Retail round-up on June 27, 2016: Wesfarmers' UK plans, Debenhams Ireland to reject rental leases, Aldi and Lidl pledge to keep food prices low.
Wesfarmers' plans for the UK following Brexit vote
Wesfarmers will face fresh challenges in the UK following Britain’s decision to leave the EU, according to BAML. The Australian retail giant plans to invest as much as $1bn into transforming Homebase into Bunnings UK.
Industry analysts believe that if Wesfarmers continues with its transformation of Homebase stores operating losses will increase and the overall value erosion to shareholders will escalate to $4bn.
Debenhams Ireland to reject rental leases in planned survival scheme
Debenhams Retail Holdings Limited (DRHL), which is struggling to survive after placing its 11 stores into examinership, looks set to reject at least three of its rental leases, according to the Irish Independent.
DRHL applied for a court protection last month when its UK parent company Debenhams plc discontinued its financial support leading to 2,265 jobs, comprising 500 concession staff at risk.
The rents are a significant issue in the planned survival scheme, as Debenhams plc had assured them to pay the rents.
Aldi and Lidl pledge to keep food prices low despite Brexit
Discount supermarkets Aldi and Lidl have sworn to keep their prices low despite the increased tariffs imposed by the EU countries, according to Daily Star.
UK manufacturers and farmers are warning of an expected increase in fresh food prices following Brexit.
Minette Batters, president of the National Farmers’ Union, said: “Prices will have to go up to ensure farms stay in profit.”
Kantar Retail stated: “Both Aldi and Lidl have been the most proactive in driving provenance and localism, with Aldi implementing a 100% British fresh-meat policy."