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Engineering giant Smiths Group shot to the top of the FTSE 100 risers after the collapse in air travel failed to dent its airport detection business.
The firm reported a 4pc dip pre-tax profits of £67m for the six months to the end of January, while revenue fell 7pc to £1.2bn.
However, revenues exceeded analyst expectations, while the £166m operating profit was also higher than the £151m analysts had forecast.
Demand for baggage scanners rose by 4pc compared to the same period a year ago, despite coronavirus hammering passenger flights. Detection equipment used in airports represents about a fifth of Smiths’ revenues.
Chief executive Andy Reynolds Smith said: “This is a robust set of results relative to our end markets, with a resilient top line, good profit conversion and excellent cash generation.
“People instinctively expect the detection business to have taken an absolute clattering but that’s not been the case.
“Airports are driven by regulation and they are required to upgrade their systems to the latest standards, irrespective of whether they are operating at capacity or not.”
Smiths’ dividend was increased by 6pc to 11.7p and shares jumped almost 7pc, or 101p, to £15.60.
London’s markets rallied on Friday, erasing losses from the previous session to join a rise in equities worldwide after data in the UK and US gave traders a positive outlook for the global economic recovery.
Figures showed UK retail sales rose 2.1pc in February, helped by consumers stocking up on goods including DIY products and garden furniture ahead of the easing of lockdown in England.
The blue-chip FTSE 100 gained 65.7 points to 6,740.5 for its best session in more than a fortnight, helped by mining and oil stocks.
Trailing Smiths were mining giants Glencore, which rose 17.5p to 286.4p, Antofagasta which added 71p to £16.92; and Anglo American, up 117.5p to £28.43. Also among the top ten risers were miners Rio Tinto and BHP Group.
Meanwhile BP added 8.9p to 283.6p, and Royal Dutch Shell added 29.6p to £14.50. The failure to refloat the container ship stuck in the Suez Canal boosted oil, with Brent crude gaining 4.1pc to $ 64.50 a barrel.
“Markets appear to be working on the assumption that the container ship is likely to get pulled out of the canal wall on the high tide at the beginning of next week, and that despite concerns of a third wave in Europe, the global recovery will take up any early slack,” said Michael Hewson, chief market analyst at CMC Markets
Elsewhere, Oxford Instruments, which manufacturers high-tech tools, jumped 208p to £20 after it said it expects revenues in the second half of the financial year to be “marginally ahead” of the previous year’s £317.4m.
The FTSE 250 firm said it has had particularly strong growth in its semiconductor division as well as good order growth from Asia, particularly China.
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06:07 PM
Wrapping up
That is all from us this week – here are some of our top stories of the day:
Thanks for joining! See you on Monday
05:38 PM
Burberry dropped from Chinese video game over Uighur row
Burberry
ICYMI, in the ongoing and developing boycott of many western retail brands by Chinese consumers over their accusations of forced labour in Xinjiang province, Burberry has lost a popular video game deal just days after it was announced.
Laura Onita breaks it down:
The company’s tie-up with Tencent Games was announced at the end of last year to add its hallmark tartan design to characters in the Honour of Kings game.
The design has been dropped from the clothing worn by some of the characters, according to a post on the game’s official Weibo account. Burberry only revealed further details of the partnership at the start of this week. That announcement has since been removed from its website.
A wider boycott of Burberry’s clothes, bags and accessories would make a serious dent in sales and profits. Chinese consumers account for almost half of its sales.
05:22 PM
An average $ 184k bonus on Wall Street
The average Wall Street securities industry bonus rose by 10pc last year to $ 184,000 (£133,000) according to Thomas DiNapoli, the head of New York state government’s Department of Audit and Control.
That was in line with the state’s projections. The bonus pool rose to $ 31.7bn last year, up 6.8pc from 2019. In comparison, it dropped 47pc in 2008 after the financial crisis.
“Wall Street’s near-record year shattered all expectations,” said DiNapoli in a statement. “The early forecast of a disastrous year for financial markets was sharply reversed by a boom in underwriting activity, historically low interest rates and surges in trading spurred by volatile markets.”
05:15 PM
Kissinger urges US and China to reach new global order
Veteran US diplomat, and long-time expert on China Henry Kissinger, has said the US must reach an understanding with China on a new global order to ensure stability or the world will face a dangerous period like the one which preceded World War One.
Bloomberg has the details:
Kissinger, now 97, influenced some of the most important turns of the 1970s while serving as secretary of state under Republican Presidents Richard Nixon and Gerald Ford.
Speaking at a Chatham House event in London via Zoom, Kissinger said the ultimate question was whether or not the United States and its Western allies could develop an understanding with China about a new global order.
“If we don’t get to that point and if we don’t get to an understanding with China on that point then we will be in a pre-World War One-type situation in Europe, in which there are perennial conflicts that get solved on an immediate basis but one of them gets out of control at some point,” he said.
“It is infinitely more dangerous now than it was then,” Kissinger said. He said the high-tech weaponry on both sides could lead to a very gave conflict. The other question, he said, was whether or not China would accept that new order.
04:56 PM
‘UK financials well placed to perform strongly’ – Lazard on financial services deal
Commenting on the UK and EU reaching a deal on financial services, Alan Custis, head of UK equities at Lazard Asset Management says:
“If it paves the way for confirmation that the EU will recognise standards of regulation and supervision, it should be welcomed by the UK. This would not, however, replace the full rights that the sector enjoyed under EU membership.
“There have been various initiatives by the UK financial services industry since the start of the year to protect its position, such as developing closer ties to Switzerland, and some relaxations in listing rules to make the UK a more attractive domicile for corporates.
“Overall, for investors in UK financial services, a greater degree of cooperation between Europe and the UK can only be seen in a favourable light, but it still feels as though the UK needs to continue to plough its own furrow in case there is a change of heart.
In my view, the industry needs to be in a position to take advantage of any opportunities that come from being one of the world’s pre-eminent financial centres. UK financials are well-placed to perform strongly and at current valuations, represent an attractive investment opportunity.”
04:42 PM
Sales climb at airport security scanner firm, despite lockdowns
The collapse in air travel has failed to dent Smiths Group’s detection business which makes airport security scanners, with it reporting climbing sales.
My colleague Alan Tovey reports:
Posting numbers for the six months to the end of January, Smiths said the demand for baggage scanners rose by 4pc on the same period a year ago, despite coronavirus hammering passenger flights.
Detection equipment used in airports represents about a fifth of Smiths’ total revenues, which fell 7pc to £1.15bn of during the six months. Pre-tax profit slipped fell £15m to £145m.
Andy Reynolds Smith, chief executive of the FTSE 100 business, said: “People instinctively expect the detection business to have taken an absolute clattering but that’s not been the case.
“Airports are driven by regulation and they are required to upgrade their systems to the latest standards, irrespective of whether they are operating at capacity or not.”
The dividend was upped 6pc to 11.7p. Smiths shares rose 6.7pc to £15.57.
04:13 PM
FTSE in the green
With the FTSE 100 ending trading firmly in the green – rebounding from Thursday’s losses – Michael Hewson, chief market analyst at CMC Markets, sums up the day’s movements for us:
“Investors appear to be adopting a glass half full mentality when it comes to sentiment as we look ahead to the end of the month, and the quarter next week.
“Markets appear to be working on the assumption that the container ship is likely to get pulled out of the canal wall on the high tide at the beginning of next week, and that despite concerns of a third wave in Europe, the global recovery will take up any early slack.
“If next week’s ship flotation attempt fails, sentiment could well change, but for now the assumption is that we could see the Suez Canal unblocked in the next week or so.
“Today’s UK retail sales numbers for February bode well for a big rebound in consumer demand as we head into Q2, while a better-than-expected German IFO number also points to rising optimism, about a global economic recovery even as Europe remains stuck in the mud spinning its reopening wheels.”
03:52 PM
UK-EU reach deal on financial services regulation
UK-EU
The UK and European Union have reached a deal on a forum for both sides to discuss financial services regulation.
My colleague James Crisp reports:
The memorandum of understanding sets the terms of engagement between the two parties but does not grant the City of London access to the EU’s Single Market.
Sources in Brussels said technical discussions had been concluded but some formalities needed to be completed before it could be signed. The MoU must be agreed by the EU’s 27 member states.
However the deal will raise hopes that dialogue between regulators will convince Brussels to grant market access, which is termed “equivalence”.
Brussels has denied equivalence to almost all sectors, despite the UK giving access to a slew of firms before Britain left the Brexit transition period on December 31. The end of the transition period was when UK firms lost their “passport” to the Single Market.
Brussels has said it will not grant equivalence until it has details of the UK’s plans to diverge from EU financial rules after Brexit.
The European Commission has been accused of stonewalling the UK, which has so far made no major changes to its pre-Brexit rules, to convince firms to onshore back to the Continent.
03:27 PM
Bids for Ralph & Russo by April 14
Meghan and Harry
Fashion label Ralph & Russo – which went into administration earlier this month – is accepting bids for the business by April 14.
Hilco, who is been appointed to manage the sale, said the sales process “is expected to draw a significant level of interest” and therefore “may conclude before deadline should an “exceptional offer” be received”.
The 11-year old British couture label is famed, in part, for making Meghan’s engagement dress.
02:54 PM
A Jessops history lesson
The original Jessop store in Leicester
In light of the news this afternoon, we thought some background on the company might be useful…
Laura Onita writes:
The firm started life 130 years ago as a chemist store in Leicester. It was bought by Frank Jessop and transformed into a photography shop in 1935 selling cine films.
His son, Alan Jessop, presided over the quick expansion of the business, which began selling affordable photographic equipment at a time when cameras became more popular. It had more than 200 stores.
The growth, however, came to a screeching halt as more rivals entered the market and the advent of the internet started to change the face of photography.
It was seized by the banks in 2007 with 81 of its then 315 shops closed and has had a bumpy journey since.
02:16 PM
Markets latest
Quick check on the markets: in early trading on Wall Street, the Dow Jones rose 132.6 points, or 0.41pc, to 32,752.08, the S&P 500 gained 13.94 points, or 0.36pc, to 3,923.46 and the Nasdaq Composite added 24.58 points, or 0.19pc, to 13,002.26.
The dollar has risen to a new nine-month high against the Japanese yen of 109.44 yen, reflecting investor expectations of robust US economic growth as it accelerates its vaccine rollout.
MSCI’s gauge of stocks across the globe gained 0.65pc following broad gains in Europe and Asia.
The FTSE 100 extended gains in afternoon trading, up 0.89pc at 6,733.61.
02:08 PM
Challenging times
Jessops hasn’t been able to trade from its shops during lockdown, but it was already facing a tough time from the rise of online shopping. As PA notes, the latest developments come less than two years after a major restructuring at the chain, which reduced its store estate from 46 sites in a bid to preserve its future.
Geoff Rowley, partner at administrators FRP, said:
Jessops is a long-established British brand, but like many others, it has faced growing online competition, as well as the challenges faced by all high street retailers in operating through the restrictions imposed during the pandemic.
We are working closely with [owners] PJ Investment Group and the wider Jessops management team to consider all options to secure a future for the retailer.
A spokesman for PJ Investment Group said:
Since 2013 we’ve worked hard to support the Jessops brand, and returned the business to profitability in recent years through a complete restructuring and significant investment.
However, the retail landscape has continued to evolve rapidly, and this process has been accelerated by the impact of the pandemic on the high street.Over the last 12 months we have worked closely with Jessops management and assisted them in taking steps to manage the costs throughout the pandemic and have focused on servicing Jessops’ customers through our online store.
01:48 PM
What is a CVA?
Jessops has said it wants to do a Company Voluntary Arrangement (CVA) with its landlords. This is a tactic used by a number of struggling retail chains to avoid collapse. The hope would be that it can cut rents on some stores to make the chain viable again – if its creditors agree.
What is a company voluntary arrangement (CVA)?
01:38 PM
Eight years since last collapse
Jessops’ last brush with administration was in 2013, when it collapsed with debts of £80m. Peter Jones rescued the brand months later with plans to make it an online retailer with a chain of 40 shops, which would offer click and collect.
He told the Telegraph at the time: “I believe there’s going to be a real transition in terms of what online means. People don’t want to have to worry about home deliveries and not being there to collect items they’ve ordered.
“We’ve evaluated how we can cover the UK with roughly 40 stores to allow a collect-in store model, which people want with products like ours because they are technical products.”
He even invited a friend along for the relaunch:
James Corden and Peter Jones in a Jessop store
01:27 PM
CVA sought
Here’s the statement from Jessops:
We have filed a notice of intention to appoint administrators with a view to consider a CVA process in order to protect the business for our staff, our partners and creditors as we look to carve out a new strategy that will enable the business to continue to compete. No doubt, that will include further growing Jessops’ digital offering, as well as considering the opportunities to partner with other retailers to continue Jessops’ high street presence.
We are working closely with key suppliers and partners to agree a way forward and PJ Investment Group have confirmed that they stand ready to provide additional funding if a suitable agreement can be reached on sustainably supporting Jessops in the next stage of its development.
01:25 PM
Jessops files notice to appoint administrators
Jessops, the camera retailer owned by Dragons’ Den investor Peter Jones, has filed a notice to appoint administrators after it was affected by lockdown restrictions.
The company was bought by Mr Jones in 2013. It employs 120 staff and runs 17 stores.
It has hired insolvency specialists FRP and said it is now considering a Company’s Voluntary Arrangement (CVA) restructuring process in a bid to protect its long-term future.
12:26 PM
WeWork to go public in $ 9bn Spac merger
WeWork is set to go public through a merger with a blank cheque company, it has been reported.
The flexible office space company, which famously failed in its attempts to carry off an initial public listing two years ago, will join up with a special purpose acquisition company (SPAC) called BowX Acquisition.
The Wall Street Journal reported the deal will value WeWork, which was founded by Adam Neumann back in 2010, at around $ 9bn (£6.53bn).
Get more details on our tech live blog.
12:17 PM
German factories keep busy
Business morale in Germany is higher this month than it has been in almost two years, as rising demand for manufactured goods keeps factories in Europe’s largest economy humming despite the pandemic and lockdown restrictions, a survey showed on Friday.
The Ifo institute said its business climate index shot up to 96.6, the highest reading since June 2019, from an upwardly revised 92.7 in February. A Reuters poll of analysts had pointed to a March reading of 93.2.
“Despite rising infection numbers, the German economy started spring with confidence,” said Ifo President Clemens Fuest.
11:40 AM
Suez crisis doesn’t deter orders for new ships
Here’s an interesting snippet from Bloomberg on the ongoing Suez canal crisis: it has done little to deter shipping companies from ordering similarly mega-sized vessels.
Korea Shipbuilding & Offshore Engineering and Samsung Heavy Industries – two of the world’s three biggest shipbuilders – announced they’d won orders worth a combined 3.45 trillion won ($ 3bn) on Friday to build 25 container vessels that are all longer than the Eiffel Tower. The ships will be delivered by 2025.
Korea Shipbuilding will build five vessels that can each carry 13,200 20-foot containers for Taiwan’s Wan Hai Lines. Meanwhile Samsung Heavy will build 20 ships that can each carry 15,000 containers.
The Ever Given container ship got stuck across Egypt’s Suez Canal canal early on Tuesday and efforts are still underway to get it afloat.
11:27 AM
FTSE holds onto gains
Let’s check in with the markets: the FTSE 100 is up 0.75pc before lunch, at 6724.60. The FTSE 250 is up 0.9pc at 21467.0.
11:05 AM
BREAKING: Buyer for Honda Swindon plant
Honda’s car plant in Swindow has found a buyer: logistics giant Panattoni will take over the site. It has pledged to invest £700m in the site, starting in Spring 2022.
Production at the plant, which makes the Civic, ends later this year.
Great news just breaking about the Honda site in Swindon and a global purchaser buying it. Hopefully ends uncertainty for both the site but also great opportunities for associates and local supply chain staff https://t.co/DRbDqGGFyJ
— Ian Larrard (@IanLarrard) March 26, 2021
Honda will shut its Swindon, UK plant in July, the company says. The site is to be sold to developer Panattoni, which specialises in new-build industrial and logistics facilities. Panattoni also has a big park in Northampton near the M1, with Eddie Stobart one of its clients.
— Nick Gibbs (@NickGibbs) March 26, 2021
11:01 AM
‘Progress towards true workplace gender equality’
Neha Thethi, head of employment at Lime Solicitors says “the importance of today’s Supreme Court judgment cannot be underestimated – it is the largest equal pay claim in the private sector, and has the potential to open the floodgates to further claims”. She adds:
With the abolition of tribunal fees , such mass actions for equal pay may well increase. The introduction of gender pay reporting means more information on gender pay is available with the inevitable result that this issue is only likely to pick up steam.
Over 40 years ago the Equal Pay Act came into force and we’re still seeing an uneven playing field for working men and women and fighting pay discrepancies. Arguably this legal test is long overdue. If the Supreme Court rules in favour of the employees it would be a victory for a huge number of women, and the outcome will have the potential to mark progress towards true workplace gender equality.
(Note that Asda insists the pay in its stores and distribution centres is the same for colleagues doing the same jobs regardless of their gender – see post below.)
10:46 AM
Who picks up the bill?
Should Asda have to fork out compensation to workers, there’s the small matter of who foots the bill.
The supermarket was bought by the billionaire Issa brothers and private equity firm TDR for £6.8bn in October. Its former owner Walmart retains a minority stake is expected to pay most of the compensation, Laura Onita reported last month:
Sources close to the transaction said there is an arrangement in place with Walmart for a level of indemnity that is “sufficiently large” to cover any back payments if the Supreme Court upholds previous rulings.
The Blackburn-based Issa brothers have raised £3.5bn in debt to pay for Asda. Loan and bond investors were told that the knock-on effect on the new owners would be minimal even if the justices rule in the employees’ favour, which they now have.
Read Laura’s report here.
10:31 AM
‘Watershed moment’
Anne Pritam, partner and employment lawyer at Stephenson Harwood, says it is “difficult to underestimate the significance of this judgment which will send shockwaves far beyond Asda”.
This decision answers the legal question of whether shop-floor and warehouse roles are comparable, but there is still a very long way to go in proving these roles are of equal value. The next hurdle for the claimants will be showing that the work of the shop floor staff is of equal value to the distribution staff and there is no material factor which justifies differences in pay.
It is a watershed moment for the rest of the retail industry, particularly those defending their own equal pay claims – such as Sainsburys, Tesco, Morrisons and Next – and which have similar staffing models and pay structures.
10:25 AM
‘Massive victory’ for shopfloor workers
There are plenty of legal obstacles still to clear, but the GMB union says it will seek to hold talks with Asda to discuss potential £500m compensation for shopfloor workers following today’s ruling on pay.
Susan Harris, GMB Legal Director, says:
This is amazing news and a massive victory for Asda’s predominantly women shop floor workforce. Asda has wasted money on lawyers’ bills chasing a lost cause, losing appeal after appeal, while tens of thousands of retail workers remain out of pocket.
10:17 AM
No compensation yet
The Supreme Court has come to the same conclusion as three previous rulings that shop floor and warehouse roles can be compared, says our retail editor Laura Onita. She adds:
Although it is a major legal victory for current and former Asda workers and a landmark verdict for the private sector, the claimants will now have to argue that the roles are of equal value as part of the broader legal battle. This could go on for years and today’s result does not involve any compensation at this point.
10:12 AM
‘Not the end of the case’
Asda notes that the ruling today is only part one of a three-stage process.
It says the second stage of the process will now determine whether store and distribution roles are of ‘equal value’, which could be followed by a third stage that would consider if there are any factors other than gender why the roles should not be paid equally.
An Asda spokesman says:
This ruling relates to one stage of a complex case that is likely to take several years to reach a conclusion. We are defending these claims because the pay in our stores and distribution centres is the same for colleagues doing the same jobs regardless of their gender. Retail and distribution are very different sectors with their own distinct skill sets and pay rates. Asda has always paid colleagues the market rate in these sectors and we remain confident in our case.
10:06 AM
Asda loses equal pay case
The latest stage in a long-running legal case has just gone against supermarket giant Asda.
The retailer has lost a Supreme Court equal pay fight with store workers.
More than 40,000 Asda store workers, about two-thirds of whom are women, brought equal pay claims saying staff working in distribution depots, most of whom are men, unfairly get more money.
Asda bosses said store jobs were not comparable to distribution centre jobs. Supreme Court justices on Friday ruled against Asda bosses. They decided that store workers were entitled to compare themselves to distribution staff for equal pay purposes.
09:43 AM
Discounting couldn’t stop price falls
Capital Economics notes that the fall in clothes sales came despite shops slashing prices online to clear stock. Kieran Tompkins, Assistant Economist, says:
The weakness in clothing sales, which had slumped by 35pc month on month in the previous month, was despite a sharp fall in clothing prices. Volumes of clothing sales are still 50pc below their pre-crisis level.
He offers an optimistic thought, however:
They should recovery sharply when we all start socialising again.
He adds: “The strength of household goods sales came on the back of consumers buying outdoor products in preparation for the easing of restrictions.” So, Brits are stocking up for garden parties later in the spring.
09:28 AM
Clothes sales struggle
Here’s my colleague Tim Wallace with more on those retail numbers.
Not all types of shop are performing equally, he notes. Sales of clothes fell again from January to February despite companies slashing prices, with shoppers buying less than half as much last month as they did a year earlier. This made it the worst month for fashion retailers since last May.
Clothes stores are classed as “non-essential” retail and so are currently closed. Of those much-diminished sales, more than half are online as there are few alternatives for shoppers.
Overall retail sales were above their pre-pandemic February 2020 level in every month from July to December last year, but the apparel sector did not post the same recovery: at no point did clothes sales recover to within 10pc of their pre-Covid level. This was partly attributed to chains struggling to make their stores attractive while imposing social distancing measures.
Read more of Tim’s report here.
08:48 AM
Aviva sells Polish business to Allianz for $ 2.9 billion
Aviva
Aviva has sold its Polish operations to Germany’s Allianz for €2.5bn (£1.8bn) in cash, completing a programme to sell European and Asian assets that began last year.
Aviva boss Amanda Blanc, who joined the firm as CEO in July 2020, has been selling assets at pace to focus on the life and general insurer’s core businesses of Britain, Canada and Ireland. Aviva also has joint ventures in China and India.
“The sale of our Polish business is an excellent conclusion to the refocusing of our portfolio announced just eight months ago,” Ms Blanc said.
The sale of the eight businesses would generate £7.5bn in cash, she added.
Allianz, which first entered the Polish market in 1997, is Europe’s biggest insurer.
“We are delighted to further strengthen visibility of the Allianz brand in Central Eastern Europe and pursue our successful growth strategy in the region,” Allianz CEO Oliver Baete said.
08:27 AM
Profits slide at Smiths Group
Smiths Group
Smiths Group said that a tightening energy market hit sales in the first six months of the financial year, but it still managed to outperform expectations.
The engineering giant reported pre-tax profits of £67m for the six months to the end of January, a decline of 4pc, while revenue fell 7pc to £1.2bn.
However, revenue and operating profit beat analyst expectations, with the latter coming in at £166m, compared to the £151m analysts had forecast.
“This is a robust set of results relative to our end markets, with a resilient top line, good profit conversion and excellent cash generation,” said chief executive Andy Reynolds Smith.
08:11 AM
FTSE opens higher
London’s blue-chip index has jumped at the open as global vaccine distribution boosted economic optimism despite an increase in Covid-19 cases.
European market data – Bloomberg
07:52 AM
‘Shoppers effortlessly switched to digital channels in lockdown’
Ocado
When it came to buying goods during the third lockdown, Britons knew where to go after two previous attempts last year. Richard Lim, chief executive of Retail Economics, says:
The industry continued to see a sharp polarisation in the performance of food and non-food as restrictive measures forced the closure of many retail premises. Non-food retailers saw sales plummet on the previous year with apparel retailers being some of the hardest-hit.
But as the third lockdown took hold, shoppers effortlessly switched to digital channels as the proportion of online sales reached new record highs. Online grocery shopping continues to grow exponentially and it seems inevitable that some consumers will adopt these shopping habits for good.
Likewise, retailers have become increasingly agile operating through periods of lockdown. Strategies are in place and measures have been formed to quickly shift towards digital channels for many parts of the market. That said, the industry continues to struggle with the sheer pace of change. Significant investment has been made in boosting warehouse capacity, enhancing logistics and expanding distribution networks to meet the challenge of a step-change in online shopping.
07:34 AM
‘Brighter days ahead for retailers’
Commenting on this morning’s numbers, Lynda Petherick, head of retail, Accenture UK and Ireland, says:
A dire January capped off what’s been a rocky year for retailers, to put it mildly. Finally though, thanks in large part to the impressive vaccine rollout so far, February’s figures show early signs that there are brighter days ahead for retailers.
However, we are still a long way off from recovering to numbers compared to this time last year. With the April reopening date for non-essential retail still on the cards, retailers will be planning how they can make the most of pent-up consumer demand this spring and beyond.
If the last year has shown us anything, it’s that consumers are willing to embrace e-commerce wholeheartedly when deprived of physical retail, which has been especially evident in this month’s record-breaking online expenditure.
While we expect this shift online to outlast the pandemic, catering for the increased demand for physical stores is also crucial. Brands will have to think carefully about how they factor in the different channels to their future strategies to make sure all customer needs are met, combining a safe and engaging in-store experience with an advanced digital offer. Those that are slow off the mark now will find it harder to catch up later.
ONS chart
07:23 AM
Online sales hit record high
While most high street shops remained shut during February, online sales soared – hitting record highs.
The proportion spent online increased to 36.1pc in February, the ONS said, the highest on record. This compared with 35.2pc in January 2021 and 20.0pc reported in February 2020.
07:06 AM
Retail sales rise 2.1pc in February
Shoppers
Retails sales in the UK bounced back in February after a steep decline during the beginning of the third national lockdown in January.
Sales rose 2.1pc when compared with the 8.2pc in the previous month, but were still down 3.7pc on a year earlier before the pandemic properly hit.
The Office for National Statistics says:
Non-food stores provided the largest positive contribution to the monthly growth in February 2021 sales volumes, aided by strong increases of 16.2pc and 16.1pc in department stores and household goods stores respectively.
Clothing retailers reported the largest fall, of 50.4pc, in sales volumes when compared with February 2020 before the coronavirus pandemic; automotive fuel stores also reported a large annual decline of 26.5pc as travel restrictions continued to hit sales in that sector
06:53 AM
Agenda: Retail sales set to rebound in February
Good morning. Retail sales data for February is being released in just under 10 mins and it is expected to show a rebound from an 8.2pc decline in January.
Meanwhile the FTSE 100 is set to open higher.
5 things to start your day
1) EU attacks call into question AstraZeneca vaccine pricing: Exclusive: Oxford’s Sir John Bell who helped develop the jab says morale at the drugmaker is being damaged by criticism of its safety and efficacy.
2) Rolls-Royce bulk-buys Liberty as Kwarteng vows support: Rolls-Royce is buying enough steel from Liberty to last until Christmas to guarantee supplies in case Gupta’s struggling empire collapses.
3) Zuckerberg blames Donald Trump for encouraging Capitol rioters: Appearing in a US hearing, Facebook’s chief executive suggested Donald Trump was partly responsible for the Washington DC insurrection.
4) Santander to close 111 branches this summer: The Spanish lender is the latest banking giant to slash the number of owned branches and offices after Covid left buildings largely deserted.
5) Ford pulls the plug on the Mondeo after 28 years: About 5m have been sold since its 1993 launch but production at the Valencia plant will end next year amid rising demand for SUVs.
What happened overnight
Asian stocks rose Friday, tracking US peers as vaccine distribution bolstered economic optimism despite a climb in global Covid-19 cases. Oil was on course for a third week of losses.
A regional share gauge added more than 1pc, led by Chinese and Japanese stocks. US and European equity futures pointed higher after the S&P 500 advanced and small-caps rallied, buoyed by President Joe Biden’s doubling of a vaccination target. U.S. banks extended gains in after-hours trading as the Federal Reserve signalled an end to pandemic-era dividend curbs.
Ten-year US Treasury yields rose slightly after another lackluster auction of seven-year notes. The reaction was muted compared with the upheaval in bonds and interest-rate sensitive stocks following poor demand at last month’s sale. The dollar dipped but remained on course for its best week in three.
Coming up today
Corporate: Smiths (Interim results)
Economics: Retail sales (UK); IfO business climate (Germany); business confidence (Italy); personal income and spending (US)