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Retail
• Dixons Carphone – “In UK & Ireland our sales and profit have been impacted by Covid-19 and government closure of our stores twice, for a total of four months, as we were classified as non-essential. This left us disadvantaged against our principal competitors. Grateful though we are for vital government support, we have lost more profit from lost store sales due to restrictions on stores than we have received in government support. In assessing the enforced store closures, we have estimated the impact on revenue and profits generated by stores. In doing so we have considered the movements in these metrics compared to the comparative period, historic trading patterns and the sales trends that we saw when stores were open. We estimate the cumulative impact of the enforced store closures and the reduction in our Travel business (a strong business that has effectively closed due to travel restrictions) have reduced store sales by at least £320m (1H 2020/21: £185m, 2019/20: £135m). In combination with the ongoing restrictions when stores opened and the shift towards lower margin online sales, this negatively impacted profit before tax by £155m (1H 2020/21: £80m, 2019/20: £75m), including c.£15m we have spent on keeping our colleagues and customers safe, on distancing, hygiene and protective equipment. UK and Irish government schemes paid furlough to our colleagues and allowed relief on business rates tax, totalling £103m (1H 2020/21: £80m, 2019/20: £23m). Together with executive pay cuts, bonus cancellation and suspension of dividend, this allowed us to keep thousands of colleagues employed even as our stores were required to temporarily close. Despite further store closures in the second lockdown, we have not used the Job Retention Scheme since October.
Nevertheless, the strong sales we have seen through our omnichannel model has partly enabled UK & Ireland online sales growth of +145% resulting in additional sales of almost £800m in the period. This meant that our profits are improved against the first half last year despite the enforced store closures.”
Support Services
• Bunzl – “Group revenue for the year is expected to increase by approximately 8% at actual exchange rates and by approximately 9% at constant exchange rates, due to similar levels of growth from both the increase in organic revenue and the impact of acquisitions. Organic revenue growth continues to reflect diverging trends between the strength of Covid-19 related product sales, including a higher proportion of imported own brand products such as gloves, masks, sanitisers and disinfectants, and declines in the sales of other products. The group expects the growth in Covid-19 related sales over the fourth quarter to be driven by the ongoing support of smaller orders, whilst larger orders will continue to slow. The decline in other product sales seen earlier in the year is expected to improve slightly despite the impact of recently strengthened pandemic-related restrictions in some markets. The group operating margin in 2020 has continued to benefit significantly from the mix of products sold and is expected to be higher than the prior year.”
Other
• The UK’s inflation rate fell dramatically to 0.3% in November from 0.7% in October, official figures show. Lower prices for clothing, food and non-alcoholic drinks made the biggest contribution to the fall, the Office for National Statistics said.
• The ONS estimates that 150,000 people in the UK are suffering from ‘Long Covid’. The ONS said one in ten people it surveyed who tested positive for the virus, still had symptoms 12 weeks later; while one in five had symptoms for five weeks or more.
• Germany entered a nationwide lockdown today and that will be in force until 10 January. All schools and non-essential shops will shut. Up to five people from a maximum of two households will be allowed to gather in a home, although these rules will be relaxed over 24-26 December.
• Greece has a nightly curfew and people must text a government number asking permission to leave their home. These restrictions will be in place until 7 January.
• Welsh First Minister Mark Drakeford has said that all non-essential retail in Wales and close contact services like hairdressers and nail bars, leisure and fitness centres, must close at the end of trading on Christmas Eve.
• A potential vaccine developed by British American Tobacco has been approved for human trials in the US.
• So far 137,897 people have received the Covid-19 jab in the UK.
• The WHO Covax scheme to deliver vaccines to poorer countries faces a “very high” risk of failure, leaving potentially billions of people with no access to vaccines until as late as 2024.
• New Zealand’s economy showed a faster recovery than expected, but large deficits and rising debt levels will have a lasting effect on the economy, the government said today. The country’s treasury department predicted the budget deficit for the 2020/21 fiscal year to be NZ$21.58bn, NZ$10.1bn smaller than forecasts made in September.
• The CMA is looking into passenger refunds during England’s second lockdown, when people were unable to travel lawfully for non-essential purposes. The CMA will consider whether refusing cash refunds breached consumer rights.
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