Wetherspoon to cut jobs, B&Q sales surge on DIY boom and oil prices extend losses

Tower Bridge partially visible from Southwark, London. Photo: Toby Melville/Reuters
Tower Bridge partially visible from Southwark, London. Photo: Toby Melville/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Higher customer spend leads to B&M Retail sales surge

Discount chain B&M European Value Retail (BME.L) has seen booming sales despite the COVID-19 outbreak.

Customers spent more money per visit, driving strong first half revenue growth and a profit uplift, according to a company statement released on Tuesday.

Placing shops in “convenient, easily-accessible, out-of-town locations” has also proven to be good for the business.

For the period from 29 March to 26 September 2020, revenue grew 25.3%, with B&M UK stores generating revenue growth of 29.5%. Trading momentum at B&M UK stores was maintained in the second quarter, with 19.1% like-for-like growth and an exit rate at a similar level, the company said.

The company opened nine new B&M UK fascia stores by the half year end, offset by eight closures. The latter group comprised mostly older, smaller stores.

Greggs to cut jobs as COVID-19 hits sales

Greggs (GRG.L) has started consultations with staff on reducing hours at 800 of its shops, potentially putting hundreds of jobs at risk if a deal can’t be reached.

In a trading update on Tuesday, the bakery chain said it had started talks with unions and staff on reducing working hours. The consultation process is due to last until November.

A spokesperson declined to say how many jobs were at risk but confirmed the consultation affects 800 of Greggs’ 2,000 stores. The company employs about 25,000 people across the UK.

“Our aim is to minimise the risk of job losses by negotiating reduced hours in our shops and we will update on the outcome of the consultation when concluded,” the company said.

Sofa retailer ScS sees sales slump due to lockdown

Sofa retailer ScS (SCS.L) saw a 20% fall in sales as it was “significantly impacted” by COVID-19.

The Sunderland-based sofa business, which has 100 shops across the UK, said sales fell by 19.5% from £333.3m ($425m) to £268.1m in the year ending 25 July 2020. Last year’s operating profit of £13.9m was converted to a loss of £1.5m.

“The period of national lockdown from late March to late May led to the temporary closure of our stores and distribution centres,” the company said in a statement on Tuesday.

“Whilst order intake was very strong post the lockdown, the period of closure led to a reduction in deliveries and therefore sales recognised in the year. As would be expected, this reduction in sales had a material impact on the gross profit and EBITDA achieved in the year.”

European markets open weaker as key Brexit talks begin

Fresh Brexit talks will begin on Tuesday with more of a conciliatory tone as European negotiators have reportedly dropped their demand for the two sides to reach a broad agreement on all previously disputed outstanding areas.

In return, the UK is expected to “engage in detailed discussions on post-Brexit fishing quotas and the government’s future subsidy policy, two of the biggest remaining sticking points,” according to The Times.

“This is potentially a significant move,” said Deutsche Bank analysts in their Tuesday morning report.

COVID-19 also remains in the spotlight as infections rates continue to rise. The official toll from the virus has passed one million deaths, yet health officials say the true toll could be higher given the difficulty in accurately quantifying cases.

At around 11am on Tuesday in London, the FTSE 100 (^FTSE) was off 0.8%. The pan-European STOXX 600 (^STOXX) was down 0.5%. Germany’s DAX (^GDAXI) slumped by 0.7%, and France’s CAC 40 (^FCHI) went lower by 0.4%.

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