Turnround efforts at Morrisons gathered pace as the UK’s third-largest supermarket increased annual profits by almost 50% even as rising commodities prices and the falling pound began to stretch consumers’ budgets (The Financial Times £). Fewer queues, cheaper prices and more customers helped Wm Morrison to report its first year of profit and sales growth since 2011 (The Times £).
The Bradford-based supermarket chain also promised to keep a tight rein on price rises as the grocery sector takes on food price inflation for the first time in more than two years (The Telegraph). Bag a latte and a lettuce! Morrisons to launch coffee shops in its car parks to lure in more customers (The Daily Mail).
Annual bonuses at the John Lewis Partnership have been cut for the fourth consecutive year to their lowest level since 1954 as the retailer warned of an increasingly uncertain market (The Times £). The John Lewis slashed its staff bonus to the lowest level for more than 63 years, despite posting a 21% jump in pre-tax profits (The Telegraph).
The cut marks the fourth year in a row that bonuses have fallen and will see the retailer’s staff share a £89.4m bonus pot - down from £145m last year (The Daily Mail). The group said the bonus was the equivalent of three weeks’ pay and had been cut to retain profits and strengthen its balance sheet (The Guardian).
Waitrose said trading improved in the second half of the year, but it is changing its focus to investing in existing stores rather than opening new ones (The BBC).
The Financial Times (£) contrasts fortunes at Morrisons and John Lewis, noting “in their treatment of stakeholders, the retailers now appear to be wearing each other’s clothes”. It writes that Morrisons is raising its “colleague bonus” to 9% of profit and giving shareholders an 8.6% higher dividend, covered twice by earnings, while John Lewis is cutting partners’ profit share to 6% of earnings.
The Guardian looks at why John Lewis is tightening its belt – highlighting rising staff costs, pensions, Brexit and the shift to online.
Tesco is to reimburse 140,000 present and former employees a combined £9.7 million after payroll errors meant staff were not paid the national minimum wage (The Times £). Britain’s biggest grocer has set aside £9.7m to make the payments, which follow a review of payroll errors stretching back six years (The Financial Times £). The grocer said it had uncovered an error which meant that employees were being underpaid whilst it introduced a new payroll system (The Telegraph). Some staff were paid less than the National Living Wage after contributing part of their salary to pensions, childcare and cycle to work schemes (The BBC). Tesco said the majority of workers affected would receive up to £40 (The Guardian).
The Co-operative Bank has said that it will try to raise up to £750m in new capital if it fails to find a buyer after it recorded a £477m loss last year (The Times £). If both plans fail, it will spark fears the bank could be wound up by regulators in a process called resolution (The Daily Mail). Co-operative Bank has reported its fifth consecutive year of losses and warned of more branch closures and job losses as its struggles to restore its fortunes following its tie-up with Britannia Building Society (The Guardian). The loss for 2016 represented an improvement on the previous year’s £611m figure but the lender said it was still being damaged by legacy issues and the low interest rate environment (Sky News).
A top executive at global food giant Mars has warned that Brexit could increase the prices of its chocolate bars. Fiona Dawson, president of global food, drinks and multisales at the US firm, will warn that a UK departure from the European Union without a trade deal would result in higher prices as well as jeopardising jobs. (Sky News)
British American Tobacco’s £40 billion merger with Reynolds American has been approved by the US antitrust body. (The Daily Mail)