Retail news round-up on June 18, 2014: EU expected to approve Dixons Carphone merger, Mothercare to cut up to 500 jobs, Alliance Boots tax complaints rejection, and more.
EU expected to approve Dixons Carphone merger
UK retailers Dixons and Carphone Warehouse will receive an unconditional approval from the European Union for their merger £3.8bn, Reuters reported. Europe’s leading mobile phone operator, Carphone and electrical retail giant Dixons expect to capitalize on the booming market for smartphones connected to consumer electronics.
The European Commission had earlier raised a concern with British retailers over an expected push in the prices of mobile phones and tablets followed by a bigger market share enjoyed by the duo. Although, it is believed that the EU competition watchdog will clear the deal without any concessions from the companies, the final decision on the issue will be made public by 25 June.
Mothercare to cut up to 500 jobs
Baby goods retailer Mothercare is expected to cut as many as 500 customer adviser jobs as part of its restructuring plans, the Times has said. The retailer also looks forward to reduce the hours of those working 24-hours or more per week. Employees not in acceptance of the reduced work hours might be facing the risk of a job loss, which means almost 500 jobs are at stake. Having beaten its full-year profit forecasts this May, Mothercare continues its turnaround drive to achieve a cost-effective and profitable restructuring plan to bring about higher profits.
Alliance Boots tax complaints rejection
Allegations over taxation and disclosure of transactions against pharmacy retailer Alliance Boots have been rejected by the British officials, reports the Financial Times. The complaints filed by the two campaign groups , War on Want and Change to Win, of which the latter is an US-based lobbying group for the rights of working and middle-class Americans, have last year complained that the retailer breached OECD guidelines for multinationals in certain deals it undertook after the financial crisis.
However, the UK’s business department officials did not find the issues ‘adequately material and substantiated for further examination.’ The UK government officials found no evidence that the taxation of the deals failed to adhere to their underlying economic substance or UK rules.
Morrisons asked not to play England World Cup songs
Morrisons has been forced to stop playing England World Cup songs in its Scottish stores following a number of customers complaining to the staff at the stores, The Scotsman reported. Shoppers in Morrisons stores north of the Border were shocked to hear English anthems blaring out from the sound system in the run-up to the tournament in Brazil.
Morrisons bosses said some of the tracks being used in English stores had accidentally been added to a playlist rolled out across the UK. The retailer insisted the tracks were only played in Scottish branches for one day before the songs were pulled.
Scottish retail yet to catch up with the UK trend
May 2014 saw a fall in the sales figures of the Scottish retail much like that in the same month of 2013, if compared to its UK counterpart’s corresponding year-on-year rise, the Herald Scotland stated. The Scottish Retail Consortium’s latest sales figures, published today, were described as “disappointingly weak” by sector expert David McCorquodale.
McCorquodale, head of accountancy firm and SRC survey sponsor KPMG’s UK retail sector practice, attributed the weakness of sales in Scotland to a competitive grocery market, mixed weather and “localised caution” among consumers.
Plastic bags tax makes ‘no sense’, say UK retailers
The UK retail industry representatives have warned that the Government’s decision to introduce a plastic bag tax fails to make any sense and will leave shoppers and retailers confused by the new complexity in laws, the London Evening Standard reported.
The British Retail Consortium says that the Government ignored advice from its members to make the charge apply to plastic and paper bags, rather than just single-use plastic bags. It has also pointed out that a recent report by the Environment Audit Committee found a paper bag would need to be reused three times to have less environmental impact than a plastic bag used once. However, small retailers are exempted from imposing the charge, which will be rolled out across England next year, but the BRC said hundreds of its SME members wish to be removed from the exemption in order to avoid.
Eason staff vote in favor of proposed pay cuts
As many as 800 Eason staff have backed a pay-cuts plan of between 4% and 10%, The Irish Times reported. In April, the staff at the book-to-stationary retailer had rejected the proposed pay cuts but they accepted them in a second ballot this week after the Labour Court recommended their acceptance.
“They will be implemented shortly”, an Eason spokesman said. The company’s management is hoping to trim its overall costs by €2.5m (£199,745) by various measures and paying reductions is an important part of this plan.