Jason Tarry named as John Lewis’s new chair
Newsflash: The John Lewis Partnership has appointed the former chief executive of Tesco UK as its new chair.
Jason Tarry will succeed Sharon White in September – White having announced last October that she would leave once her five-year term ended.
JLP says Tarry’s experience spans grocery, general merchandise and fashion in senior commercial, operational and general management positions, having joined the Tesco graduate programme in 1990.
He left his role at Tesco last month.
Sharon White says:
“I’m delighted to be handing over to Jason, who has a combination of fantastic retail experience with leadership through transformation. From my many conversations with Jason, he has demonstrated a clear appreciation for the Partnership model and champions it. I look forward to welcoming him to the Partnership in September and carrying out a smooth handover.”
White’s decision to step down comes after she announced last year that the group’s turnaround would take two years longer than planned and cost more money after reporting a loss for the most recent six months.
Last month, JLP – which owns both John Lewis and Waitrose – returned to annual profit, but decided not to pay its workers a bonus for the second year in a row.
Key events
Jason Tarry says:
“The Partnership and its brands stand for trust, value, quality and service and it’s a great privilege to be succeeding Sharon as the seventh Chairman.
The Partnership is unique and I’ve long been an admirer of the employee-ownership model, its values and Partner-led customer service. This starts with a sharp focus on being brilliant retailers for customers and investing in growth.
Before Sharon White took the role of JLP chair in February 2020, only four people had done the job since 1955, so her decision last autumn to leave after just one five-year term was a surprise.
White will leave after one of the most difficult periods in its history (which dates back to 1864), with the Covid-19 pandemic having hit John Lewis and Waitrose hard.
The group had expanded dramatically over the previous two decades, at a time when online shopping was rattling the sector, and had not upgraded its IT systems well enough to cope.
Rita Clifton, deputy Chairman of John Lewis Partnership, says:
“The Board extends its huge thanks to Sharon for successfully leading the Partnership through one of the most testing periods in its history – first Covid and then the cost of living crisis.
She has faced into the toughest decisions and overseen the Partnership’s financial recovery; we are in good financial health with a return to profit, and have a strong balance sheet with record investment planned this year. Sharon has also helped ensure that employee ownership of the Partnership is secure, is demonstrably focused on its purpose as a force for good and with an open and inclusive culture.
Jason Tarry named as John Lewis’s new chair
Newsflash: The John Lewis Partnership has appointed the former chief executive of Tesco UK as its new chair.
Jason Tarry will succeed Sharon White in September – White having announced last October that she would leave once her five-year term ended.
JLP says Tarry’s experience spans grocery, general merchandise and fashion in senior commercial, operational and general management positions, having joined the Tesco graduate programme in 1990.
He left his role at Tesco last month.
Sharon White says:
“I’m delighted to be handing over to Jason, who has a combination of fantastic retail experience with leadership through transformation. From my many conversations with Jason, he has demonstrated a clear appreciation for the Partnership model and champions it. I look forward to welcoming him to the Partnership in September and carrying out a smooth handover.”
White’s decision to step down comes after she announced last year that the group’s turnaround would take two years longer than planned and cost more money after reporting a loss for the most recent six months.
Last month, JLP – which owns both John Lewis and Waitrose – returned to annual profit, but decided not to pay its workers a bonus for the second year in a row.
Another strike by UK train drivers in their long-running pay dispute has disrupted journeys for commuters this morning.
Members of the Aslef union walked out for the third strike in the past four days, affecting c2c, Gatwick Express, Greater Anglia, Southeastern, Southern, South Western Railway, Great Northern and Thameslink services.
The strike will hit some train into London, while services in East Anglia and the South East England are particularly disrupted.
PA Media has more details:
South Western Railway said a significantly reduced service will operate on a small number of lines, while the rest of its network will be closed. Trains will only run between 7am and 7pm.
Southern said there will be no trains running across the vast majority of its network, with a limited shuttle service running non-stop between London Victoria and Gatwick Airport.
There will be no Thameslink services running, except for a limited shuttle service calling at Luton, Luton Airport Parkway and London St Pancras and another limited non-stop shuttle service between London Kings Cross and Cambridge.
There will be no Great Northern or Gatwick Express services. However, Gatwick Airport will continue to be served by the limited non-stop Southern shuttle.
Southeastern said most of its routes and stations will be closed. There will be an extremely limited service where trains are running and the operator advised customers not to travel.
Yellen says US won’t allow China to decimate new industries
US treasury secretary Janet Yellen is wrapping up a visit to China by warning that Washington will not allow Beijing to decimate new US industries.
Yellen has just held a news conference after four days of talks with Chinese officials.
She said the talks had advanced American interests, and that she had raised concerns about China’s overinvestment in industries such as electric vehicles, batteries and solar products, fueled by “large-scale government support.”
Yellen says:
“We’ve seen this story before. Over a decade ago, massive PRC [People’s Republic of China] government support led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States.
“I’ve made it clear that President Biden and I will not accept that reality again.”
🚨🇺🇸🇨🇳BREAKING: YELLEN – CHEAP CHINESE GOODS THREATEN WORLD ECONOMY
“Now, we’re seeing an increase in business investment in a number of new industries targeted by the PRC’s industrial policy, and that includes electric vehicles, lithium-ion batteries, and solar. China is now… pic.twitter.com/A32Z2D8x9N
— Mario Nawfal (@MarioNawfal) April 8, 2024
During her trip, Yellen also warned there will be “significant consequences” if Chinese companies provide support for Russia’s war against Ukraine.
UK retailer insolvencies hit five-year high
The last year has been very tough for the UK retail sector, with weak consumer spending, rising costs and high interest rates pushing many retailers to the wall.
The number of retailers falling into insolvency jumped by 19% in the last year, new data from audit, tax and advisory firm Mazars shows, to 2,195.
High profile failures in the last 12 months include Body Shop, Ted Baker and Wilko, who all filed for administration.
Mazars says that many retailers have been hit by a combination of increased costs and cautious household spending among consumers, while higher interest rates are causing significant problems for any retailer that has a significant level of debt that is either “floating rate” or that is coming for refinancing.
Rebecca Dacre, partner at Mazars, says:
“We are unlikely to see the retail sector trading comfortably until interest rates start to fall.
Despite inflationary pressures easing, high interest rates and low consumer spending continue to persist.”
“The rise in the National Living Wage is the largest on record and some face a sharp rise in business rates from April.”
Pension and benefits rise today
The UK state pension has risen today, as have a swathe of benefits.
People receiving the state pension will get a 8.5% increase, after the government stuck with its ‘triple lock’ policy of increasing pensions by the highest of inflation, wages, or 2.5%.
Today’s increase, based on last summer’s wage inflation, will be worth an extra £900 a year to full rate claimants.
Universal credit claimants will receive a 6.7% increase, based on last September’s inflation rate. Other benefits including the personal independence payment, disability living allowance and employment and support allowance are also rising by 6.7%.
Mel Stride, the Work and Pensions Secretary, said:
“Thanks to the triple lock and our efforts to drive down inflation, we are putting money back in the pockets of pensioners. This is only possible because we have stuck to our plan and our economy has turned a corner.
“This will make a meaningful difference to all those who rely on the state pension and ensure we continue to provide a safety net for those who need it most while making work pay wherever possible.”
German exports fall 2%
Germany’s economy has suffered another drop in overseas sales.
German exports dropped by 2% during February, statistics body Destatis reports, worse than the 0.5% fall expected by economists. On an annual basis, exports were down 4.4%.
Demand from other European countries softened, with exports to EU countries down by 3.9% month-on-month.
Exports to the People’s Republic of China fell by 0.6% to 8.0 billion euros, while exports to the UK fell 2%, but there was a 10.2% jump in exports to the US.
Imports swelled by 3.2% month-on-month, but were 8.7% lower than a year ago.
UK growth at ‘turning point’ as economy gains momentum
Hopes are building this morning that the UK economy is pulling out of recession.
Two industry surveys suggest that UK growth has reached a “turning point”,
Accounting and business advisory firm BDO reports that output from UK businesses has risen for the second consecutive month to its highest level in nearly two years.
BDO’s Output Index, which tracks output across the services and manufacturing sectors – climbed to 102.39 in March, its highest reading since May 2022.
This, BDO says, shows a “robust recovery and a turning point for the UK economy”.
Kaley Crossthwaite, partner at BDO, says:
“Output reaching its highest point in nearly two years illustrates the UK’s robustness in the face of global economic adversities and is a big step towards economic stability and growth.
“For businesses, the main mood right now is cautious optimism – with drops in the Employment and Optimism Index showing that we’re not out of the woods just yet. All eyes are on the Bank of England, with an interest rate cut looking possible for June, as businesses hold out hope for a further recovery this year.”
Deloitte reports that sentiment among UK chief financial officers has risen for the third consecutive quarter, as bosses grow more optimistic about the prospects for their own businesses.
The proportion of CFOs reporting high or very high levels of uncertainty facing their businesses fell to 36% this quarter, Deloitte says, which is less than half the peak seen in mid-2022 (77%).
This takes uncertainty back to levels last seen in the summer of 2021 (35%), a time when national lockdown restrictions were ending.
Introduction: Food inflation across rich nations drops to pre-Ukraine war levels
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The global cost of living squeeze has eased, as food inflation across rich nations drops to its lowest level since before Russia’s full-scale invasion of Ukraine.
After two years of surging prices, the annual rise in consumer food prices across 38 industrialised countries fell to 5.3% in February, the Financial Times reports, citing new OECD data expected today.
That’s down from 6.2% per cent in January, and well below a peak of 16.2% in November 2022, according to the latest OECD data.
Many global food commodities, such as cereals and dairy products, have been easing in recent months, after spiking in 2022, which is now feeding through to lower inflation in the shops. In the UK, food price inflation hit a two-year low last week.
The worst of high food inflation is now behind us, according to Carlos Mera, head of agricultural commodities at Rabobank, who told the FT:
“Agricultural commodity prices have dropped significantly in the last two years, since the peak in prices that followed the invasion of Ukraine, and this is acting as a disinflationary force even at [the] retail level.”
Falling inflation doesn’t mean prices are falling, though; they’re rising at a slower rate than before.
In many advanced economies, food inflation has dropped to around half its recent peak.
The OECD’s inflation gauge comes as financial markets reassess how quickly central banks will be able to cut interest rates this year.
In America, the economy is showing more vigour than expected, undermining expectations that the US Federal Reserve will cut borrowing costs three times this year.
Rising oil prices this year had also added to inflationary pressures. But this morning, Brent crude has dropped 1.7% to $89.60 per barrel, having hit a five-month high over $91 last week.
Kathleen Brooks, research director at XTB, says:
Headline inflation is now being impacted by the oil price. The WTI crude price is higher by 21% so far this year, and oil prices are now boosting US inflation after subtracting from it at the end of last year.
The International Monetary Fund is expected to release Chapter 2 of its World Economic Outlook (WEO) this morning, which will examine the impact of higher interest rates.
The agenda
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7am BST: German trade balance for February
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8am BST: Philippines interest rate decision
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9am BST: IMF to release Chapter Two of its World Economic Outlook
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3pm BST: Israel interest rate decision
