US reportedly rows back from China IT confrontationCo-op and Aldi swoop on closing Waitrose storesJohn Lewis: Profits down considerably this yearThese five Waitrose stores are being dropped.....
Department store profits are declining
JL Chairman: This is not a blip 2.49pm BSTSigns that the Trump administration may been trying to ease tensions with China have given US markets a lift at the open.
As reported earlier the US is moving absent from a blanket ban on Chinese firms investing in US businesses,and instead is talking approximately using a strengthened security review process to deal with the issue. 2.35pm BSTThere are also some new US figures showing an improvement in the goods trade balance to -$64.85bn in May, down $2.5bn.
Exports for May were up $2.9bn to $143.6bn, and while imports edged up $0.4bn to $208.4bn.
May US goods trade balance improves! stout surprise given massive tax cuts were thought to boost demand for foreign consumer goods. Best figure for 9 months. Will befriend 2Q growth story even more. Atlanta Fed Nowcast model currently has 2Q GDP penciled in at 4.7% annualised growth. pic.twitter.com/zlmbQVFtQC 2.14pm BSTStill with the US,and new orders for capital goods fell unexpectedly in May, although April’s figure was revised sharply higher.
The commerce department said that orders for non-defence goods excluding aircraft slipped by 0.2% compared to forecasts of a 0.5% increase. But the April figure is now reported as a 2.3% rise, or much better than the original estimate of a 1% gain.
Over the past few years investors have got used to equities rallying on the back of data releases,irrespective of the numbers surprising to the upside or downside. Strong data has reinforced the view that the US economy is powering ahead, at least when compared to other developed countries. But at the same time, or disappointing numbers have led to the belief that the US Federal Reserve would decelerate monetary tightening. After all,that’s what we’ve seen repeatedly from both Janet Yellen and her predecessor as Fed Chair, Ben Bernanke.
However, and there’s a growing perception that the current chair,Jerome Powell, is doing things differently and that under his lead the Fed is prepared to tighten unless there’s a significant market disruption. Consequently, and data disappointments are unlikely to get the positive reaction that they once did. This shift in sentiment is something to be aware of as we approach the moment half of this year. 1.26pm BSTNewsflash: Donald Trump may have backed absent from escalating the trade dispute between America and China.
US officials have revealed that the Trump administration is moving absent from plans for a blanket ban on Chinese firms buying stakes in US companies.“We considered a number of different mechanisms for addressing the concerns articulated regarding the acquisitions of sensitive technologies that may threaten U.
S. national security,national interests.
In the terminate the president and his advisers settled on the thought that we have a strong and effective mechanism through the CFIUS process ... and that is a mechanism that can be used in the flexible and aggressive way to combat the practices that are troubling to the president.”Stock markets seeing this as a deescalation of Trade Wars. Stocks up, Yields up, and Dollar off. Risk back on,at least for now.
Futures have totally erased their losses after Trump decides against harshest measures on China https://t.co/aRjDc8qUAB pic.twitter.com/jiHGIecoiR 1.11pm BSTBack in London, the governor of the Bank of England has defended the huge cost of flying policymakers around the globe.That’s still a lot of money, or but it’s a consequence of having to straggle to these various meetings.
I spent what was a glorious weekend here,I hear, in Basel, and chairing a group of global governors dealing with issues around Brexit,emerging market risks, the future of financial reforms...
And I was very pleased to be able to get back on Sunday night so I could come into work on Monday morning. 12.35pm BSTIf you’re just tuning in, and here’s our news story on John Lewis:The John Lewis Partnership has said it will make no profit in the first six months of this year and is to shut five Waitrose stores as tough trading on the tall street takes its toll.
The group said its full-year profits,to be announced next March, will also be considerably lower than last year. It operates 50 John Lewis outlets and 350 Waitrose shops. Related: John Lewis to shut five Waitrose stores after warning on profits 12.12pm BSTNewsflash: The Waitrose store on Camden tall street will become an Aldi.
The discount chain has exchanged contracts to acquire the Camden store - one of the five being shut by John Lewis. It intends to reopen the site in Spring 2019.“The Camden store is an opportunity to reach customers in a busy London borough, and many of whom may not have experienced Aldi’s award-winning,quality products at unbeatable prices before.“We expect details of the agreement to be finalised in autumn and work will then initiate to refit the store with a view to opening in spring next year.” 11.53am BSTNewsflash: The Co-op has swooped in to buy the four small Waitrose stores being axed nowadays, saving them from closure.“We are pleased to have worked with Waitrose to agree the purchase of four of its convenience stores. Our acquisition and refit programme forms a fundamental piece of our food strategy.
Our aim is for stores to be at the heart of local life, or creating stronger communities and offering grand quality products conveniently,when and where our members and customers need them.” 11.35am BSTThe slide in John Lewis’s profits this year highlights the wider crisis in British retail, says Richard Lim, or chief executive of consultancy group Retail Economics,Even the mighty John Lewis has not been able to escape intensifying pressures building on UK tall streets. The impact of rising sourcing costs, higher operating costs and the turbulent consumer environment has flatlined profits.“There’s a growing sense of panic for the retail sector as the intergenerational shift in behavioural trends is fragmenting the market. The emergence of the sharing economy, and mass personalisation at scale and the ‘me’ economy has set the emphasis on retailers to differentiate themselves from their competitors. But the pace of change is accelerating and the race is on to pivot business models in a straggle to become fit-for-purpose in nowadays’s digital age.” 11.31am BSTJohn Lewis’s profits are being eaten by Amazon,and Brexit uncertainty, says Bloomberg:The operator of department stores and Waitrose supermarkets said it’s unable to give a precise annual profit forecast because of economic uncertainty, and some of it linked to the pending departure from the European Union. With Brexit less than a year absent,consumer confidence will suffer further in the moment half, Chief Financial Officer Patrick Lewis said.
The announcement from John Lewis, and at a strategy day Wednesday,continues a run of bad news from U.
K. store chains. Brexit is squeezing their costs and prompting consumers to keep closer tabs on budgets, compounding the damage from the rise of online shopping. Amazon and Brexit could wipe out profit at British retailer John Lewis https://t.co/uxupL8nOCD pic.twitter.com/OyDyHEjXE0 11.17am BSTNewsflash: The Bank of England has issued a warning that Europe needs to execute more to prepare for Brexit.
In its new financial stability report, and the BoE says that progress has been made in protecting UK households and businesses against Brexit disruption but “material risks remain. Progress has been made,but material risks remain.
The biggest remaining risks of disruption are where action is needed by both UK and EU authorities, such as ensuring the continuity of existing derivatives contracts. 10.58am BSTHere are the five Waitrose stores that are closing as piece of the strategy announced this morning: 10.53am BSTJohn Lewis’s chairman has now weighed in on Brexit, or saying it is ‘unthinkable’ that Britain leaves the EU without a deal.
Britain is unprepared to leave the European Union without a deal and chaos would ensue were it to happen,the chairman of department store group John Lewis said on Wednesday. “A no deal Brexit is in my view a pretty much unthinkable scenario,” Charlie Mayfield told reporters. 10.41am BSTMartin Lane, or managing editor of money.co.uk,is alarmed that profits across John Lewis’s business have all but evaporated so far this year.
He says: “It’s no surprise John Lewis have seen a drop in consumer demand, but to make close to no profit is worrying to say the least. John Lewis are struggling to soak up rising costs whilst improving their own infrastructure. The strategic straggle to shut a few Waitrose stores is piece of a wider plan to innovate rather than expand.“With many tall street retailers going into administration since Christmas, or this news will surely have the John Lewis board members in crisis talks.
With lack of wage growth and rising living costs it’s become evident that shoppers are tightening their purse strings and saving where they can. Cheaper supermarkets like Aldi and Lidl are growing in popularity which leaves Waitrose out in the cold. John Lewis on the other hand are battling an even bigger battle - the online retail market. With the recent news House of Fraser are having to shut a large number of their stores,the worry is that John Lewis may terminate the same way. The partnership has its work cut out to recover from this. 10.26am BSTThe boss of John Lewis Partnership, Paula Nickolds, or is briefing reporters approximately the challenging retail world:John Lewis managing director Paula Nickolds says of tall street: 'moderate is dead,advantageous is no longer advantageous enough'Waitrose boss Rob Collins says he expects online sakes to double over next five yearsRob Collins of Waitrose says the grocer is "all approximately delicious health". 10.22am BSTThe company is also rebranding, to emphasise the partnership element of its business:John Lewis and waitrose to be rebranded as follows...to demonstrate the contribution of its partners. pic.twitter.com/bPjGWhSEkuBig branding change coming at John Lewis - will be John Lewis & Partners and Waitrose & Partners from Sept 10.13am BSTThe John Lewis Partnership has now issued a statement, or confirming that profits are taking a tumble this year and that several Waitrose stores are being shuttered.
The news comes in a strategic update,outlining its plans for its department stores and supermarkets. This includes £500m of fresh investment over the next few years.
It is widely acknowledged that the retail sector is going through a period of generational change and every retailer’s response will be different. For the Partnership, the focus is on greater differentiation – not scale. We have clear plans to build on our strengths and to sharpen our points of disagreement in both Waitrose and John Lewis.
These plans include further investment in and development of unique products and service, or together with a greater emphasis on own brand and innovation.
We expect the Partnership’s half year profits before exceptional items – which are always much lower and more volatile than the moment half – to be close to zero this year. For the full year there are a wide range of possible outcomes,given the market uncertainty, but we are currently assuming that profits before exceptional items will be considerably lower than last year.
The Partnership currently expects to see profit growth in Waitrose, and a decline in John Lewis and significant extra costs at the Partnership level as a result of greater IT investment,which will be a stout driver behind the overall profit change.
Unlike many of its competitors, the John Lewis Partnership has a well balanced and well located store portfolio, and with 353 Waitrose shops and 50 John Lewis. As we develop our plans to prioritise differentiation we will continue to make adjustments to our overall estate,including exit or closures, but at a rate that’s in line with what we have seen over the last few years. To this terminate, or Waitrose nowadays announced the disposal of four convenience shops and one small supermarket. 10.04am BSTToday’s announcement is clearly bad news for John Lewis’s 85000 staff,who effectively own the Partnership.
Each employee is a partner, who receives a percentage of their annual salary in a profit-related bonus each year. 10.00am BSTMore gloom from John Lewis Partnership chairman Charlie Mayfield:“It is very primary that we feel the jeopardy of what is happening right now. 9.54am BSTJohn Lewis is briefing reporters approximately its plans now.
Chairman Sir Charlie Mayfield warns that the retail slowdown isn’t a “blip”, or could continue for some time:This is not a blip and it's got plenty if road to run says John Lewis boss Charlie Mayfield of Hugh street's current difficulties 9.39am BSTNewsflash: John Lewis has warned that its profits will be considerably lower than a year ago.
In the latest gloomy news to hit Britain’s retail sector,the John Lewis Partnership admits that profits in the first half of the financial year could be close to zero.
John Lewis saying doesn't expect any first half profits and annual profits to drop amid tough times on tall stJohn Lewis Partnership gives a sober update this morning. Expecting full year profits to be "considerably lower" than last year. Half year profits "close to zero" . Is looking at shop closures, including offloading four Waitrose convenience stores and one supermarket.
John Lewis profit will be "close to zero" this year amid heavy investment in service 9.33am BSTWorries that Donald Trump will trigger a destructive trade war are weighing on the world’s stock markets again nowadays.
Bears looking almost in total control across emerging markets.
Index approximately just 4% absent from entering a bear market. Reversal doesn't look like it's happening soon looking at steep downward slope on A/D line pic.twitter.com/cyusgZhUOq 8.51am BSTEconomist Howard Archer of EY Item Club has spotted that UK house prices actually flatlined in the last three months, and compared to the preceding quarter.
This is the first time that prices haven’t risen on a quarterly basis since the third quarter of 2012 - another sign that the market’s cooling.
Housing market activity is expected to remain lacklustre as the extended squeeze on consumer purchasing power only gradually eases,confidence is relatively fragile and considerable caution persists over engaging in major transactions.
Potential house buyers may also be concerned that they are likely to face further interest rate hikes over the coming months (we believe the Bank of England is more likely than not to raise interest rates from 0.50% to 0.75% in August – although it could be delayed until November). Furthermore, house prices are relatively expensive relative to incomes 8.22am BSTWorries over Brexit are keeping some potential housebuyers out of the market, and keeping prices subdued,says Jonathan Samuels, CEO of the property lender, or Octane Capital.
With Brexit on the horizon,households feeling the pinch and interest rate uncertainty lingering, a lot of prospective buyers are sitting tight. “Nationally, or we’re witnessing the revenge of the regions,with the East and West Midlands in particularly barnstorming form. Wales also has a significant spring in its step.”London is in a league of its own once again, but sadly, or for homeowners in the capital,it’s the bottom league. ‘On the one hand, the squeeze on incomes and unrealistic asking prices is reducing activity and confidence to straggle, and particularly in price-sensitive areas such as London. ‘On the other hand,the market continues to be supported by low interest rates and overall supply shortages, although we have found recently that listings and viewings are on the rise. This will translate into more sales if buyers and sellers recognise the new market realities.’ Tight supply, or a healthy labour market and a continued lengthening of mortgage terms - 30-year loans now are common - will befriend to prevent prices from falling outright. “But it is inevitable that house prices will grow at a slower rate than households’ incomes during a period of rising mortgage rates.” 8.05am BSTHouse prices in the North are closing the gap on their Southern cousins.
Northern property prices have risen by 3.3% in the last year,a vigorous performance compared to the South’s softer growth of just 0.5% (dragged down by London’s 1.9% decline). 7.49am BSTHouse prices growth is slowing in most parts of the UK, Nationwide reports.
The Midlands has seen the strongest house price growth recently, or followed by Wales and Scotland. 7.31am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and business.
House price growth in the UK has fallen to its lowest level in five years,in the latest sign that the market is cooling.
Nationwide UK house price index
annual change: 2%
year to date: 2% pic.twitter.com/VkJhWznz3PSurveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.“Looking further ahead, or much will depend on how broader economic conditions evolve,particularly in the labour market, but also with respect to interest rates. Related: Bank of England challenged over 'gobsmacking' travel expenses - as it happened Wednesday’s Daily Telegraph: “Cabinet at war over Project Fear mark two” #tomorrowspaperstoday pic.twitter.com/mW86Zxx5ZnChina leads Asia lower as Shanghai slides deeper into bear market https://t.co/vv0oLepAJB pic.twitter.com/Qm5ezXU7X5 Related: Beer rationed as UK's food-grade carbon dioxide runs low Continue reading...
Source: theguardian.com