Tesco unveils its discount chain Jack’s today as the major supermarkets continue to lose market share to Lidl and Aldi (Daily Mail). Britain’s biggest supermarket will reveal its plans to take on the discounters with a cut price offer of its own as it battles to win customers. Tesco is expected to initially open up to 60 stores in the coming months - many of them converted from convenience stores in city centres (Sky News).
The Competition and Markets Authority (CMA) is referring the proposed merger between Sainsbury’s and Asda for an “in-depth investigation” (Sky News). The CMA confirmed, having completed its Phase 1 investigation into the proposed merger, that the deal “raises sufficient concerns” to be referred for a more in-depth review (Reuters).
Starbucks’ European business paid an effective UK tax rate of just 2.8 per cent in the year to the end of October 2017 after a payment from another part of the group boosted profits (Financial Times £). The coffee chain, which has in the past faced vocal criticism of its tax affairs in Britain, has revealed that its largest European operation paid $5.9m of tax in the UK on profits of $213m, down slightly from $219m in the preceding year.
Some of the world’s biggest consumer companies have submitted non-binding bids for GlaxoSmithKline’s nutrition business as competition intensifies to secure the company’s prized Horlicks malted drink brand ahead of an auction later this year (Financial Times £). GSK is expected to produce a shortlist of bidders in the next two weeks, with no single company considered a frontrunner, said people familiar with the situation. Bidders include Nestlé, Unilever and Coca-Cola, as well as a consortium led by KKR, the US buyout group, these people added.
Retail revenues at Ocado increased 11.5% in its third quarter, a slight slowdown from the first half of the year but in line with the online grocer’s guidance for the year (Financial Times £). Average orders per week climbed almost as much year on year — 11.4 per cent — to 283,000. Retail revenues, which include revenues from Ocado’s online sites and its wholesale partnerships, were £349m — up from £313m a year earlier. Chief financial officer Duncan Tatton-Brown said to “expect a significant increase from where we are today” in the next three months. “We are investing in a number of areas, primarily in our new platforms” (The Telegraph). Customers signing up for its services and increases in capacity at its automated warehouses have also boosted revenue at Ocado (The Times £).
A fourth UK shareholder in Unilever has said that it will vote against the consumer group’s proposed move to relinquish its London headquarters (The Times £). In a blow to Unilever and its boss Paul Polman, M&G Investments has come out against the plan to abandon the company’s 88-year Anglo-Dutch dual governance structure.
Consumers spent almost £500m more in the 12 weeks to 9 September due to the summer heatwave and the World Cup, boosting British grocery sales up 3.8% (Telegraph). In what was the hottest British summer on record, the latest figures from Kantar Worldpanel show shoppers spent £228m more on alcohol, £178m more on soft drinks and £74m more on ice cream than during the same period last year.
A series of websites, an app and a YouTube channel promoting Kinder chocolate and toys have been banned in the UK for aiming junk food advertising at children (The Guardian). The ruling published on Wednesday by the Advertising Standards Authority agreed that the sites and “advergames” had broken rules set by the Committee of Advertising Practice on the promotion of high fat, salt or sugar products to the under-16s.
General Mills on Tuesday issued upbeat first-quarter earnings that were overshadowed by a drop in its gross margin and sales that turned up just shy of Wall Street estimates (Financial Times £). The Minneapolis-based company behind Cheerios cereal, Haagen-Dazs ice cream and Yoplait yoghurt, said first quarter net sales climbed 9 per cent from a year ago — aided by its acquisition of Blue Buffalo — to $4.09bn, just shy of analyst expectations for $4.12bn.
Amazon should split itself in two before Washington forces the technology goliath to break up, according to a top Wall Street analyst (The Times £). Citigroup said yesterday that a pre-emptive separation of Amazon’s online retail division from its cloud computing business would ward off the threat of more onerous regulation.
Beijing will impose tariffs on American products worth $60 billion next week after President Trump ordered $200 billion of new tariffs on Chinese goods in an escalating trade war between the world’s two largest economies (The Times £).
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