Business News Round Up (13/06/2022)

UK retail sector shed hundreds of thousands of jobs as economy face risk of recession

Almost 650,000 jobs have been lost in the UK’s retail sector over the past five years, according to new figures. The Centre for Retail Research said that 645,204 retail jobs have been lost and 72,580 stores closed across the whole of the UK during the five years since 2017. This included 105,727 jobs lost last year as the continuation of the furlough scheme kept losses below previous years. The stark figures come as high street firms face a significant increase in business rates after benefiting from tax breaks during the pandemic. Business rates liabilities, the tax on commercial properties, are worked out based on a property’s “rateable value”. Finance Secretary Kate Forbes recently hinted that business rates might have to rise in her recent spending review which aims to head off a projected £3.5 billion shortfall by 2027. She said that for the next rates revaluation to be revenue-neutral in 2023-24 “based on current expectations about the tax base, an increase in the poundage would be required”. The Scottish Retail Consortium has estimated retailers account for close to a quarter of all business rates in Scotland. Recent figures revealed retailers are struggling to recover from Covid, with shopper footfall growth the worst in the UK.

Inflation and economic uncertainty lead to slowdown in North West business activity

The latest Regional PMI data from NatWest published today (June 13) showed a slowdown in the rate of business activity growth across the North West in May. This reflects a loss of momentum in the post-lockdown recovery and headwinds to demand from rising prices and economic uncertainty. Firms reported a sharp increase in charges for goods and services as they continued to grapple with rising costs, although a rise in employment was indicative of relatively resilient business confidence in the region. The headline North West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – registered 53.0 in May. Although still above the 50.0 no-change threshold, the latest reading was down from April’s 58.7 and signalled the slowest growth for four months. May saw a further increase in new business across the North West private sector, driven by a sustained rebound in demand for services following the lifting of COVID-related restrictions. However, owing to a combination strong price pressures and weakness in manufacturing new orders, the rate of growth eased for the third month running to the weakest since January. After falling to a four-month low in April, firms’ expectations towards future activity showed a slight rebound midway through the second quarter. The improvement in confidence among businesses in the North West contrasted with a decline across the UK as a whole.

Record Q1 tech investment sees UK overtake China

UK tech companies have raised more venture capital funding in the first five months of 2022 than in the whole of 2020. This puts the UK second to the US globally when it comes to start-up investment and means that UK start-ups are outperforming those in China, France, and India, when it comes to attracting funding, according to data by Dealroom analysed for the UK’s Digital Economy Council. So far, more than 950 UK tech start-ups and scaleups have raised £12.4 billion in 2022, compared to £12bn for the whole of 2020. In a record-breaking first quarter, UK tech raised £9bn, up from £6.3bn the same time last year, with the UK ahead of India and China when it comes to start-up funding, as well as raising more than double the funding raised by French tech companies.  This influx of capital means the UK is now home to 122 unicorns, with more than 20 cities and towns home to at least one unicorn, and 248 ‘futurecorns’. More than a third of the fastest-growing next-generation tech companies in Europe are now based in the UK.  The new data coincides with the launch of London Tech Week, which brings together leading names from across the UK’s digital industries. 

Employee-owned businesses in Scotland pass 200

Employee-owned businesses in Scotland have passed 200, making it the third largest growth area in the UK for the ownership model. Two more companies have announced they are making the switch. Carlton Bingo has become the country’s largest employee-owned firm and a grooming company in Glasgow has also handed control to its staff. With a presence in 10 locations, the four major shareholders in Carlton Bingo – Chris Barr, George Carter, Brian King, and Peter Perrins – have created an Employee Ownership Trust. Mr Carter said a management buyout had been an option “but that really only defers the problem of succession”. Carole Leslie of Ownership Associates worked with directors on the programme of employee communication. The Executive Shaving Company, a Glasgow-based online retailer of men’s wet shaving and grooming items, was guided by Cooperative Development Scotland (CDS). The latest moves come just weeks after new census data revealed there were 195 employee-owned businesses (EOBs) in Scotland at the end of the 2021/22 financial year – with the latest transitions now bringing that total to just over 200.