Category Archives: Uncategorized

Find alternatives to plastic, take action now

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The chancellor’s announcement on Wednesday of an investigation into introducing charges on single-use plastics in the UK is an interesting prelude to the forthcoming EU Plastics in a Circular Economy strategy document due to be published next month.

Certainly, the implementation of a tax or similar measure could significantly reduce the UK’s contribution to the millions of tonnes of plastics waste produced globally each year.

But what about addressing the issue at source? We look to both the UK government and Brussels to more actively promote alternatives on a wider scale.

The EU plastics strategy, in particular, needs to take a holistic view as a crucial part of the answer to reducing plastic waste is using more sustainable materials in the first place. Plastic clearly has a valuable role to play in society today, but action needs to be taken to ensure that the amount used, where not essential to the product’s quality, is dramatically cut down.

We know that plastic can never achieve a circular value chain. It is made from a non-renewable resource and will virtually never biodegrade, which is why it can now be found in the deepest trenches of our oceans where it’ll probably remain forever. To encourage steps towards a circular economy, the grocery and packaging industries need to examine where plastics are currently being utilised, and whether alternative renewable materials such as cartonboard, which is compostable and easily recyclable, can replace them.

Measures need to be put in place to encourage the use of more sustainable materials. Taxation is one option and this was highly effective when the 5p charge was applied to plastic bags. Alternatively, finding ways to encourage the use of more sustainable materials could also see brands reducing the amount of plastic packaging they use.

A quick glance through a supermarket highlights many brands that use plastic packaging when they could turn to more sustainable materials. Take a look at some brands of tea bags, batteries, multipack drinks and stationery, not to mention lots of food products, all of which could be packaged in biodegradable or recyclable alternatives to plastic. The opportunity to achieve quick results and make a significant difference is huge.

We encourage brand owners to review the packaging they are using to identify where they could make a move to more sustainable materials. After 11 million viewers watched a blue whale mourn its newborn, poisoned by its mother’s polluted milk, and judging by the social media and news coverage, consumers clearly want action to be taken. Forward-thinking brand owners will surely already be reviewing their own environmental strategies in a move towards using more renewable and recyclable packaging. If they don’t, governments will act and consumers will vote with their wallets.

It is truly the responsibility of brands and manufacturers to embrace their environmental obligations. I hope to see them take action regardless of whether a UK tax or next month’s EU statement forces their hands.


Co-operative Group boss asks for massive pay cut

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The chief executive of the Co-operative Group has asked for a 40% pay cut because the job has become easier.

Chief executive Richard Pennycook says the business is now back “in calmer waters” and the reduction reflects the revised demands of the current job.

He told the BBC the pay cut was “by no means the main news”, which was the Co-op’s recovery, for which he credited his 70,000 staff’s “dedication”.

His base salary will fall from £1,250,000 to £750,000.

Mr Pennycook was finance director of the group, but took over as chief executive in 2014 when the former boss, Euan Sutherland, resigned after 10 months in the job.

His pay package was reported to be £3m.

In 2013, the Co-op was rocked by news that its bank had a £1.5bn hole in its capital. That was rescued by a group of investors and the Group retains a small stake in the bank.

The Co-operative Group, which comprises 2,800 food stores, 1,000 funeral homes and financial services, said it had made progress this year, with sales at both its food and funeral home businesses growing.

Profit was £23m for the year, down from £124m last year, when the figure was boosted by a one-off gain of £121m from selling parts of its business.

Sales in its 2,800 food stores grew 1.6%, to give a £250m profit.

At its funeral homes, which is the largest chain in country, profits were £78m and sales rose by 9.9%.

Group underlying profit before tax was £81m, up from £73m last year.

The Co-op said its convenience stores were outperforming the UK grocery market, because people’s shopping habits were changing as they made more frequent trips to buy food.

Earlier this week, grocery research firm Kantar reported that the Co-op’s sales had risen at their fastest rate since it bought rival Somerfield in 2011, climbing by 3.9%.

It plans to open another 200 funeral homes in the next three years, which will increase the size of its estate to more than 1,100 homes.


UK car manufacturing hits 10-year high in 2015

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Car manufacturing in the UK has hit a 10-year high, with more vehicles exported than ever before, according to the industry’s trade group.

The Society of Motor Manufacturers and Traders said almost 1.6 million cars were built in 2015, up 3.9% on 2014.

Nearly four out of five cars were exported, up by 2.7% on 2014, despite falls in sales to China and Russia.

But this was offset by economic recovery in Europe, where demand for UK-built cars increased by 11% in 2015.

SMMT chief executive Mike Hawes: “Despite export challenges in some key markets such as Russia and China, foreign demand for British-built cars has been strong, reaching record export levels in the past year.

“Europe is our biggest trading partner and the UK’s membership of the European Union is vital for the automotive sector in order to secure future growth and jobs.”

Production of the Mini rose by 12.4% last year to 201,000 and Toyota produced 190,000 cars, up 10.4%.

Vauxhall’s production rose by 9.5% to 85,000, and Jaguar Land Rover saw a 9% rise to 489,000.

However, Nissan recorded a 4.7% reduction, to 476,000, and Honda was down by 2%, to 119,000).


Oil price falls below $35 a barrel to fresh 11-year low

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Oil has continued its rollercoaster ride into the new year, with Brent crude falling below $35 a barrel for the first time in 11 years.

Brent crude sank by 4.2% to $34.88 a barrel, surpassing its late December fall and taking it to its lowest level since 1 July 2004.

The price of US crude dropped 3.3% to $34.77 a barrel.

The sharp falls followed a short-lived rally on Monday after Saudi Arabia broke diplomatic ties with Iran.

Analysts said fears over the worsening relations between Saudi Arabia and Iran, which had initially raised concerns about possible supply disruptions and boosted the oil price, had now gone away.

Instead, the tensions – fuelled by Saudi Arabia’s execution of Shia cleric Sheikh Nimr al-Nimr – have curbed speculation that Opec members will agree to production cuts to boost prices.

“There are rising stockpiles and the tension between Iran and Saudi Arabia makes any deal on production unlikely,” said Michael Hewson, head of strategy at CMC Markets.

From 2010 until mid-2014, world oil prices had been fairly stable, at about $110 a barrel. But since then, prices have plunged 70%, driven by weak demand in many countries due to insipid economic growth, coupled with surging US production.

Iranian oil exports are also expected to rise later this year once Western sanctions against Tehran for its nuclear programme are lifted, increasing the oil glut.

“Shale production and increasing capacity from countries like Russia, who need to protect revenue, combined with expectations of further Iranian supply, mean actual production, as well as expectations of future production, are rising,” Mr Hewson added.

Npower to pay £26m over billing and complaint failures

Alexander Tredwell – Leaders in Specialist Professional Recruitment

RWE-owned (RWEG.DE) utility npower has been fined 26 million pounds for failing to treat customers fairly, Britain’s gas and electricity market regulator Ofgem said on Friday.

The largest fine ever levied by the regulator against one of Britain’s ‘big six’ energy companies relates to billing issues which affected more than 500,000 customers and the company’s failure to handle complaints properly.

Ofgem said many of the problems related to the introduction of a new IT system in 2011 which led to some customers receiving inaccurate bills.

“The payment of 26 million pounds sends a strong message to the industry that we expect them to act quickly and effectively to ensure a good customer experience,” Ofgem Chief Executive Dermot Nolan said.

The money will be divided between some of the worst-affected customers and charity, Ofgem said.


High Street shops ‘face rates shake-up

Alexander Tredwell – Leaders in Specialist Professional Recruitment

High Streets in the UK are set to face radical changes in the amount of money they pay in business rates in future, new research suggests.

Property consultant Colliers International found 76 out of the UK’s main towns and shopping centres will see an increase in their rates bill.

Some parts of London will see an increase of more than 400%, it says.

The winners, mainly in the Midlands and north of England, will see business rates plummet, it adds.

Newport in south Wales could see bills fall by some 80%, the report found.

“The business rates losers are found only in London and the South East and it could turn highly profitable stores, including independent retailers, into failing businesses,” said John Webber, ratings expert at Colliers International.

Business rates are a tax based on property values. They are usually revalued every five years.

The last revaluation in England and Wales was in 2010, but this year’s revaluation was controversially postponed to 2017.

The Government’s Valuation Office Agency is busy updating its figures, but Colliers has done its own research on how the rating revaluation will affect High Street retailers, based on analysis of rental data from 2010 to 2015.

It says it found big variations across the country:

Marlow faces an increase of 58% in rateable value, followed by Guildford at 42%, and Brighton up by 18.5%.

But Rochdale in Greater Manchester, hit hard by the economic downturn, will see a decrease of 30%. Kidderminster in the West Midlands is down by 42%.

And in London, it is Dover Street which is the biggest loser, with an increase of 415%. Brixton faces a potential 128% increase in rateable value, although Ealing will see a decrease of 46%.

Mr Webber believes some retailers are going to be in for a nasty shock when the business rates change in 2018.

“Business rates is a major cost for retailers and it’s really important that they are able to budget for these once-in-a-generation changes,” he adds.

The government has promised a review of the current system and will deliver its findings by next year’s Budget.

Business rates are expected to raise around £28bn for the Treasury’s coffers this year, more than the sum it raises in council tax.

Retailers currently pay a quarter of this bill, more than any other sector, and are demanding wholesale change, saying the current system is unsustainable.

They say it is an arrangement that always produces winners and losers for individual businesses.


ECB moves to boost eurozone economy

Alexander Tredwell – Leaders in Specialist Professional Recruitment

The European Central Bank (ECB) has moved to bolster the eurozone economic recovery by cutting a key interest rate and extending its stimulus programme.

The overnight deposit rate was cut from -0.2% to -0.3%, to push banks to lend instead of parking money at the ECB.

The ECB also extended its monthly €60bn stimulus programme by six months to March 2017, but left its main interest rate on hold at a record low of 0.05%.

Many analysts were underwhelmed by the news and had forecast tougher measures.

ECB president Mario Draghi told a news conference that its bond-buying stimulus programme, or quantitative easing (QE), was working.

But an extension of QE was needed to tackle prolonged low inflation and get it back towards the ECB’s 2% target, he said. QE would now run to at least March 2017, from The cut in the interest rate on overnight bank deposits means that banks in effect pay more to the ECB for holding their reserves.

The policy is designed to make it more profitable for banks to offer loans to consumers and businesses, ensuring a free flow of money.

However, most analysts had been expecting the ECB to take more drastic action.

“Draghi has over promised and under delivered,” said Patrick O’Donnell, investment manager at Aberdeen Asset Management.

“Everyone was expecting Draghi to be the white knight for Europe once again and he hasn’t really showed up. Today’s measures amount to tinkering around the edges.” He added: “Markets won’t be particularly impressed.”

The main stock markets in Germany and France, which had been rising, turned negative soon after the ECB’s announcement. Frankfurt’s Dax was down 2.5%, while France’s Cac index was 1.96% lower.

Ahead of the announcement, the euro had been weakening. However, when the measures fell short of expectations the euro surged against the dollar, rising more than two cents to above $1.08.

The ECB is tackling low inflation, currently 0.1% and a potential obstacle to stronger growth.

Mr Draghi told the news conference that eurozone inflation for 2016 is expected to reach 1% rather than the 1.1% previously forecast. For 2017, inflation is set to reach 1.6%, down from the previous prediction of 1.7%.

Inflation in the eurozone has been below zero – that is, prices were falling – as recently as September. This has been because of falls in international energy prices, particularly crude oil.

But “core inflation”, which strips out volatile food and energy prices, is also low, hovering persistently around 1%.

The latest figure, for November, was down on the previous month.

The ECB has “under-delivered” to quote one economist. It’s quite a widely shared view.

Perhaps the most telling verdict is from the currency markets. The euro is now stronger. Why? Because the stronger medicine that was expected would have tended to drive down interest rates in eurozone markets even further making it more lucrative to buy assets in other currencies instead.

Two things have disappointed the markets. They were looking for a commitment to increase the amount the ECB and national central banks spend each month on QE.

Instead, Mr Draghi said it would go on longer but at the same monthly rate. And the markets expected a bigger cut in the interest rate on banks’ deposits at the ECB. It’s already below zero which means the banks are being charged to park excess funds at the central bank.

A bigger cut would have given them an even bigger incentive to lend more rather than sit on idle cash.



FTSE boosted, with pharmaceutical stocks in demand

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Britain’s top share index rose on Wednesday, helped by bullishness over pharmaceutical stocks from brokers, though software firm Sage (SGE.L) fell after results. Britain’s FTSE 100 rose 21.15 points, or 0.4 percent, to 6,416.80 by 0902 GMT, with pharmaceutical stocks contributing the most to gains. GlaxoSmithKline (GSK.L), AstraZeneca (AZN.L) and Shire (SHP.L) combined to add over 8.5 points to the index, with the sector lifted by a note from Morgan Stanley. AstraZeneca benefitted from a double upgrade to “overweight” while GlaxoSmithKline saw its target price lifted. “AstraZeneca … has underperformed dramatically over the past year, but looks set to reap the rewards of heavy investment, at an attractive valuation,” Morgan Stanley said in the note.

The biggest faller was Sage (SGE.L), down 5.3 percent. The software firm said it achieved its target of growing revenue by 6 percent in the 12 months ended September and it would equal or better the performance in its new financial year. While the underlying performance was strong, brokers said, currency swings and an accounting change muddied the picture. “Our initial take is that Sage’s underlying performance is possibly a touch ahead of expectations, albeit currency headwinds mean that the overall numbers are in-line,” analysts at Numis said in a note, cutting their rating to “hold” from “buy”.

“However this is all slightly muddied by an accounting policy change which we expect to cause some early sell-side confusion this morning.” Among mid-caps, Greene King Plc (GNK.L) gained over 8 percent after it posted a rise in profit in its first set of interim results since taking over smaller rival Spirit Pub, as more customers flocked to its pubs. It also increased its synergy guidance from the merger. Among FTSE 250 .FTMC fallers, price comparison site Moneysupermarket (MONY.L) fell nearly 7 percent after its founder sold a stake in the company.

Saga Plc (SAGAG.L) also suffered from a stake sale after the travel and insurance firm’s largest shareholder Acromas Bid Co Ltd sold a 13 percent stake through a discounted placing. The shares fell more than 5 percent.


Black Friday Blues and Benefits

Alexander Tredwell – Leaders in Specialist Professional Recruitment

This Friday is expected to be the UK’s first ever billion pound shopping day. Black Friday is fast becoming a day we love – and a day we hate. And we will all watch, with a kind of delighted outrage, dramatic footage of excessive spending and violent shopping habits. It is not without humour. One tweet ran: “Make every day feel like Black Friday by knocking over your family as you run out of the house with the TV.” But the day is fraught with conflicting emotions. While one shopper tweets “Can’t wait for #BlackFriday”, another begs: “pls don’t support any retail stores with black Friday deals today. just stay home w ur family or something”. Even in the US, where it all started, there are doubts among those you would have the most to gain. Fortune magazine has called it in an article “The Most Rotten Part About Thanksgiving Day”, complaining that low paid employees don’t get a break and that stores see discounted sales concentrated on one day, and higher margin sales falling off for the next four weeks.

So the BBC canvassed a range of views on the shopping phenomenon that is Black. Asda has been the UK’s most high-profile Black Friday dissident, due to what it calls “shopper fatigue setting in around flash sales on big-ticket, non-essential items at Christmas.” The move is all the more unexpected since its parent company Walmart in the US is at the forefront of Black Friday discounting. Asda President and CEO, Andy Clarke said: “The decision to step away from Black Friday is not about the event itself. “This year customers have told us loud and clear that they don’t want to be held hostage to a da  or two of sales. With an ever-changing retail landscape, now more than ever we must listen carefully to exactly what our shoppers want and be primed and ready to act the minute their needs change. “When it comes to putting customers first, Asda has always led the way, which is why we’re just as confident in our decision to step away from Black Friday as we were in introducing it to the UK.”

In the US one apparel company has turned its opposition to Black Friday into a marketing opportunity, actually closing its doors on Thanksgiving and Black Friday. REI sells outdoor and recreational kit online and in 143 outlets and, appropriately, told its customers not to spend money, but to get outdoors. It claims its #optoutside has been taken up enthusiastically. It estimates a million Americans have committed to “opt outside” activities on Black Friday. Jerry Stritzke, CEO of REI tweeted; “The response has been humbling and inspiring” He had given his management team the task of coming up with a novel marketing campaign nine months ago. He said: “They came back with this, and I have to admit, the idea was a bit shocking. But the more we thought about it, the more excited we got. “I don’t expect to see a lot of retailers closing on Black Friday. The attention creates the platform to talk about the power of getting outside.”

“My three-year-old grandson is coming out [to Washington] for Thanksgiving, so we’re going to go out on the mountain and see if we can find a little bit of snow.” Meanwhile, many of the US National Parks are pushing what they call “Green Friday” to get people into the wilderness, with Olympic and Mount Rainier national parks offering free entrance passes for the day.

Many retailers though are true Black Friday believers. In the UK Currys PC World expects to make over two million deliveries and install 12,000 washing machines, 6,000 cookers and 3,000 TVs over what it calls the “Black Friday period”. Aware of Asda’s argument that customers can feel they are being forced to buy on a single day it has introduced a Black Tag scheme to spread some of the bargains over ten days. Stuart Ramage, ECommerce Director at owner of Currys PC World, Dixons Carphone, says: “Black Friday has grown enormously over the last few years and we’re now expecting it to be the largest sales event of the year. “By starting our 10 day Black Tag event on Monday, and releasing additional fantastic deals for Black Friday itself, we’ve worked hard to make sure our shoppers can pick up the best deals at a pace that suits them, whether that be in-store or online.”

But there is analytical evidence that Black Friday is not doing much good for the retailers themselves. At the retail and brand consultancy, Fitch, Alasdair Lennox, the executive creative director for Europe, Middle East and Africa, argues that the effect on profitability is marginal because of the deep discounting. He said: “From the UK perspective all the retailers got on board Black Friday, albeit reluctantly, but they are now at a tipping point where they have to decide or whether to stay on board or hold back “You are seeing companies like Asda pulling back and Tesco having a later opening time, and others will follow. “The problem with Black Friday is that at the top end it tends to erode brand equity. So, for instance, a customer is saving up to make a purchase and sees the price go up, then go down on Black Friday and then rise again – and that undermines their trust and confidence in the product. “If you are a discounter, that’s fine. But if you are at a high-end retailer, then that’s a problem”

In the UK one sector has come up with an antidote to it all: Civilised Saturday. The Bookseller Association’s president Tim Walker thought up the concept for bookshops, many of them struggling with the the competition from Amazon, which is often credited with importing Black Friday to the UK. He said: “What you do on Civilised Saturday is up to you. It could just be serving tea and cakes in the afternoon or maybe by having an invitation-only event with prossecco, canapes and a string quartet in the corner.” So, the tiny Bookends bookshop of Fowey in Cornwall is offering customers 10% off all stock, and the children’s bookshop, The Bookworm, at the other end of the country in Selkirk, is hosting a Famous Five Tea Party. Dulwich Books in London will encourage shoppers to browse at leisure with afternoon tea, homemade cakes, and winter warmer drinks. Philip Maltman, principal bookseller at Dulwich said: “Civilised Saturday is absolutely in line with our identity as an independent bookseller. Obviously it brings in more people and we sell more books . But if we just pile them high and sell them cheap it does not appeal to kind of customers who want to use an independent bookshop like us.”


HSBC shareholder Standard Life would back moving HQ

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Shareholders would back banking giant HSBC if it decided to move its headquarters out of the City, according to one of its bigger investors. David Cumming, head of equities at Standard Life Investments, said that HSBC was being put at a “competitive disadvantage” by “ever-increasing capital requirements”. “Logically, we would be supportive of a move if they chose to do that,” he told Radio 4’s Today programme. Standard Life owns 1% of HSBC. Mr Cumming said a UK exit would result in “better growth, earnings and dividend prospects unless the regulator changes tack”.

The warning came as the Bank of England prepared its latest set of stress tests, designed to assess whether lenders could withstand another financial crisis. HSBC said earlier this year that it was considering moving its headquarters out of the UK. At the time, the bank said the decision was sparked by “regulatory and structural reforms” since the financial crisis.

HSBC has said it will make a decision on a possible move away from London by the end of the year. The bank has not yet said where it may consider moving to, although many expect Hong Kong to be high on the list. It has had its headquarters in the UK since 1992, but makes most of its money overseas, with Asia accounting for about 80% of its profit. HSBC has threatened to exit the UK before. In 2010, it said it might move from London if the UK government decided to break up big banks.