British department store chain House of Fraser half-year earnings fell to an 8.6 million pound loss for the 26 weeks to July 29, 2017, down significantly from its EBITDA profit of 900,000 pounds for H1 2016.

House of Fraser’s like-for-like sales and profits for the first half of the year dropped after being heavily disrupted by HoF’s new online platform launch and “significant discounting” of its in-house womenswear labels. Like-for-like sales fell 5.2 percent compared to 2016 and online sales dropped 9.8 percent during the 26 week period following the roll-out of House of Fraser’s 25 million pounds revamped online store in April. Gross profit slipped 5 percent from 207.2 million pounds in H1 2016 to 196.9 million pounds in H1 2017 as HoF cut prices to move old stock.

HoF sees 5 percent decline in profits for H1 2017

However, in spite of the sales and profits hit HoF remains upbeat about achieving growth in its final quarter, as the impacts caused by its new online platform and womenswear ranges were mainly over. House of Fraser’s new ecommerce system is said to be “working well” as “good progress” has been made to recover sale volumes. The department store group announced that it aims to be trading normally by the beginning of its final quarter in its trading update.

HoF also announced that it has completed the launch of its new womenswear in-house labels, which saw five existing womenswear brands dropped and the remaining four relaunched for AW17. The new collections have been “well received” so far, with “initial revenues” exceeding expectations” added the company. In addition, HoF also began its 18 million pound investment scheme in its distribution centre to increase capacity, drive operational efficiencies and improve profitability during the first half of the year.

The department store chain predicts this investment will deliver 5 million pounds of efficiency savings during the second half of the year, increasing to a run rate benefit of 15 million pounds of efficiency savings by the time the project is completed by mid-2018. House of Fraser also opened its first new store in the UK in nine years time during the first half go 2017. Located in Rushden Lakes, the store opened its doors on August 24. HoF also closed a loss-making store in Leicester and aims to shut an additional location in Aylesbury.

“My observations after a few weeks are that since Sanpower acquired the business in 2014 the primary focus has been on stabilising an enterprise that had been starved of investment for many years,” said Alex Williamson, CEO of House of Fraser. “Whether it be refinancing the business, the investment of over 100 million pounds in capital expenditure since the acquisition or a root-and-branch upgrade of the executive team, much has already been done to prepare us for significant transformation.”

“House of Fraser has much to be optimistic about. This is just the start of our journey with several other projects designed to provide additional sales and costs savings as part of the overall Transformation Programme due to commence shortly. I am excited about what lies ahead for the business and I am optimistic for the future. With the support of Sanpower, we are building the right foundations that position us well to deliver on our ambitions for sustainable profit growth.”

Fat Face has promoted four of its senior staff to director level as part of an ongoing investment drive to improve its products and ecommerce divisions.

Emma Shaw has been promoted from head of design to design director, while Kate Brown was promoted from head of buying and quality to buying and quality director.

Shaw and Brown have been with the lifestyle and fashion retailer since 2011 and 2014 respectively.

Meanwhile, Nick Stevenson has been promoted from head of merchandising and sourcing to director of the same area, and Paul Wright has been promoted from head of ecommerce to ecommerce director.

Both Stevenson and Wright have been with Fat Face since 2011.

Fat Face chief executive Anthony Thompson: “I always think that internal promotions are a reflection of the talent in any organisation, and I am delighted for Emma, Kate, Nick and Paul.

“This announcement also reflects our determination to continue to invest in product and develop a truly multichannel business.”

1

half-year earnings sunk to an £8.6m loss

Profits at House of Fraser have come under strain after the launch of a new web platform and “significant discounting” took its toll on the retailer.

The department store chain said half-year earnings sunk to an £8.6m (€9.7m) loss, down from a £900,000 profit in 2016, as website sales suffered from the roll-out of a £25m online sales platform.

Gross profits also slipped 5pc to £196.9m over the period, as the group slashed prices on old stock to pave the way for a new womenswear brand.

Gross transaction value hit £545.8m, with like-for-like sales dropping 5.2pc compared to last year.

However, the retailer said it was optimistic about delivering growth in the final quarter, as the impacts of launching the new online platform and womenswear range were largely behind it.

Chief executive Alex Williamson, who joined the firm earlier this year, said: “My observations after a few weeks are that since Sanpower acquired the business in 2014 the primary focus has been on stabilising an enterprise that had been starved of investment for many years.

“Whether it be refinancing the business, the investment of over £100m in capital expenditure since the acquisition or a root and branch upgrade of the executive team, much has already been done to prepare us for significant transformation.

“And House of Fraser has much to be optimistic about.

“Our new House Brand Womenswear collections for autumn/winter have been launched and our customers’ response to date has been very encouraging.

“Our new web platform greatly improves our customers’ experience and online margins whilst our investment in the distribution centre will deliver cost savings through improved operational efficiencies.”

House of Fraser, which employs 5,000 people and has 59 department stores in the UK and Ireland, opened its first store for nine years in August at Rushden Lakes in Northamptonshire.

Online sales at BHS grow 35% thanks to new start-up mentality.

The MD of BHS.com has revealed sales at the online retailer have increased by over a third in Q2.

Speaking to the Press Association, BHS.com MD Kevan Mallinder said sales grew 35%, bolstered by its womenswear clothing range which increased 350% over the period.

Mallinder said the business was treating the brand like a “disruptive start-up” after it was bought by the Middle-Eastern Al Mana Group in June 2016.

He told the Press Association: “Because we are privately owned by the Al Mana Group, they want to see the business succeed over the long term, which brings a different aspect to the decisions.”

Mallinder was bought in to direct the e-tailer six months ago, coming from food delivery firm Abel & Cole.

The much-loved British brand, BHS, entered administration in April 2016 leading to the loss of 11,000 jobs. An ongoing enquiry is investigating the controversy surrounding the retailer’s pension deficit.

McDonald’s workers are staging their first UK strike since the US burger chain opened in Britain over forty years ago, amid a heated row over zero-hours contracts and claims of workplace bullying.

The 24 hour strike began at midnight at two outlets owned by the fast food giant which has been selling its burgers to Britons since 1974.

The Baker’s, Food and Allies Workers Union (BFAWU) said the staff had been left no alternative but to take “the historic step” after McDonald’s management failed to meet calls for better job security by ending controversial zero-hours contracts.

<img class=”responsive article-body-image-image” src=”/content/dam/business/2016/02/18/McDonalds_Burger_E_3299494b_trans_NvBQzQNjv4BqpJliwavx4coWFCaEkEsb3kvxIt-lGGWCWqwLa_RXJU8.jpg?imwidth=480″ alt=”Burger”>

Credit: Fir Mamat/Alamy

The fast food workers in Crayford, near Dartford, and Cambridge are not officially unionised but are being represented by the BFAWU on this matter. The union’s ballot found 95.7pc in favour of strike.

“Despite all the attempts to change McDonald’s approach and help them become a fairer employer, nothing has been done on their side. Nothing has changed. Empty promises have been made. Yet nothing has been delivered,” said Ian Hodson, national leader of the BFAWU.

The staff are calling for pay to be increased to £10 an hour, up from the minimum wage of £7.50 for staff aged 25 and above. BFAWU said the fight for higher wages follows a campaign in the US, where staff are fighting for $15 an hour.

McDonald’s, which employs about 85,000 people in the UK, said it gave its staff the choice of flexible or fixed contracts with minimum guaranteed hours, but 86pc chose to stay on flexible contracts.

A spokesman for the fast food giant said the grievance is related solely to internal procedures and would affect less than 0.01pc of its workforce across just two of its 1,270 UK restaurants.

“McDonald’s UK and its franchisees have delivered three pay rises since April 2016, this has increased the average hourly pay rate by 15pc,” the spokesman added.

Mr Hobson said the voice against low pay “will not go away”.

“There is growing global movement calling for the fair and decent treatment of workers. In the US for example, the Service Employees International Union have shown the importance of collective action – with their ‘Fight for $15’ campaign having seen more than 10 million workers move towards a $15 minimum wage, and with 20 million workers in total having won wage increases since 2012,” he said.

“Hopefully, senior figures at McDonald’s will be listening,” he added.

Poundland given one of the biggest ever retail food safety fines as mouse droppings found on baby clothes

The discount chain had to close one of its busiest stores when evidence of mouse droppings and urine were found on food shelves alongside gnawed and soiled packets of biscuits, nuts, sweets and popcorn

Poundland has been fined one of the biggest ever retail food safety fines (Image: PA)

A mouse infestation – with droppings found on baby clothes – has landed Poundland with one of the biggest ever retail food safety fines.

The discount chain had to close one of its busiest stores when evidence of mouse droppings and urine were found on food shelves alongside gnawed and soiled packets of biscuits, nuts, sweets and popcorn.

The problem, at the shop in Wandsworth, London, was deemed to be a widespread and uncontrolled rodent infestation by health inspectors.

Droppings were found throughout the store and the behind-the-scenes storage areas of the discount store, including on baby clothes.

The retail giant is now counting the cost of ignoring the major mouse infestation at its store in Wandsworth, London, after being hit by magistrates with what is believed to be one of the country’s heaviest ever retail food safety fines.

The problem was found to be widespread (Image: EyeEm)

The company copped the whopping fine after a court heard the London shop had to be closed using emergency powers in January last year after food safety inspectors uncovered the infestation.

Cllr Jonathan Cook, community safety spokesman, said: “This was a very serious rodent infestation in a busy and popular retailer so there was a very real and significant risk to public health.

“When our inspectors uncovered the scale of the problem they had absolutely no option other than use their emergency powers to order the entire store’s immediate closure.

“It was not permitted to reopen until the company was able to prove it had dealt with the problems and taken adequate steps to prevent it happening again.

“This episode showed a complete lack of regard for customer’s health and welfare and is reflected in the very substantial fine imposed on the company by the court .

“Food retail businesses must ensure that they do not jeopardise public health in any way if they don’t want to suffer a similar fate.”

Wimbledon magistrates court heard that Poundland Limited had been previously prosecuted on three occasions for similar outbreaks at other stories, including a £73,000 fine at Birmingham crown court, a £12,000 fine at Highbury Corner magistrates’ court and a £33,000 fine at Luton magistrates’ court.

In this case Poundland Limited pleaded guilty to four offences and in addition to the £100,000 fine the company was also ordered to pay £12,368 towards Wandsworth Council’s costs in bringing the case to court, reports the Daily Record .

Arcadia, which owned BHS until it was sold to Dominic Chappell-led consortium, reaches deal with store’s liquidators

Sir Philip Green’s Arcadia retail empire has agreed to pay £30m to unsecured creditors of BHS following the collapse of the department store chain with the loss of 11,000 jobs.

Arcadia, which owned BHS until it was sold to a consortium led by Dominic Chappell for £1 in 2015, on Friday agreed the deal with BHS’s liquidators, FRP Advisory, which will drop legal action filed against Green’s company.

A spokesman for FRP said: “The liquidators of SHB Realisations, formerly BHS, reached an agreement with Arcadia Group in relation to a number of matters, including Arcadia’s floating charge dated 14 April 2015.

“We can confirm that as part of the agreement, over £30m was released from reserves held in relation to Arcadia’s secured claim into the monies available for BHS unsecured creditors and the floating charge is to be released.”

The settlement avoids the prospect of the retail billionaire fighting a lengthy legal battle over the demise of BHS.

Green avoided another legal battle with the pension regulator by agreeing to pay £363m to rescue the BHS pension scheme.

Chappell is to be prosecuted by the pensions watchdog for failing to provide information for an investigation into its sale.

Chappell headed Retail Acquisitions, the company that acquired BHS. A year later, it collapsed with the loss of 11,000 jobs and a pension deficit of £571m.

The Pensions Regulator is prosecuting Chappell for failing to comply with three notices for information issued under section 72 of the Pensions Act 2004. Failure to provide such information without a reasonable excuse is a criminal offence that can result in a fine.

Green, who was pictured on Instagram spraying bottles of champagne among women in bikinis, also on Friday announced a deal to buy four franchise-run Topshop stores in Australia which collapsed into administration in May.

Tiffany reported its financial results for the three months (“second quarter”) and six months (“first half”) ended July 31, 2017. In both periods, modest net sales increases and improved operating margins contributed to growth in diluted earnings per share.

In the second quarter: Worldwide net sales increased 3% to $960 million, while comparable store sales declined 2%. Management noted an increase in wholesale sales of diamonds, increased wholesale sales in the AsiaPacific region and strong e-commerce sales growth. Overall, growth in fashion and designer jewelry sales contrasted with softness in other jewelry categories. Net earnings rose 9% to $115 million, or $0.92 per diluted share, from $106 million, or $0.84 per diluted share in the prior year.

In the first half: Worldwide net sales of $1.9 billion were 2% higher than the prior year, while comparable store sales were 2% below the prior year, due to similar trends as noted above. Net earnings rose 8% to $208 million, or $1.66 per diluted share, from $193 million, or $1.53 per diluted share, a year ago.

The head of retail for Gant’s UK and Irish arm has resigned after almost five years in the position.

Darren Whelpton-Smith has moved on to rugby leisurewear brand Raging Bull as its head of retail, wholesale and ecommerce.

Whelpton-Smith is a former area manager for fashion chains Levi’s and Republic, and his last role before Gant was working as Fat Face’s area manager for nothern England for four years.

He joined Gant in 2012, and under his leadership he oversaw the opening of the brand’s new global flagship on Regent Street in London less than 12 months ago.

Meanwhile, Raging Bull was founded by former England rugby union player Phil Vickery and its collections are primarily sold through department stores and via its own website.

Dominic Chappell

Dominic Chappell, the former BHS owner, is to be prosecuted by The Pensions Regulator for failing to provide information to an investigation into the sale of the collapsed retailer.

Mr Chappell headed up Retail Acquisitions, the company that acquired BHS for £1 from billionaire Sir Philip Green in 2015.

The TPR said it is prosecuting Mr Chappell for failing to comply with three notices issued under Section 72 of the Pensions Act 2004.

Sir Philip Green sold BHS to Chappell in 2015 for just £1 (PA)

The notices were issued to Mr Chappell on April 26 2016, May 13 2016 and February 20 2017, it added.

Mr Chappell has been summonsed to appear at Brighton Magistrates’ Court on September 20 2017 to face three charges of neglecting or refusing to provide information and documents without a reasonable excuse.

BHS plunged into administration last year, impacting 11,000 jobs and around 19,000 pension holders, leaving a £571 million pension deficit.

BHS went into administration last year (Lauren Hurley/PA)

The Pensions Regulator has pledged to flex its muscles recently, saying in July that it “will not hesitate” to prosecute companies or individuals if they refuse to hand over information.

After a drawn-out saga that included a parliamentary inquiry and public outcry over both Mr Chappell’s and Sir Philip’s conduct, the Topshop tycoon agreed to pay £363 million to settle the BHS pension scheme in February.

Under Mr Chappell’s tenure as owner of BHS, £8.4 million was taken out of the chain by Retail Acquisitions, with £6 million still owed when it collapsed last year.

Retail Acquisitions was put into liquidation in May although Mr Chappell, a former bankrupt, said at the time he would challenge the court ruling.

Our most recent UK Customer Satisfaction Index (UKCSI) reveals striking evidence that customers hold the power when it comes to business performance.

The index reveals Aldi as the highest performing supermarket for customer satisfaction, overtaking heritage brands M&S and Waitrose, while also making the largest gains in sales and market share.

The three supermarkets with the lowest customer service levels – Tesco, Asda and Co-Op Food – all saw small drops in market share. Our analysis finds food retailers with satisfied customers saw a sales growth of 10.7 per cent, compared to only 1.8 per cent for those with satisfaction falling below average. Indeed, in each of the last 11 UKCSI reports, we have consistently seen that, on average, supermarkets with the highest customer satisfaction outperform the sector for sales and market share. Customer service is a clear driving force behind those who reaped the benefits of this sector growth – and a clear issue for those who were left behind.

Retailers would do well to take note. Indeed, wider analysis from the Institute of Customer Service presents a clear correlation between customer satisfaction and business performance. It shows, for example, that in 60 per cent of cases, when customer satisfaction increases or decreases, share price follows suit. Ignoring this places organisations at risk of huge potential loss.

The UKCSI suggests that not only is Aldi satisfying its current customers and securing the repeat custom which comes with this success, but the retailer is also increasing market share through customer recommendation. In addition, the effort customers are having to make to get what they want is lower for customers of Aldi than both heritage brands – meaning that their customers are experiencing a more seamless customer experience.

The prospect of inflation rising faster than incomes may well lead to more exacting demands over both price and service, so it is also interesting to note that Aldi significantly outperforms the sector as a whole in two key areas: satisfaction with price and complaint handling. It does seem that if food prices continue to rise, Aldi appears well placed to satisfy the needs of price-conscious customers whilst widening its appeal to broader segments for whom service and the overall experience is a key concern. I hope other retailers recognise this – customer satisfaction is a crucial differentiator and the realigned expectations of consumers must be met, particularly in an environment where competition is so fierce.

For those supermarkets who recognise that there needs to be a step change in their approach and a commitment to the customer service agenda, our recommendations are as follows:

• Get it “right first time”

Making the customer journey even easier, straightforward and intuitive and maintaining a high focus on getting it “right first time” is essential to convert customer satisfaction to stronger loyalty and recommendation.

• Prevent problems

Organisations must focus on preventing problems at their source in key areas such as the availability, quality and reliability of goods and services, which account for the largest proportion of problems.

• Maintain relentless focus on complaint handling

Dealing with complaints quickly and effectively is crucial. Key expectations of staff include listening carefully, showing understanding of the problem, taking responsibility and following up complaints.

• Develop engaged, competent people

Employees’ attitudes and competence are amongst the most important attributes of the retail customer experience. Investing in employees’ knowledge, emotional intelligence and problem-solving skills is therefore central to improving customer service. Organisations should commit to employee engagement, training and development as proactive, ongoing business strategies.

It may seem obvious that customers are key to business performance, but service too often falls by the wayside in boardroom conversations. Our research offers a clear imperative: retailers should place the customer at the centre of their business strategy, or risk losing out to those who do.

The athleisure trend sweeping the UK is predicted to drive the sportswear market’s value to £2.5 billion in 2017.

According to a new report from GlobalData, sports clothing has jumped eight per cent year-on-year as retailers rush to cash in on the trend and release their own athleisure ranges.

This is nearly four times the growth of the total UK clothing market, which rose 2.1 per cent.

The trend has seen a resurgence in brands like Kappa and Ellesse, while more contemporary retail giants like Boohoo, Topshop, New Look and H&M have released their own ranges in an effort to establish a foothold against sportswear specialists.

The popularity of athleisure fashion has been largely driven by the wellness trend, according to GlobalData’s retail analysts Fiona Paton.

“The health & wellbeing trend, influence of high profile fitness bloggers and continued investment from the government in initiatives such as improving cycle routes will increase consumer participation in sport and exercise – providing retailers with a larger, more varied activewear customer base,” she said.

“Sales growth in athleisure is set to peak in 2017 but it will remain a very popular category over the next five years, outperforming total clothing.

“As fashion retailers such as New Look, Primark and ASOS invest in affordable, trend-led own brand sportswear ranges, female shoppers have access to more choice, will spend more on impulse and will purchase athleisure pieces in replacement of core casualwear items.

“GlobalData believes non-sports specialists can lean on their fashion credentials and skills in interpreting seasonal trends quickly to ensure regular newness and that collections remain relevant, thereby forcing sports players such as Sports Direct to up their fashion game.”

“Westfield Stratford City – John Lewis” by EG Focus is licensed under CC BY 2.0

Despite being a 150-year-old department store, the UK’s John Lewis brand has been quick to evolve with the times and set its own standards in retailing.

The retailer is famed for its ‘fair’ approach to business from its ‘partnership’ status to its ‘Never Knowingly Undersold’ promise to consumers.

Winning repeated accolades for its customer service, and consistent ‘quality’ product in the eyes of its consumers, John Lewis has openly adopted new technologies, new ranges, new services to its customers and new partnerships with industry-shapers to stay on top.

Find out more about its retail approach and tactics in our 30 facts below:

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Image credit: John Lewis

1. John Lewis is a British department store and heritage retailer that opened its first store on Oxford Street, London in 1864.

2. The original Oxford Street store remains the flagship branch, and was refurbished in late 2007 at a cost of £60 million.

3. The Oxford Street store has its own roof garden and pub which reportedly had 171,000 visitors last year (2016).

4. John Lewis is owned by its permanent staff who are called ‘partners’ and the profits are shared amongst them every year.

5. There are 86,700 partners who collectively own 48 John Lewis shops, 354 Waitrose supermarkets, an online business, a catalogue business, a production unit – and a farm!

6. The business has reported annual gross sales of over £11bn.

7. The retailer is known for its ‘Never Knowingly Undersold’ promise to customers which pledges to stock the ‘best quality products, responsibly sourced’. If a national high street competitor is offering a better price for the same product – John Lewis will lower the price on that product in all of their shops – even if it’s a ‘sale’ price.

8. John Lewis partners reportedly stay with the company twice as long as the industry average.

Image credit: John Lewis

9. John Lewis has acquired other stores throughout the years which continued to operate under their original names until 2002. The two exceptions are Peter Jones in Chelsea and Knight & Lee in Southsea.

10. The John Lewis Partnership was the first department store group in the UK to adopt central buying, launching the ‘Jonell(e)’ name for its own brand merchandise in 1937. Since 2001 own brand merchandise has been known as ‘John Lewis’ merchandise. Additional own brands include Collection by John Lewis, as well as John Lewis & Co. and Collection Weekend by John Lewis.

11. In March 2017, John Lewis announced the launch of its own denim brand AND/OR in 15 stores.

12. In 2009, John Lewis launched the first of 12 John Lewis at Home stores in pre-existing shopping regions focusing on Electrical, Home and Technology products.

13. John Lewis will hire its first ever manager of brand experience for its new Oxford store, which is due to open in October 2017.

14. The new Oxford store will dedicate 20% of retail space to services and will have a concierge to greet customers and help them book appointments.

15. John Lewis permanently added a visual search tool to its website after 90% of users reported it to be a helpful function, leading to higher sales. The retailer was trialling FindSimilar – an app which lets shoppers upload a picture to search products.

16. Online retail accounted for 36% of the business last year (2016) and is expected to rise to 50% by 2020.

17. Inspired by the success of a “click and collect” offering, John Lewis has announced an £8 million programme to equip staff with iPhones – boosting them with technology to better assist customers on the spot.

Image credit: John Lewis

18. For a competitive edge, John Lewis is aiming to boost its range of exclusive products from 30% to 50% (time frame undisclosed).

19. John Lewis’ Christmas TV advert has become ‘event TV’. Its 2016 Christmas advert was named the world’s biggest, attracting 21 million global views on YouTube. The campaign cost £7 million.

20. 40% of John Lewis’ profits are reportedly made during the five weeks before Christmas.

21. In December 2016, the retailer reported a 31% year-on-year sales increase in the run-up to Christmas compared to 2015. This is accredited to two extra days of trading afforded by the additional bank holiday and the fact the sales started at 5pm on Christmas Eve.

22. John Lewis has recently topped a UK ranking of consumer perceptions of quality and reputation, conducted by YouGov.

23. John Lewis was amongst the top 5 brands named as offering the best customer service in the UK alongside Amazon, ASOS, M&S Food and Waitrose. The survey was conducted by the UK Customer Satisfaction Index (UKCSI) from The Institute of Customer Service.

24. In May 2017, John Lewis joined the Timewise Scheme, designed to help part-time employees, particularly in senior roles, progress their career and combat the challenges of flexible working.

25. In 2014, John Lewis set up JLAB, a global start-up accelerator programme run in association with innovation specialists L Marks. Waitrose joined the programme in 2017 creating the UK’s largest retail technology accelerator.

26. The 12 week programme offers 5-10 successful recipients access to John Lewis’s resources, industry-leading insight, free workspace, senior mentors and the opportunity to apply for funding in exchange for equity.

“Bristol – Cribbs Causeway … retail outlet” by bazzadarambler is licensed under CC BY 2.0

27. The themes for this year’s JLAB applicants included: Amazing Food Experiences, Amazing Store Experiences, Effortless Shopping; Help Me Live a Healthier Life; Smarter Supply Chain and Surprise Us – for miscellaneous innovations.

28. The retailer is currently exploring the possibility of renting out empty floor space as co-working offices for freelancers. A decision will be made in early 2018.

29. John Lewis was recently awarded ‘Best In Store Experience’, ‘Best Furniture Retailer’ and ‘Best Homewares Retailer’ at the 2017 Verdict Customer Satisfaction Awards and ‘Retailer of the Year’ at the 2017 Sunday Times Style Beauty Awards.

30. John Lewis has a written constitution that sets out its principles, governance system and rules. The ‘happiness of its members’ is cited as the partnership’s ultimate purpose.

As you can see with John Lewis it always comes back to the customer. But in order to offer such dedicated service the company also focuses on empowering and rewarding its staff. If retailers are going to remain competitive in the future both of these things will be vitally important.  

Argos has been named and shamed by the government as one of more than 200 employers to underpay their workers.

The Department for Business, Energy and Industrial Strategy (BEIS) has highlighted 233 firms which failed to pay their employees the minimum wage and national living wage.

More than 13,000 members of staff were underpaid by these firms and each will receive back pay from their employer.

A total of £2 million is due to be paid to workers and the government has also issued additional fines totalling £1.9 million to these businesses. Employees will be contacted by their employer regarding the underpayment.

The government says retail, hairdressing, and hospitality businesses were some of the most prolific offenders. A list of all 233 employers is available to {view online}.

Argos was by far the biggest firm named on the list of 233 companies. The retailer failed to pay £1,461,881.78 to 12,176 of its workers, according to the government.

Moneywise reported in February that 37,000 current and former Argos staff had been underpaid by their employer. That 37,000 figure includes the 12,176 workers announced today, as the government has only counted current employees of

‘The government will come down hard on those who break the law’

Business minister Margot James says: “It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers.

“Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.

“Common errors made by employers in this round included deducting money from pay packets to pay for uniforms, failure to account for overtime hours, and wrongly paying apprentice rates to workers.”

John Rogers, chief executive of Argos – which is now owned by Sainsbury’s, adds: “Shortly after we [Sainsbury’s] acquired the Argos business last year it was brought to my attention that, as part of a routine visit, HMRC had uncovered an issue with some Argos store systems and processes, which meant that some colleagues had been paid below the national living wage.

“Sainsbury’s prides itself on being a trusted brand where people love to work and I was, therefore, very disappointed to hear this and launched an immediate investigation. I am pleased to say the issue was resolved quickly and processes have been updated to ensure this cannot happen again.”

Following the global launch of the new format in Manchester in March, the store near Bristol is the second pilot featuring the design to open in the UK.
The shop will create seven full-time and two part-time local jobs. Earlier this year, the Subway brand announced plans to increase the number of stores in the UK and Ireland to 3,000 by 2020, creating around 5,000 new jobs.

Owned by family franchisees Stephen and Sue Pasco, the Keynsham store is one of 16 Subway stores they operate. The stores employ 145 people across Bristol, Gloucester, Somerset and Wiltshire.
Commenting on the new opening, Sue Pasco explained “We’re hugely proud to be able to open the brand’s 2,500th store and that it is one of the first UK stores featuring the new look design. The modern design will offer customers more of what they love about Subway stores – highlighting our bread baked in store daily, cookies and some of our veggies in modern displays – whilst offering great value and fresh, varied menu options.”
Brought to life with input from franchisees and customers from around the world, the Subway Fresh Forward design is expected to be seen in eight stores in the UK by Christmas, with all existing Subway stores to be refurbished in the new décor style over the next few years.

The town centre unit, previously occupied by Costa, covers a ground floor sales area of approximately 1,200 square feet and is the brand’s 14th shop.

In keeping with Weird Fish’s coastal-inspired roots, the design of the store features a fun nautical theme and tranquil colours.
John Stockton, managing director at Weird Fish, said: “We have worked hard to bring our new store vision to life, it is a real move on for us and we are delighted to have opened it in the fantastic seaside town of Scarborough.”
Many Weird Fish stores are situated in popular holiday destinations in counties such as Dorset, Devon, Cornwall and Yorkshire. Stockists include Debenhams, Cotswold Outdoor and Blacks. The opening of the Scarborough store coincides with the start of the brand’s busy holiday retail season.
Stockton added: “We are really excited about opening our second store in Yorkshire and feel that Scarborough is a great location for us. We can’t wait to show off our new store.”

Homeware retailer is third British high street chain after Sainsbury’s and Asda to announce redundancy plans

Wilko has reported an 80% drop in full-year profits. Photograph: Alamy
Wilko, the high street homewares and households goods chain, has warned almost 4,000 of its employees that they could lose their jobs in a shake-up that will strip out a layer of management.
The potential job losses cap a brutal week for British retail workers, with Asda placing 3,257 employees into consultation and Sainsbury’s announcing plans to axe more than 1,000 head office jobs.
Wilko, which recorded an 80% drop in full-year profits last month, said it had placed 3,900 staff working as stock supervisors, till supervisors and assistant managers, into consultation, which could lead to redundancy. However, the family-run business said the changes to its structure would also allow it to create about 1,000 new senior supervisor roles.
The company said its new “simplified retail team structure” would “ensure it is best placed to continue to thrive within an ever-changing retail landscape and to ensure it can operate successfully and competitively”.
The job cuts come soon after the company announced that the government’s “imposition” of a minimum living wage had hit profits. Despite the 80% decline in its pre-tax profits to £5.2m, Wilko’s board still paid the company’s multimillionaire family owners a £3m dividend.
Antony Houghton, the chain’s retail director, said that independent studies had found a “legacy of retail structures” that “created complexity to manage which aren’t simple, fair or transparent for our team members”.
He said the company was “committed to the future growth of the business and reviewing how we stay relevant to our customers. We do this by making sure all retail operations are fit for the future in order to provide customers with the best possible service.
“As a family-run business, we care greatly about team members and know that change is never easy. We are working with our recognised trade union the GMB, listening to team members and offering support at all levels. We are entering into a long period of consultation and wherever possible are aiming to redeploy team members into new roles and offering help and support to those seeking new opportunities.”
The company, founded by James Kemsey Wilkinson – known as JK – in Leicester in 1930 has grown to employ 20,000 people working in 406 stores across the country, but has struggled to compete with the rise of other discount chains such as B&M and Poundland.
Wilko, which recently shortened its name from Wilkinson, is 100% owned by the Wilkinson family and is one of the biggest privately-owned companies in Britain. It describes its mission as “Todobilation” – which it says describes the “jubilation in a to do. Either the excitement and anticipation of starting something or the sense of achievement when it’s done.”
In its annual accounts, the company hit out at George Osborne’s introduction of the national living wage, which starts at £7.50 an hour for over-25s. “Chancellor Osborne’s final austerity budget surprised the industry by its unilateral imposition of a statutory minimum living wage at well above expected levels,” the company said.
Lisa Wilkinson, a lawyer and grandchild of the founder, is chairwoman of the company and bought out the shares of her cousin Karin Swann, who was co-chair, for £63m in 2015.
This week Asda, Britain’s third-largest supermarket, singled out 3,257 employees in 18 underperforming and overstaffed stores, and is also understood to also be looking at staffing levels in a further 59 of its supermarkets.
The 18 stores facing staff cuts include branches in Halifax in West Yorkshire, Broadstairs in Kent and the Basildon Eastgate store in Essex. Staff will face a series of one-to-one meetings over the next three weeks. The eventual job-loss figure is expected to be in the hundreds.
Asda recently posted its worst annual figures since being taken over by Walmart in 1999, as fierce competition in the UK supermarket sector took its toll.
The supermarket industry is going through massive change as Tesco, Asda, Sainsbury’s and Morrisons cut costs to respond to the threat posed by the fast-growing discounters Aldi and Lidl, as well as grocery sales moving online.
Sainsbury’s is cutting more than 1,000 jobs at its head office as part of an efficiency drive designed to save £500m. The UK’s second-largest supermarket chain has drafted in McKinsey, the management consultancy, to draw up a headcount reduction plan. It comes on top of 400 job cuts in March.
Tesco, the country’s biggest supermarket, announced in June that it was cutting 1,200 jobs at its head office and 1,100 at a call centre.

Operating 183 stores nationwide, the retailer’s online operation also grew with sales rising by 34%.
Meanwhile, EBITDA rose by 7.6% to £15.1 million and net profit increased by 16.3% to £10.2 million year-on-year.

Sanjay Vadera, chief executive of The Fragrance Shop, said: “We have achieved outstanding like for like sales growth for another year as a result of listening to our customers and giving them what they are asking for; an expanding range of accessibly-priced luxury fragrances, being first to market with exclusives, the best possible retail experience and an expanding store portfolio."
The Fragrance Shop is on track to open its 200th store this year as well as a concession store format in partnership with House of Fraser across 28 sites. It also plans to unveil its new ‘Scentaddict’ subscription service, currently in BETA testing, which will allow customers to try luxury scents monthly with no commitment.

Tesco is to stop selling 5p single-use carrier bags and replace them with 'bags for life' costing 10p each.
Shoppers will now have to remember to bring their own carrier bags to avoid paying double the old price.
The move comes into effect in all UK stores on Monday 28 August and is part of an environmental drive to cut plastic consumption. It follows a trial at three stores in Aberdeen, Dundee and Norwich, which found shoppers bought 25% fewer bags when faced with a higher cost.
Tesco also says it'll be removing single-use wine-bottle carriers and lower the price of its 'carry me bottle bag' from £1 to 40p.
However, online delivery customers can still choose to receive deliveries in single-use carrier bags or opt for bagless delivery, something 57% of Tesco's online customers now do, the store says.
Tesco adds that 1.5 billion fewer single-use bags have been used since a charge for carrier bags was introduced in 2015, although it still sells over 700 million a year.

Wales was the first country in the UK to introduce a charge on carrier bags in 2011 and saw a 79% fall in plastic bags being handed out in the next three years.
Tesco's bags for life are made from 94% recycled plastic and can be replaced for free if damaged. Tesco says the money from selling bags will continue to be used to fund community projects.
Rival supermarket Sainsbury's stopped issuing single-use bags in 2015 and started to offer a 5p bag. It's 100% recycled and can be replaced for free.
We have contacted Asda and Morrisons to find out if they're making any changes to offering single-use bags and will update this story when we hear back.

Supermarket is worst performer of ‘big four’ grocers as fierce competition pulls underlying sales for the year down 5.7%

Asda has posted its worst annual figures since being taken over by the American grocer Walmart, as fierce competition in the UK supermarket sector took its toll.
Britain’s third biggest supermarket chain admitted performance was “behind expectations” after pre-tax profit for 2016 fell 19% to £791.7m.
Accounts filed at Companies House also showed sales fell to £21.6bn from £22.3bn as shoppers flocked to cheaper rivals.
Asda has trailed behind Tesco, Sainsbury’s and Morrisons, and is the worst performer of the UK’s “big four” grocers. The former chief executive Andy Clarke was replaced by the Walmart veteran Sean Clarke, who has attempted to breathe new life into the business. He took the helm last summer. He has focused on dropping prices, boosting the quality of food ranges and improving customer service.
While underlying sales for the year plunged 5.7%, Asda pointed to a recent improvement in trading. The latest industry figures showed Asda attracted an additional 398,000 shoppers in the 12 weeks to 16 July. The Kantar data showed Asda’s sales for the period grew by 1% compared with the same period last year.
In May, the grocer also reported sales in the first quarter had fallen 2.8% compared with the same period the previous year – an improvement on the 2.9% fall in the fourth quarter. Second-quarter figures are expected this month.
The accounts also showed Andy Clarke and the former chief customer officer Barry Williams, who has also left the business, received a combined £2.5m payoff. The firm did not break down the share of this sum.
Sean Clarke and the former Sainsbury’s executive Roger Burnley, who started as chief operations officer recently, have focused their turnaround efforts on the retail basics.
The finance director, Alex Russo, said: “Our sales performance, relative to the market, was behind our expectations. However, in the last quarter of 2016, we saw an improvement following the changes made to our ranges and investment in price and service.”
Asda also reported an operating cashflow of £1.41bn, an increase of 8%, and said a dividend of £450m was paid to Walmart.
All the “big four” grocers have suffered in recent years from seismic changes to the industry. Consumers have swapped their weekly shop for more frequent visits to smaller convenience stores as they seek to cut down on food waste at home. There has also been a shift away from bricks and mortar stores as some prefer buying online.
While shoppers can buy Asda food over the internet, the supermarket has been hit harder than most because it refuses to join rivals in opening smaller stores.
The “big four” have also come under attack from discounters Aldi and Lidl, which can undercut their bigger rivals by stocking fewer high-quality ranges. They are able to negotiate rock-bottom prices by buying entire crops from farmers while bigger supermarkets buy smaller quantities from a larger number of suppliers so they can offer more choice.
Asda again has been affected more than the others because its biggest point of difference was price, something that has been cannibalised in recent years with the low-cost operators. Asda has been too slow in responding to that competition, at a time when its arch rival Tesco has managed to turn its business around.
Tom Berry, retail analyst at GlobalData, said: “Asda has chosen to focus on price rather than range and in-store experience, which has clearly been the wrong strategy.”
Notes in Asda’s accounts showed it was focusing on cutting costs: “Our commitment to the ASDA ‘low cost operating model’ has resulted in improving operating efficiencies and delivering productivity savings across stores and distribution centres.”

Sales falls and lower profits at supermarket Asda in 2016 have been revealed in detail in newly-filed accounts.
The figures for the Walmart-owned supermarket, filed at Companies House, confirm a torrid spell for Asda as it faced stiff competition in the grocery sector.
Like-for-like sales were down 5.7% compared with the previous year.
Pre-tax profits dropped almost 19% to £791.7m at the Leeds-based company.
"The grocery market has continued to experience low growth throughout the year and competition in the sector has remained intense. Our sales performance, relative to the market, was behind our expectations," the company said.
Changes
Asda, Tesco, Sainsbury's and Morrisons – the so-called big four UK supermarkets – also face competition from German discounters Aldi and Lidl.
Asda suffered more than most and, unlike others, has struggled to fight back. In May, it reported decreasing sales in the first quarter of 2017 – the 11th consecutive quarter of falls – as it continued to lose ground to its rivals.
However, Asda added that despite the disappointing results, there had been an improvement following "strategic changes" under new boss Sean Clarke.
Mr Clarke, who replaced previous chief executive Andy Clarke a year ago, has slashed the prices of everyday items as he attempts to arrest falling sales.
The chain reported a 2.8% fall in like-for-like sales in its first quarter of this year, a moderate improvement on the previous period, which saw sales fall 2.9%.
'Focus on price'
Analysts have said that a major turnaround is required at Asda.
"Sainsbury's and Tesco have always had more opportunity for differentiation from the discounters, but Asda has chosen to focus on price rather than range and in-store experience, which has clearly been the wrong strategy," said Tom Berry, retail analyst at GlobalData.
"Asda has been flailing without direction for too long, and a comprehensive plan is needed if it is to survive in the highly competitive UK grocery market."
Phil Dorrell, of consultancy Retail Remedy, is a previous marketing chief at Asda. He said that it was a difficult market for Asda and it "had a lot of catching up to do".
"It is not changing significantly or fast enough to pull around the results. It did not get its proposition right," he said.

The retailer has taken an 888 square metre unit at the park.
Steve Barton, Dunelm’s director of property, said: “We’re delighted to be opening our first new Kiddicare store at Peterborough One Retail Park. The family-oriented tenant mix at the retail park is complimentary to a physical store presence for the brand in support of Kiddicare’s powerful on-line offering.”

Targetfollow acquired what was formerly known as Peterborough Garden Park in December 2016 and has now rebranded it as part of an expansion and modernisation programme.
George Craig, associate director at Targetfollow, said: “We’re very pleased that Dunelm has chosen Peterborough One Retail Park for its first new Kiddicare store in the UK. Securing Kiddicare immediately after rebranding the park is the beginning of a number of exciting new tenant initiatives.”
Peterborough One is anchored by a 4,645 square metre Van Hage garden centre and has 16 further retail units including Cotswold, Pavers, The Edinburgh Woollen Mill, Bonmarché, Pets Corner, Maidenhead Aquatics, Roman, The Works, Granite Transformations and Hammond Furniture.