Aldi outlines £1bn expansion plan
Aldi is planning an expansion plan which will see it invest £1bn to open over 400 new stores across the UK in the next two years.
The discount supermarket has set a target of 1,200 stores by the end of 2025 – it currently has just over 840 stores, which means opening a new store every week for next two years on average. This includes an increased focus on London where it wants to more than double stores.
Giles Hurley, chief executive, says: “While our expansion will continue to reach every part of the UK, we’re increasing our focus on London where our market share is just 3.4% compared to 8.1% nationally. London shoppers regularly tell us they would switch to Aldi if there was one nearby, so there is clearly a significant growth opportunity for us in the capital.”
The announcement comes as the store’s operating profits fell by 26% last year. For the year to December 31 2018 Aldi UK and Ireland made an operating profit of £197.9m, down from £265.9m in 2017. However, sales increased 11% to £11.33bn.
BBC says TV is entering ‘second wave of disruption’
TV is entering a “second wave of disruption”, according to the BBC as it looks to compete with Apple’s new streaming service.
Addressing an audience at the upcoming Royal Television Society convention in Cambridge on Thursday, the BBC director-general, Tony Hall, will say: “Our industry is about to enter a second wave of disruption. The first was about the rise of Netflix, Amazon and Spotify: market shapers that fundamentally changed audience behaviour, often at the cost of huge losses or massive cross-subsidy.
“The second wave will see a range of new entrants entering an already crowded market. We saw it last week as Apple announced its new subscription service. Disney, Hulu and others are to follow. This is, of course, great for audiences. Possibly.”
Apple unveiled Apple TV Plus last week which will see it provide a streaming service to rival Netflix with original TV shows and films.
Hall will add: “The established streamers will need to fight harder to offer the value they currently give today.”
He will also argues that purpose is becoming even more vital in the face of a more competitive environment. “Purpose and values matter today more than ever, as people pick and choose services for ethical reasons as much as economic ones. Secondly, no one offers the range of content, in so many genres, on so many platforms, as the BBC.
“We’re not Netflix, we’re not Spotify. We’re not Apple News. We’re so much more than all of them put together.”
Restaurants face tough year with rise in insolvency
The number of restaurants collapsing into insolvency has risen by 25% in the last year amid tough competition on the UK high street.
Roughly 1,410 restaurants became insolvent in the year to the end of June, up by a fifth on the previous 12 months, according to figures by accountancy firm UHY Hacker Young.
But while troubled big-name chains such as Jamie’s Italian and burger chain Byron have garnered the most attention thousands of smaller businesses are also struggling, according to the report.
Peter Kubik, partner at UHY Hacker Young, says: “Good restaurants and bad have all struggled from over-capacity, weak consumer spending and surging costs.”
He adds: “Having a loyal following is great but if that loyal following stops going out then you have a problem.”
UHY Hacker Young says the rapid growth of the causal-dining sector since the 2008 financial crisis had resulted in an oversaturated mid-market, this plus rising costs, and a slowdown in consumer spending compounded by Brexit, shows no signs of changing soon.
Thomas Cook buys time for rescue deal
Thomas Cook has secured an extra week to finalise its £1.1bn rescue deal. The troubled holiday company had originally set a meeting with bondholders for Wednesday to agree terms but has now successfully pushed this back.
The deal needs the backing of three quarters of bondholders to succeed with Thomas Cook hoping a delay will give it more time to negotiate.
Thomas Cook’s struggles have been well documented. In May, the firm reported a £1.5bn loss for the first half of the year. It has also issued three profit warnings over the past year and is struggling to reduce its debts.
However, last month the holiday firm said it had agreed a deal for a takeover approach for its tour business from its largest shareholder Fosun.
It has blamed a series of problems for its profit warnings, including political unrest in holiday destinations such as Turkey, last summer’s prolonged heatwave and Brexit. But it is also facing difficult industry dynamics including competition from online travel agents and low-cost airlines.
UK faces slowest growth since recession
The UK is facing its slowest growth since the recession, according to the British Chambers of Commerce (BCC).
The group predicts spending is due to decline 1.5% this year, fuelled by Brexit uncertainty and the US/China trade war.
The length of the downturn is already thought to exceed the slump after the 2008 financial crisis, when business investment fell by a greater degree but only for two years. The BCC warns relentless Brexit uncertainty is preventing firms from investing and diverting resources into no-deal planning.
The BCC, whose members employ about one-in-five British workers, cut its economic growth forecast for this year to 1.2% from its June forecast of 1.3% and lowered the figure for 2020 to 0.8% from 1.0%.