Retail news round-up on February 4, 2015: food prices fall in January, Target poaches Tesco CIO, Sports Direct hit by bonus claim, Allan Leighton could donate Co-op pay and Ao boss on Black Friday

January food prices see biggest fall in over eight years

Food prices in supermarkets plunged 0.5% in January compared with a year ago, according to British Retail Consortium (BRC). It was the sharpest drop since its records began in December 2006. The slump was due to tough competition and falling prices of many raw materials. Prices for all goods fell 1.3% last month.

“Heavy discounting in early December resulted in some retailers pulling their new season stock forward, which meant a significant amount of goods were sold at full price in January,” BRC director-general Helen Dickinson said.

Tesco executive named Target chief information officer

US retailer Target has hired Tesco executive Mike McNamara as its new chief information officer, replacing retiring Bob DeRodes. McNamara will report directly to chief executive Brian Cornell.

The move comes as Target plans to increase its online sales and bolster data security in the wake of a massive hacking attack that hurt its sales during the 2013 holiday shopping season.

Sports Direct zero-hours contract staff launch bonus claim

Sports Direct has been hit by a million-pound claim from nearly 300 staff excluded from its bonus scheme because they were on zero-hours contracts, The Guardian reported. The employees were not included in the scheme that paid out about £160m worth of shares to 2,000 permanent staff in 2013.

Lawyers acting for the part-time staff sent letters to Sports Direct’s legal team claiming a total of just over £1m in compensation for missed bonuses for a first batch of 30 employees. The individual claims average about £36,000 each but the highest is worth more than £100,000.

Some of the workers making claims for the missed bonuses still work for Sports Direct, and law firm Leigh Day has called on the retailer to confirm they will not be penalised or dismissed for making the claims. The law firm says that to do so would be unlawful under regulations that protect part-time workers.

Allan Leighton could donate Co-op pay to charity

Former Asda and Royal Mail boss Allan Leighton, who is the frontrunner to become first independent chairman of the Co-operative Group, is expected to donate his six-figure pay package to charitable causes linked to the mutual if he joins it.

The businessman is likely to declare his intention to give away his salary if he is confirmed in the role as expected in the coming days, according to Sky News. The gesture, which has yet to be officially agreed, would reflect his commitment to the role, according to insiders.​

AO World boss says Black Friday like a ‘narcotic’ drug addiction

AO World boss John Roberts has warned that cut-price offers on Black Friday risk having a narcotic effect both on shoppers and retailers by luring them into an addiction for discounts, The Times reported. Roberts bemoaned the success of the November promotion frenzy, which generated an estimated £810m of spending in 24 hours last year.

“Everybody knows Black Friday is bad for retailers,” Roberts said. “It’s like a drug — the drug of low prices for the rest of the year is a difficult one for people to wean themselves off.”