Sainsbury’s reports growth in sales and market share in 2011

UK retailer J Sainsbury plc (LSE:SBRY) reported today a 6.8% increase in total sales for 2011 to GBP24.5bn and said that it outperformed the market and increased its market share.

Profit before tax fell 3.4% to GBP799m, but the company said that its underlying profit before tax showed an increase of 7.1% to GBP712m.

Over the course of the year Sainsbury’s saw its market share rise to 16.6%, which it said was the highest for nearly a decade.

Chief executive Justin King claimed that the company’s price perception on branded groceries is improving, driven by the introduction of Brand Match which reassures customers that they are paying either the same or less at Sainsbury’s for branded goods.

In addition to this, Sainsbury’s Taste the Difference and Basics brands are both performing well and the company reported that these products appear side-by-side in many shopping baskets, showing that customers are saving on some items while treating themselves on others.

The other side of the supermarket business, general merchandise and clothing, is continuing to grow faster than the food business and is gaining market share. The retailer is developing its store estate, expanding its ability to offer non-food ranges, and now has 161 stores selling its larger non-food offering, 22 more than last year.

Sainsbury’s is also opening more smaller stores and during 2011 the company met its target of opening new convenience stores at a rate of one to two a week, with 73 to new stores taking the total to 440.

Many consumers are continuing to do more of their shopping from home and online grocery orders now exceed 165,000 a week, with an annual turnover of around GBP800m which places Sainsbury’s second in the market.

Beyond the company’s core operations, the pharmacy business is being expanded and Sainsbury’s Bank had a good year, recording a 40% increase in pre-tax operating profit.

The board of directors has proposed a final dividend of GBP0.116 to make a full-year dividend of GBP0.161, up 6.6% from last year’s dividend of GBP0.151.

Skilled workers needed in middle east banks could answer job cuts in UK

A demand for skilled banking staff is outstripping supply in banks within the Gulf Cooperation Council.

 

The Gulf Cooperation Council (the political and economic alliance between Saudi Arabia, Kuwait, the United Arab Emirates, Oman, Qatar and Bahrain) are struggling to gain and retain skilled bank workers.

 

The survey by Accucenture, has revealed that there was a skills shortage amongst 58% of executives surveyed leaving many consumers unsatisfied with bank services.

 

According to the survey retaining skilled workers is the biggest issue facing the banks within the Middle East.

 

An additional critical challenge facing banks in the GCC is retaining customers and improving customer service.

 

The survey, which was released on Tuesday, has found that customers of the Gulf banks are becoming more demanding with their expectations and less loyal, as regional competition rapidly increases.

 

This need for skilled banking staff in the Middle East comes at a time when banks are at rock bottom in the West and more and more cuts are being made within the banks in the UK and Europe.

 

Amr Elsaadani, managing director of Accenture’s banking practice in the Middle East, said that in order for banks to increase their shareholder value, attracting and retaining skilled and talented employees would prove central to their strategies.

 

In an attempt to rectify this disparity between staff and skills, Gulf banks are implementing a range of initiatives to address the issue. These include coaching and mentoring; revamping compensation through higher salaries and bonuses and increasing transparency in career paths.

 

Around 93 percent of executives who took part in the survey see “robust customer management” as the top driver of profits and growth through 2015.

 

“The increasing customer orientation of these banks reflects an expectation that the pool of customers in the GCC is getting wider and deeper — especially with regard to youth, women and small and medium enterprises (SMEs), which have traditionally received little attention,” added Elsaadani. “To capture these markets, banks will need to ramp up both their retail and commercial banking capabilities.”

 

The increased emphasis on customer service in the Gulf banks is something that has been invested in extensively in the U.K and Europe, where there are an abundance of skilled and talented workers who are facing job losses with the financial climate.

 

This demand for emphasis on customer service and talented employees in the Middle East demonstrates that the banks in the Gulf are aware of their financial advantage over the West, and are attempting to address the areas where the West excel, exactly at the time when the jobs of skilled workers in the West are diminishing with the financial state.

 

Article by Lauren Probert

 

WH Smith join forces with Kobo to provide ‘biggest eBook catalague in the UK’

High street giant WH Smiths revealed a strategic partnership with Canadian eBook supplier Kobo.

 

WH Smith have agreed a distribution deal that will see it become a seller of electronic readers for the first time – sold in store and online.

 

This will give UK customers access to the largest eBook catalogue through the deal which will supply 2.2million titles and one million free books.

 

WH Smiths will be selling two visions of Kobo’s electronic reader, the book seller has stated the move will compliment its traditional print book business.

 

 

The book giant has also reported an increase of 4 per cent in profits in the year to August 31. The company has also increased its annual dividend to 22.5p (16%).

 

 

Although book sales have fallen 4 per cent, the travel business has seen record profits from stores mostly situated in airports and railways.

 

The business has made £14 million savings from its high street stores, mainly from better energy use, new technology and increasing supply chain efficiently. More savings are planned for the next two years, a further £11 million.

 

Educating one million girls to tackle poverty

Britain will help up to a million of the poorest girls in the world go to school, the Deputy Prime Minister announced today.

The Girls Education Challenge is a new project that will call on NGOs, charities and the private sector to find better ways of getting girls into school in the poorest countries in Africa and Asia which the UK has identified as a priority, including Bangladesh, South Sudan and Nigeria.

The projects will help provide:

  • 650,000 girls with a full six years of primary education or
  • Up to a million girls with a junior secondary education for three years.

Deputy Prime Minister Nick Clegg said:

“Women and girls continue to bear the brunt of poverty. Investing in them early on and giving them an education not only radically alters their lives but has a massive knock on effect benefitting their families and communities. Girls who have been to school are likely to do significantly better financially, socially and be far healthier.

“The action we are taking is ambitious and something of which Britain should be enormously proud. It will help to lift hundreds of thousands of girls out of poverty so that they can fulfil their potential.”

International Development Secretary Andrew Mitchell said:

“Educating girls tackles the root causes of poverty. Research shows that providing girls with an extra year of schooling can increase their wages by up to 20 per cent, while also lowering birth rates, which can have a profound economic impact.

“These initiatives will also have positive impacts on future generations. They will mean girls are more likely to go on to help their sisters and younger girls in the community to follow their example – go to school and widen their choices,  to get married later, for example, and to earn their own income.”

The Girls Education Challenge will be a competitive process that encourages organisations to set up schemes targeting marginalised girls of primary and lower secondary age. Non-government organisations – including businesses and charities – are being asked to put forward ideas to get girls into good quality education and there will be a focus on working with new organisations and partners – to try new approaches where traditional approaches have not been successful.  The British Government will then back the best of these.

In order to receive continued funding, the organisations will have to demonstrate measurable improvements in the quality of education and increased numbers of girls going to school. Only programmes which can demonstrate the most cost-effective ways of working will receive backing.

The programmes will also have to show  that they will get more marginalised girls into school. It is likely that some of the activities which are supported will ensure that facilities at school – for example separate latrines and “safe spaces” for girls – are provided. The types of initiative are those that provide a combination of support to girls and young women: scholarships which not only pay for school fees but ensure girls are able to buy their own uniform, travel safely to school and support them to find work once they leave school.

Girls who are educated are more likely to:

  • marry later – a girl who has attended secondary school is less likely to marry during her adolescent years
  • have fewer children – on average a woman’s fertility rate drops by one birth for every four years of additional schooling
  • get immunisation and other health treatments for themselves and their babies
  • avoid HIV – a study shows girls with secondary education are three times less likely to be HIV positive
  • find employment and earn more – an extra year of schooling sees wages increase 10 to 20 percent

The International Development Secretary Andrew Mitchell will give more details at the UN General Assembly this week.

This new support is in addition to the Coalition Government’s commitment to support 9 million children from developing countries in primary and 2 million in secondary education by 2015.

Government to suspend general budget support to Malawi

Malawi will no longer receive general budget support from the UK Government, Andrew Mitchell announced today.

The International Development Secretary took the decision after the Government of Malawi repeatedly failed to address UK concerns over economic management and governance.

General budget support, which is used to allow governments to deliver their own national strategies for poverty reduction against an agreed set of targets, has been suspended indefinitely.

On governance, demonstrations have been suppressed, civil society organisations intimidated, and an Injunctions Bill passed that would make it easier for the Government to place restrictions on opponents without legal challenge.

On the economy, the UK is concerned that Malawi’s overvalued exchange rate has created chronic foreign exchange shortages which are having a serious impact on the Malawian private sector’s ability to drive future growth. There are now daily fuel queues, tobacco exports have deteriorated and Malawi is off-track with its IMF programme.

The Development Secretary’s decision is in line with international concern over Malawi’s current position. The World Bank, the European Union, the African Development Bank, Germany and Norway have all suspended or ended general budget support to Malawi.

Andrew Mitchell, Secretary of State for International Development, said:

“The UK provides development assistance in order to help communities lift themselves out of grinding poverty, whether that’s through getting children into school, ensuring women survive childbirth or helping farmers grow enough food to feed their families and communities.

“But poor people in Malawi and British taxpayers alike have been let down. In these circumstances I cannot justify the provision of general budget support for Malawi.

“In the meantime we will use other means to ensure that programmes to protect poor Malawians, amongst the poorest people in the world, and deliver basic services like health and education are able to continue.

“The UK has a long and deep commitment to the people of Malawi and we are keen to see the country resume the good progress it has made in recent years. I remain willing to reconsider our approach as and when our concerns are addressed.”

The UK has helped improve food security in Malawi for over seven million people a year by providing them with high yielding maize and legume seeds via the Farm Input Subsidy Programme.

UK support to strengthen the health service has helped save the lives of 3,200 pregnant women and 40,000 children since 2004. UK funding has built over 3,200 primary school classrooms and 4,800 toilets since 2001, helping keep more girls in school.
This comes as the Government reduces general budget support across the world by 43% and tightens up the principles on which budget support agreements are made.

All budget support is tightly monitored against a strict set of expected results and can be reviewed by the Independent Commission for Aid Impact at any time.

UK Green Economy Lags Behind Following Launch Of Europe’s Most Advanced Eco Village

UK-based Oxford Sustainable Group, Europe’s largest renewable energy and sustainable development business, has announced the launch of Oxford Park, the most advanced sustainable village in Europe. Located near Tallinn, Estonia, the £170m project is a carefully planned sustainable community that consists of infrastructure, energy and social provision to meet the needs of its residents and the businesses that choose to locate there.

The Oxford Sustainable Group has designed Oxford Park using its Oxford 360 degree Sustainability Index. This has allowed it to create a community that is well in advance of UN Principles of Responsible Investment (PRI) norms for sustainability. This considers the broader requirements of the residents, surrounding economic, environmental, energy, educational, transport and leisure needs as well as long-term job creation, regeneration, finance and investment requirements. The Oxford Sustainable Group has shown that by taking a holistic approach to sustainable development it can increase profitability while benefitting other stakeholders including residents, the local and wider economcy, society and environment.

“Sustainability means a lot more than planning carbon neutral buildings or trendy underground transport systems,” said Hadley Barrett, chief executive of OSG. “We can only create truly sustainable communities if we consider all of the stakeholders in a project. That includes government, investors, and the entire supply chain – as well as the people who will live and work there – and be able to supply a sustainable product at the right price. True sustainability does not mean higher prices.

“We have a practical and down-to-earth approach for Oxford Park that is successful, sustainable and economically viable – investors do not need to turn to projects in the Middle East for green growth. We would like to replicate the planning success of Oxford Park in the UK but we need simplified regulation which allows ‘good developers’ to be fast-tracked rather than held back. We do not need more definitions of carbon free homes, we need facilitating regulation which allows trusted partners to move quickly and effectively and bring about positive changes through entrepreneurship. Practical government agencies from Finland and other locations have been asking us to help them replicate the success of Oxford Park in their countries. Currently the UK is lagging behind.”

Insurers blacklist drivers based on postcode

 

Premiums are soaring as honest motorists foot the bill for the ‘fraud epidemic’ sweeping the country, which has lead to insurers secretly to blacklist certain postcodes.

Many car owners have seen a rise of up to forty per cent in insurance premiums over the past year, insurers are blaming an increase in fraudulent claims

An investigation has shown blacklisted areas of the UK where concentrations of fraudulent activity have taken place. These claims have lead some insurance companies to flat-out refuse some motorists insurnace in some areas.

The most popular fraudulent incidents include staged accidents, bogus injury claims and fronting, where parents claim they are the main driver for heir child’s car.

Top ten areas for fraudulent claims; Birmingham, Liverpool, Bradford, East London, Manchester, North London, Bolton, Blackburn, Southall and Oldham.

Birmingham tops the list with a staggering one in ten suspicious claims, with B8 – east Digbeth being one of the worst spots followed by B15 – Edgbaston

James Heath, head of counter fraud strategy at Keoghs, says: ‘We are now seeing what can reasonably be described as a fraud epidemic across the UK.

‘It is clear from these results that fraud is no longer restricted to the country’s most heavily built-up areas.’

See how your postcode affects your car and home insurance at www.thisismoney.co.uk/postcode

Less than £10 spend per child on ICT in many UK schools

Across in England and Wales 1,804 primary schools spend less than £10 per pupil on ICT (Information and Communication Technology) equipment. Many pupils are therefore going without up-to-date learning tools, reveals research by Syscap, a leading independent IT finance provider to the education sector.

Worse still between the period of April 1 2009 to March 31 2010 377 of the 14,495 primary schools in England and Wales spent nothing at all.

Philip White, Chief Executive of Syscap, comments: “To hear that 12% of primary schools are spending £10 per primary school pupil is especially worrying as this data covers a period before the real tightening of education budgets began.”

Says Philip White: “ICT resources have a very short shelf life especially in a school environment. Low levels of ICT investment means that schools will soon be running old, slow and very unreliable equipment which will impair the effectiveness of learning through ICT use.”

“When you consider the pace of change in ICT equipment and the increasing importance of ICT to the competitiveness of the UK economy such a small per pupil expenditure seems anachronistic.”

“Arguably you can choose to put off investing in other parts of the school’s infrastructure for a while such, as buildings, but deferring investing in technology can have a very quick and detrimental impact on the effectiveness and relevance of their ICT assets.”

“Even the national average spend annual spend on ICT of £50 per primary school pupil is seen by many commentators as too low.”

“Ofsted’s surveys of the use of ICT in schools find that technology can be extremely effective in helping pupils to acquire literacy skills. For example, using the internet for research is a great way to engage boys who are felt to be reluctant readers and writers, and computer software can be used to help children with English as a second language with their grammar and pronunciation.”

“But obsolete equipment will mean that schools can’t use the latest educational software, and pupils will inevitably lose their enthusiasm for a project if the computer keeps crashing”

Philip White added: “Most of us take access to the internet and using a computer for granted, and it is easy to forget that for many children, school is the only place where they can use technology.”

“Of course new investment is difficult in this economic climate, but it is vital that pupils are not left behind in a world where more and more information is being delivered through technology.”

Philip White says schools can bypass the short-shelf life of IT resources easing ICT equipment at a fixed cost per year.

UK House Prices to Rise Following Slow but Steady Economic Recovery

London Row HousingWith the economy on the rise, prices in the housing sector are creeping upwards, prompting what many real estate experts believe could be a major crisis in the cost and accessibility of housing to Britain’s employee base. Despite a fall in net exports, Britain’s economy has slowly recovered over the last year to a point of relative stability, although not everyone is reaping its gains.

City employees have been praised for improving economic stability – an unusual situation given then immense criticism many leading UK banks had been given just months before the economy began to improve. Yet with major banks and employers leading the UK out of its biggest trouble period in recent history, many believe that increased housing costs could hit employees hardest.

The average cost of a home rose from £166,351 to £167,425 in July – an increase that, if continued, could see the domestic housing market become one of the most costly and relatively inaccessible in Europe. Housing prices in the greater London area – one of Britain’s most important economic areas – are even greater, prompting many real estate experts to worry about a second housing ‘crisis’.

Property economists have highlighted the volatility made clear by such sudden increases, claiming that the UK’s housing sector will continue to attract rapid changes in value over the next year. July marks a high point for property investors – it appears that prices may begin to decrease towards the end of 2010.

For many first-time homeowners, that would be a very good thing. With unemployment still at high levels and Britain’s economy recovering slowly, higher housing prices will put property out of reach for hundreds-of-thousands of employees. Should price instability take over, many of Britain’s most enthusiastic real estate investors could see a lucrative, or disastrous, end to the year.