Business News Round Up (18/11/2021)
Supply chain disruption could cost the UK economy more than £5.6bn
The impact of lingering supply chain disruptions, which will continue impacting retailers through 2022, will lead to fewer deals, lower sales and could cost the UK economy more than £5.6 billion, according to research from Coupa Software. The company surveyed more than 600 supply chain leaders at retailers in the US, UK, France, and Germany and was conducted in October. The research, which was carried out by Sapio Research on behalf of Coupa, found that retailers anticipate revenue losses between 5-20% from the past 18 months due to supply chain issues. More than half (58%) estimate losses over 5%, while a quarter (26%) expect losses greater than 10%, and 5% said they will be greater than 20%. The US is hardest hit with retailers there reporting average losses of 5.7% – equating to $68bn from its GDP, followed by the UK with 5.3% – equating to £5.6bn from its GDP. The implications of this will extend into retailers’ abilities to offer cut-price deals to convince customers to shop. According to the survey three in four (76%) UK retailers who usually offer Black Friday deals will not offer as many this year. Just under a third (29%) say they will offer between 25% – 50% fewer deals while 12% say they will offer between 50% – 75% fewer deals. Retailers are also worried about the impact of supply chain disruptions on Christmas revenue with nearly three in four UK retailers (72%) saying they are concerned.
Nearly 20,000 Scottish businesses close in a year
Nearly 20,000 businesses in Scotland have closed down in a year, according to the latest Scottish Government Business in Scotland report. It showed that there were 19,805 fewer businesses in March – a 5.4% drop from the previous year – falling to 344,505 companies in the private sector – the lowest figure since 2014. The report bucks a significant trend in Scotland over the last two decades, which has seen an increase of almost 45% in the number of firms. The majority of the decrease came from unregistered businesses, which fell by 10.3% (19,015) to 165,835. But registered businesses also saw a drop of 790 (0.4%) to 178,670. Unregistered companies do not qualify for VAT registration, because they have a turnover of less than £85,000 per year, or for PAYE registration, due to there being no employees other than the owner. The timeframe for the report begins as Scotland was put into lockdown, with restrictions imposed on most of the country throughout the following year. Firms headquartered outside the country accounted for 54.4% of turnover in Scotland, with only 3.3% of businesses being based elsewhere.
https://www.insider.co.uk/news/nearly-20000-scottish-businesses-close-25481788
UK prices soar at fastest rate for almost ten years
The cost of living has surged at its fastest pace in almost 10 years, hitting 4.2% in the year to October. It is mainly due to higher fuel and energy prices but the cost of second-hand cars and eating out also rose, the Office for National Statistics said. Inflation is up sharply since Covid restrictions ended this year and the economy reopened. The Bank of England says it may have to raise interest rates in the “coming months” to tackle rising prices. October’s reading is far higher than the 3.1% rise recorded in the year to September and more than double the Bank’s target of 2%. Household energy bills were the biggest driver of inflation after Ofgem, the energy regulator, lifted the price cap on domestic gas and electricity last month. It meant that gas bills rose by 28.1% in the year to October, while electricity climbed by 18.8%. Petrol prices also rose by 25.4p to 138.6p per litre amid a surge in global oil prices. That’s the highest price since September 2012.
https://www.bbc.co.uk/news/business-59316544
Manchester is UK’s tech start-up capital, outside of London
A new study has revealed Manchester as the UK’S tech start-up capital, outside of London. The research, by software development experts KLOC, analysed data from Crunchbase for tech businesses created outside the capital since January 2020. The study measured the number of start-ups per area, the total funding they have received, the average software engineer salary and how the area’s top university ranks for its computer science courses, with a score out of 10 for each of the four factors. Manchester achieved the highest overall score of 27.38, thanks to the joint number of tech start-ups in the country in total, with 10. It received a score of eight for its average annual salary for software engineers, standing at £38,066. The University of Manchester has the third best rated computer science course of the universities included on the list, giving the city a further 8.8 points. Cambridge came in second for tech start-up hotbeds outside London, scoring a total of 25.72 points. Edinburgh was placed third on the tech start-up capital list scoring 24.28 in total.