Greggs to open new logistics site as it rolls to 3,500 store target
Greggs has invested in a new logistics site in Derby, to help support its expansion of 3,500 stores across the UK.
The steak bake champion said on Monday it has entered into a lease agreement for a new frozen production and logistics facility in Derbyshire.
It forms part of the no frills bakery chain plan to double its revenue over the coming years.
The new facility is being developed at SmartParc SEGRO Derby on a food manufacturing site in Spondon, Derby, with Greggs expected to enter in 2026.
Roisin Currie, chief executive at Greggs described the move as a “significant step” in Greggs supply chain investment.
She said: “We are delighted to announce our new state-of-the-art facility at SmartParc SEGRO Derby. This purpose-built site offers significant flexibility to add new capabilities and lines as our business evolves.
“This is a significant step in our supply chain investment and will provide much-needed manufacturing and logistics support to power our ambitious growth plans.”
Greggs’ market share is at an all-time high, as the business continues to win the hearts of customers thanks to its low prices.
The New-castle headquarters business currently has 2,500 shops trading and it expects to open between 140-160 net new shops during 2024.
The longer-term target is to have significantly some 3,500 shops trading in the UK.
Back in May, the firm said it booked £693m in sales for the first 19 weeks of the year, compared to £609m the year before. It credited “delivery sales, evening trade and increased participation in the Greggs App” for the bump in transactions.
Labour to U-turn on lifetime pensions allowance in boost for wealthiest earners
Labour has reportedly abandoned plans to bring back the lifetime pensions allowance, in a move which will boost some of Britain’s most wealthiest earners.
Shadow chancellor Rachel Reeves has supposedly dropped the proposal from Labour’s manifesto following fears it would confuse savers and be difficult to reintroduce, sources told The Financial Times.
In his budget last year, chancellor Jeremy Hunt ditched the lifetime pensions allowance, which was the total amount workers can build up in all their pension savings without incurring a tax charge.
The move, which came into effect in April 2023, was welcomed by high earners across the UK who were at risk of breaching the old £1.07m cap.
At the time, Reeves vowed to reverse the change, describing the move as “the wrong priority, at the wrong time, for the wrong people”.
A Labour source told the outlet: “The Conservatives have botched their policy of abolishing the lifetime allowance, with thousands of people approaching retirement being left in limbo because of errors in legislation.”
“Labour’s priority is to bring stability and certainty back to the economy,” they added.
The opposition party is currency leading the Conservatives by 20 per cent.
It is a signal that Reeve, who will be the first female chancellor if Labour win the election, is trying to de-risk Labour’s manifesto to avoid being attacked by the Tories.
Her allies also told the outlet the party had not placed the £800m that would have been raised from reintroducing the LTA for any of Labour’s spending plans. “There will [be] no black hole as a result,” said one.
City A.M. has contacted Labour for comment.
Macron snaps: French set for snap election after Le Pen’s Euro gains
President Emmanuel Macron has dissolved the lower house of France’s parliament in a surprise announcement sending voters back to the polls in the coming weeks to choose legislators, after his party was handed a humbling defeat by the far right in the European elections.
The legislative elections will take place in two rounds on June 30 and July 7.
The announcement came after the first projected results from France put the far-right National Rally party well ahead in the European Union’s parliamentary elections, handing a chastening loss to Mr Macron’s pro-European centrists, according to French opinion poll institutes.
Marine Le Pen’s anti-immigration, nationalist party was estimated to get around 31 per cent- 32 per cent of the votes, a historic result more than double the share of Mr Macron’s Renaissance party, which was projected to reach around 15 per cent.
Mr Macron himself was not a candidate in the EU elections and his term as president still runs for three more years.
He said the decision was “serious” but showed his “confidence in our democracy, in letting the sovereign people have their say”.
“In the next few days I’ll be saying what I think is the right direction for the nation. I’ve heard your message, your concerns, and I won’t leave them unanswered,” the president said.
In latest legislative elections in 2022, Mr Macron’s centrist party won the most seats but lost its majority at the National Assembly, forcing legislators into political manoeuvring to pass Bills.
With Sunday’s decision, he is taking a big risk with a move that could backfire and increase the chances of Ms Le Pen eventually taking power.
A scenario in which an opposition party would eventually win a parliament majority could lead to a fraught powersharing situation called “cohabitation”, with Mr Macron to name a prime minister with different views.
Ms Le Pen, who heads the National Rally group at the National Assembly, “welcomed” Mr Macron’s move.
“We’re ready for it,” said Ms Le Pen, who was the runner-up to Mr Macron in the last two presidential elections.
“We’re ready to exercise power if the French people place their trust in us in these future legislative elections.
“We’re ready to turn the country around, ready to defend the interests of the French, ready to put an end to mass immigration, ready to make the purchasing power of the French a priority.”
The EU election results were a hard blow for Mr Macron, who has been advocating for Europe-wide efforts to defend Ukraine and the need for the EU to boost its own defences and industry.
The National Rally’s lead candidate for the EU elections, Jordan Bardella, campaigned for limiting free movement of migrants by carrying out national border controls and dialling back EU climate rules.
The party no longer wants to leave the EU and the euro, but aims to weaken it from within.
“Tonight, our compatriots have expressed a desire for change,” Mr Bardella said.
“Emmanuel Macron is tonight a weakened president.”
An official at Mr Macron’s office said the decision to dissolve the National Assembly was justified by the “historic score of the far right” that could not be ignored and the current “parliamentarian disorder”.
“You’re never wrong when you give the people a say,” said the official.
EU election projections also show a resurgence of the Socialist Party, with about 14% of the votes.
The party campaigned on more ambitious climate policies and protections for European businesses and workers, with about 14% of the votes.
Reacting to Mr Macron’s announcement, far-left politician Francois Ruffin called on all leaders from the left, including the Greens, to unite under a single Popular Front banner.
“To avoid the worse, to win,” he wrote on X.
France is electing 81 members of the European Parliament, which has 720 seats in total.
Press Association
London office market going strong as more new projects emerge
The London office property market is continuing its strong rebound, according to fresh data out today, as more new projects get underway in the City.
The total volume of new starts between October 2023 and March this year came in at 4.2 million sq. ft across 42 projects, according to Deloitte’s London Office Crane Survey.
While this marked a slight dip on the last six month period, which was a record high, the latest figure is still “well above” the 10-year average of 3.3 million sq. ft, the survey said.
The new data comes after a number of high-profile office leasing deals were inked in recent weeks.
In April, hedge fund Citadel agreed to pre-let at least 250,000 sq ft, or a third of the space, at new incoming skyscraper 2 Finsbury Avenue.
The new building, which is part of a joint venture between British Land and Singapore’s GIC, is currently under construction and is due to be completed in 2027.
The survey said that 7.5 million sq. ft. of office space was delivered in the capital last year – the second highest annual completion volume on record.
So far in 2024, 1.8 million sq. ft. of new office space has been brought to market, with the survey expecting a total of between five and seven million sq. ft to be delivered by the end of this year.
The volume of office space currently under construction is at an all-time high of 16.4 million sq. ft. across a total of 127 schemes.
Urban Pubs and Bars aims to double estate as expansion continues
Bosses at Urban Pubs and Bars have said they hope to double the size of the London pub group amid continued strong demand from punters.
The premium pub operator – which runs 42 venues – said it wanted to carry on the momentum from recent expansion, hailing a strong pipeline of potential new openings.
The company last month marked its 10th anniversary, after the group launched with the Whippet pub in Kensal Rise.
Urban has sped up its growth in more recent years, including through the acquisition of 13 former Barworks venues in 2021.
Malc Heap, co-founder of the group, said it hopes to maintain a strong pace of pub openings in the coming years.
He said: “We’ve got to 42 pubs after some really strong openings over the past few years, doubling us in size.
“And we’re hoping we can do that again over the coming years too.
“Our balance sheet is in a really good position to allow us to move when good opportunities arise and we are really happy with our pipeline.
“Our immediate ambitions are to keep growing. Our performance and growth has been really good for the past two or three years so we are taking a lot of confidence from that and our good management team.”
Earlier this year, the pub group – which is backed by investors Davidson Kempner and Global Mutual – announced earnings before interest, tax, depreciation and amortisation of £6.4 million for the year to April 30 2023.
This represented an 11 per cent rise on the previous year.
It came as the group revealed that like-for-like sales grew by 17 per cent while turnover rose by almost 60 per cent to £52.2 million on the back of its continued expansion.
The company said it will target more sites in London as part of its growth strategy, amid positive demand from customers in the region.
“London is a competitive market but we will still focus on growth there because it’s a market we know, we are confident in,” Mr Heap said.
Henry Saker-Clark, Press Association
Oxford Street retailers call for ‘comprehensive’ reform to business rates
A business group that represents dozens of major retailers on London’s Oxford Street has called for a “comprehensive” reform to business rates to boost Britain’s high streets.
As part of its new manifesto for the next government, the New West End Company said it is calling for a “fairer system that does not simply shift the bill to online businesses but reflects the reality of today’s multi-channel sales model”.
A report by Atlus Group last year found that a host of retail, hospitality and leisure properties in London could be faced with an extra £575.55m in business rates next year because they were not eligible for support measures outlined by the government.
Dee Corsi, chief executive of the New West End Company, said: “As the election nears, ‘growth’ has become a buzzword for both Labour and the Conservatives.
“But if our nation’s politicians are serious about delivering for the business sector, we need to take a long-term approach that tackles unwieldy business rates, encourages innovation by reforming the rigid planning system, and keeps streets safe by remodelling police funding.”
She added: “Our manifesto, informed by the more than 600 UK and international businesses that the New West End Company represents, offers any future government a roadmap to do just that.
“In a little under four weeks the public will have decided on who they want to lead the country. When the nation has had its say, I hope that the government will look to the recommendations of the nation’s businesses so that they can deliver on the promise of growth.”.
Over the weekend, opposition party Labour promised to pull up the shutters for small businesses as part of its plan to revitalise the high street.
As part of its plan Labour said it would “replace the business rates system, with a new system that will level the playing field between the high street and online giants”.
New West End also called for the reintroduction of tax free shopping for international tourist to “restore the UK’s competitive edge”.
The government ditched the VAT refund for tourists in 2021, when Prime Minister Rishi Sunak was Chancellor, which has since been dubbed the ‘tourist tax’.
The New West End Company said: “The impact of removing tax-free shopping is clear; tourist spend has fallen across the country and is soaring in nations such as France and Italy, forcing British businesses to trade at a disadvantage.
“NWEC is calling for the reintroduction of tax-free shopping to restore the UK’s competitive edge, whilst simultaneously supporting businesses and supply chains across the nation.”
City A.M. approached both the Conservative and Labour parties for comment.
The City is where science and finance meet to solve the world’s problems
The City is bringing together investors and inventors to make sure the future of space technology is sustainable, peaceful and equitable, says Michael Mainelli
Last week, here in the City of London, the Commonwealth Secretariat launched its new space protection initiative, CommonSpace. This took place at the City’s science and innovation banquet, celebrating the City of London as a centre for science and technology, which in turn reinforces its standing as a global financial centre. This is at the heart of this year’s mayoral theme, Connect To Prosper: celebrating the knowledge miles of our Square Mile. 40 learned societies, 70 universities, and 130 research institutes surround the City of London, making this the world’s most productive concentration of knowledge networks – the world’s coffee house, where science and finance meet to solve global problems. There is no challenge more global than how we manage space.
CommonSpace integrates the Commonwealth’s plan with the principles of the Astra Carta Framework launched by His Majesty the King to help companies align their space activities with global sustainability goals. Building on the Lord Mayor’s Space Protection Initiative, launched at the International Astronautical Congress 2023, which aims to protect our planet from the growing environmental and financial problem of space junk, CommonSpace brings together 56 member states of the Commonwealth, all working to ensure the future of space is sustainable, peaceful, and equitable.
We need space for our defence, for our economic prosperity and for monitoring our environment. Defence, because we want to see what our neighbours are up to.
Economic prosperity, because from internet access to mobile phone coverage to weather data, we all depend on space technology. Global satellites underpin at least 18 per cent of UK GDP, supporting everything from mapping to weather forecasting, monitoring the power grid and enabling every single financial transaction. Indeed, the space sector is shifting from one that has been largely governmental to one increasingly commercial.
And the environment, because space is an essential part of meeting our climate change and sustainable development goals. In fact, as the UN has pointed out, nearly 40 per cent of sustainable development targets use earth observation and global navigation satellite systems. There is no way we will reach net zero with the current rate of increase of space junk. So, if we want to save our planet, we need to look beyond it.
The problem is, Earth’s orbit is becoming overcrowded, not only with new satellites, but with thousands of old ones and more than a million pieces of debris. This affects the space investment landscape and risks stifling innovation.
The City of London must take a lead in tackling this challenge. The UK is the leading destination for space investment in Europe and receives 17 per cent of all global space investment, which supports almost 50,000 jobs. We are mobilising this expertise to provide Space Debris Removal Insurance Bonds and other financial products to help companies bring space junk safely out of orbit. These insurance bonds will cover space companies with the ability to de-orbit third party space debris.
The aim is to help keep space ‘clutter-free’, seeing if we can move forward to G7 and perhaps G20 communiqués on space debris. That could, for example, involve governments requiring proof of adequate financial means for retiring unused satellite and launch vehicle materials before permitting launch, orbit, registration, or ground station use. We would like to work with the private sector to develop a market for such guarantees and require adequate financial guarantees as a condition of launch by the end of this decade.
If we would not accept waste being dumped on the street, we should not accept it in space either. Using our expertise in space and insurance, the UK has the opportunity to establish itself as a global leader in space finance, working with our fellow Commonwealth members to ensure space regains its potential to transform all our lives for the better.
Michael Mainelli is Lord Mayor if the City of London
Asda entices new boss with £10m pay package
Mohsin Issa could reportedly reward the new boss of Asda with a total pay package of up to £10m, as the billionaire businessman rushes to find someone to take charge of the supermarket.
Sources told The Telegraph, a hefty sum of between £8m and £10m has been floated in a bid to end the supermarket’s hunt for a new chief.
A senior industry source said: “There’s always been a very attractive offer for [the Asda] job in terms of financials and they interview lots of people the first time around.
“The issue has quite simply been working with Mohsin Issa and that hasn’t been overcome to date.”
Moshin has been overseeing the business since 2021 after the departure of Roger Burnley. Previous attempts to find a new chief failed in 2022.
Asda said on Friday it was “undertaking an extensive international executive search to find a permanent CEO”.
It came after Zubar Issa, the other half of the billionaire Issa brothers revealed he had sold his stake in Asda to TDR Capital, the private equity giant the pair partnered with to secure its £6.5bn takeover in 2021.
Mohsin Issa will remain a co-owner of Asda alongside TDR Capital. The move means that the private equity giant now has a stake of 67.5 per cent in the supermarket while Mohsin Issa will hold 22.5 per cent.
A further 10 per cent is held by the former owner of Walmart. The deal is expected to complete in the third quarter of 2024.
Zuber Issa, who is the co-CEO of EG Group, said at the time: “Since Mohsin and I, alongside TDR, took ownership of Asda, we have driven a period of significant investment and entrepreneurial growth activity.
“Notably, Asda acquired a market-leading UK convenience retail and foodservice store business from EG Group.”
He added: “With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.
“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”
City A.M. has contacted Asda for a comment.
Shein set to miss out on FTSE 100 spot as industry body flags concerns
Fast-fashion giant Shein is set to miss out on a place in the FTSE 100, according to reports, as the incoming mega listing continues to spark debate in the City.
The Sunday Times reported that the number of shares set to be sold by the Singapore-headquartered fast-fashion giant “will fall short of the minimum required to qualify for inclusion in FTSE indices”.
London Stock Exchange rules state that companies from outside the UK must have a minimum free float of 25 per cent.
Shein is said to be valued at $66m (£52m), and surpassed $2bn (£1.6bn) profit on sales of $45bn (£35bn) last year.
Shein is expected to raise more than £1bn (£79m) from the sale of new shares, according to the report.
The prospect of Shein listing on the London Stock Exchange has divided the City, however, due to claims around how it treats its workers and its general fast-fashion business model.
The British Fashion Council, whose members include Mulberry and Burberry, flagged its listing as a “significant concern” to the City.
“At a time when global fashion leaders are rightly focused on making our sector more socially, environmentally, and economically sustainable, the Government’s courting of Shein to list on the London Stock Exchange, and Shein’s decision to do so, is of significant concern to UK fashion designers and retailers,” Caroline Rush, chief executive of the trade body, told the Mail on Sunday.
“Whilst we appreciate that Shein has committed to meeting acceptable industry standards, questions remain about the ethicality and sustainability of a business model and supply chain that consistently undercuts British designers and retailers, and these still need to be answered.”
Shein has been contacted for comment, but it told City A.M. previously “made significant progress” on improving working conditions for its factory staff.
Tesco predicted to reveal ‘another strong quarter’
Tesco is predicted to reveal “another strong quarter” next week as the supermarket giant seeks to maintain sales growth despite pressure from discounter rivals.
The UK’s largest grocery firm will update investors with a first quarter trading statement on Friday June 14.
Industry experts have predicted it will reveal another increase in sales for the period, with improving volumes of products bought by shoppers helping to offset the impact of easing inflation.
Analysts at Jefferies predicted it will report 4.3 per cent growth across its UK and Ireland retail business for the three months to May.
It would reflect a slight slowdown in growth, but this is largely expected because of the continued fall in the rate of inflation.
UK food and drink inflation peaked at 19 per cent in March 2023, according to the Office for National Statistics, but dropped to 2.9 per cent in April this year as pressures from high energy prices and supply disruptions eased.
James Grzinic of Jefferies said the retailer is on track for “another strong quarter” after Kantar “pre-emptively published impressive relative sales performance by Tesco in the UK, despite UK food CPI (consumer price inflation) slowing”.
Kantar’s latest sector data indicated that Tesco has increased its share of the UK grocery market to 27.6 per cent in May from 27.1 per cent a year earlier.
The UK’s two largest grocers – Tesco and Sainsbury’s – have solidified their position in the market by investing in pricing in order to ensure customers do not switch to discounter rivals.
As a result, they have seen growth beyond that of Asda and Aldi over the past year.
Tesco revealed in April that its adjusted operating profit grew by almost 13 per cent to £2.93 billion for the year to February on the back of the continued growth.
Last month, it said it would hand chief executive Ken Murphy a £9.93 million pay package for the past year, more than double what he received a year ago, after bonuses were boosted by the strong recent performance.
Analysts at Barclays added: “Recent market share data suggests that even if Tesco’s sales growth is slowing, its performance relative to the wider UK market continues to look very robust.
“If our forecasts are broadly correct then we would see this as a positive start to the year.”
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The group’s market-leading offering and market position means investors are cautiously optimistic.
“Clothing and home sales may prove trickier, despite Tesco’s efforts to streamline.
“The tougher environment is closely linked to the economic climate, and analysts would like some more details on demand expectations in the medium term.”
By Henry Saker-Clark, PA Deputy Business Editor