ralph Lauren will cut 1,000 jobs, or 8% of its workforce, as part of a cost-cutting drive.The US fashion brand also planned to close more than 50 stores and simplify its management structure.
Ralph Lauren said the measures should save between $180m (£124m) and $220m a year. Last year Ralph Lauren, who founded the company, stepped down as chief executive and was replaced by Stefan Larsson. The cuts are the first major move for the new boss, who is credited with turning around the fortunes of Gap’s low-end brand Old Navy.
The new savings will come on top of $125m of cuts made by Ralph Lauren last year. It expected to incur $400m in restructuring charges this year as well as $150m of costs relating to stock reduction.
The luxury sector has been hit by declining sales in recent months. On Monday Burberry revealed that chief executive Christopher Bailey had taken a 75% pay cut following a slump in sales. But Ralph Lauren in particular has struggled to match its sales with its stockpiles of clothing and accessories. (BBC News)