Marketing Newscast

(Edited 07 January 2025)

The British High Street failed to receive the boost it had hoped for over the Christmas period according to the British Retail Consortium (BRC) which said sales grew just 0.3% overall in the ‘golden quarter’, which includes Black Friday and Cyber Monday as well as Christmas. Also, overall bricks-and-mortar retail sales were up by just 0.4% year-on-year, while online sales increased by 11.1%. “Following a challenging year marked by weak consumer confidence and difficult economic conditions, the crucial ‘golden quarter’ failed to give 2024 the send-off retailers were hoping for,” BRC CEO Helen Dickinson said. The gloomy news has led the BRC to predict that sales growth will average 1.2% in 2025, below projected shop price inflation of 1.8%. The trade body also estimates the regulatory and tax burden on retailers will increase costs by £7bn in 2025. These consist of rising National Insurance Contributions, an increase in the national living wage, and new packaging taxes. “With little hope of covering these costs through higher sales, retailers will likely push up prices and cut investment in stores and jobs, harming our high streets and the communities that rely on them,” Dickinson added. The Centre for Retail Research (CRR) predicts over 200,000 retail jobs will be lost this year, along with over 17,000 stores, in part due to higher taxes. It is known that big chains, including Greggs, The Body Shop, and Matalan, are closing at least nine stores this month, and Next has announced it is making what it recognises are "unwelcome" price rises to help offset a £73m increase in staff wages. The High Street retailer said its costs will rise because of Labour’s first Budget hikes to Employer National Insurance contributions and the National Living Wage. Next expects to increase its prices by 1%, which it said was below the current rate of inflation. Barclays Bank, meanwhile, has reported consumer spending on debit and credit cards was flat in December. Although people were splashing out on entertainment and leisure, this was offset by cutbacks in essential spending elsewhere, Barclays said.

The service sector has been shedding jobs at the fastest rate since January 2021, according to the latest S&P Global UK Services PMI survey, which polls 650 service sector companies. Weak customer demand and higher payroll costs are blamed for the job cuts, reported by nearly a quarter of survey respondents. “Service providers widely commented on concerns about cutbacks to business and consumer spending, alongside the impact of rising employers’ National Insurance contributions,” the report said. Tim Moore, Economics Director at S&P Global Market Intelligence, said that “worries about domestic economic prospects in 2025 had led to a considerable loss of growth momentum.” However, he also noted that “pockets of growth” remained in areas like technology services and that 12% of firms had reported a rise in workforce levels.

KPMG’s latest jobs report also shows private sector salary growth has reached its slowest pace since December 2021, and that there has also been a rise in redundancies. Shadow Secretary of State for Business and Trade, Andrew Griffith, said this survey showed the “heavy price of [Labour’s] trash-talking the economy and attacks on business”. “Labour was warned,” he added. “With Christmas over, we are looking at a cold January of discontent — and this Government still just don’t get it”.

In response to such reports signalling economic gloom, a Government spokesperson said: “Despite the difficult inheritance, this Government is determined to go for growth and to work in partnership with businesses to invest in Britain’s future so we can make every part of the country better off. That is why we are delivering our Plan for Change with investment and reform to deliver growth and putting more money in people’s pockets. We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets.”

Meanwhile, City AM has teamed up with Freshwater Strategy to launch a new monthly poll, the first of which has found that 72% of voters say the UK is going in the “wrong direction”, a figure that includes 53% of those who voted for Labour in the General Election last summer. Despite Labour’s landslide election win, 75% of voters polled said they were not confident in the UK government’s plan to deliver economic growth, a number that included 52% of 2024 Labour voters. Just one in six voters believe Labour is best placed to manage and grow the economy, compared to 20% who think Conservative party leader Kemi Badenoch could do a better job, and 24 % who say the same for Reform leader Nigel Farage. 55% of those asked expect the economy to deteriorate in 2025. Just 16% believe it will improve. Almost half of voters expect their household finances to be worse in 2025, with 48% believing they will feel poorer, versus 50% who think it will be the same or better. Just over half of those polled said their living standards had worsened over the past year and only 13% believed they had improved. 53% think they will worsen again over the coming 12 months. Freshwater’s country manager Matthew Lesh warned the findings “make grim reading for Starmer” and indicated “frosty attitudes from the British people”. The poll, he said, “shows how the hope of change that was promised by Labour just last July has now turned to despair from voters”. Freshwater Strategy interviewed 1,207 eligible voters in the UK, aged 18+ online, between 4-6^th January 2025.

City Minister Tulip Siddiq has referred herself to the Government’s standards watchdog in the wake of revelations that she was gifted a property by property developer Abdul Motif, who has links to her aunt, the deposed Bangladeshi leader Sheikh Hasina and her Awami League political party. In her letter to Sir Laurie Magnus, the Prime Minister's Independent Adviser on Ministers' Interests, Siddiq wrote: “In recent weeks I have been the subject of media reporting, much of it inaccurate, about my financial affairs and my family’s links to the former government of Bangladesh. I am clear that I have done nothing wrong. However, for the avoidance of doubt, I would like you to independently establish the facts about these matters”. Since then Keir Starmer's spokesman has said the referral is a "fact-finding exercise to determine if an investigation is needed." Shadow home secretary Chris Philp said Siddiq should be “removed from her role as anti-corruption minister until these questions are answered.” He added: “It is high time for Tulip Siddiq to explain the source of her wealth, and whether any of it comes from the proceeds of her aunt’s alleged corrupt dealings”.

McDonald's workers have told the BBC they still face sexual abuse and harassment, a year after the fast-food chain promised to clean up behaviour. 19-year-old Matt claimed some of his colleagues were scared of going into work, and that managers would "touch up" other members of staff. Since the BBC's original investigation into the company, the UK equality watchdog has heard 300 reported incidents of harassment, and now plans to intervene again. A McDonald's spokesperson said the company had undertaken "extensive work" over the past year to ensure it has industry-leading practices in place to keep its workers safe. McDonald's UK boss Alistair Macrow has been summoned by the House of Commons’ Business and Trade Committee or the second time today to answer MPs' questions on sexual abuse allegations.

French energy giant Total Energies has shut down a key North Sea hub amid growing concerns over the Government’s windfall tax, The Telegraph reports. Production was halted at the Gryphon terminal, which is responsible for providing around 2% of Britain’s oil and gas supplies, on New Year’s Day, meaning an estimated 9m barrels of oil will remain untapped in the basin. The Treasury is also expected to miss out on £150m worth of tax receipts as a result of the shutdown, according to Larry Batess, the CEO of North Sea operator Nobel Upstream, which has launched a legal challenge against the North Sea Transition Authority’s (NSTA) decision to approve Total’s decommissioning plans. The windfall tax, introduced by the Conservative government in 2022 and extended by Labour, imposes a 78% tax on UK oil and gas production profits. Energy Secretary Ed Miliband’s Department for Energy Security and Net Zero said the decision to shut down Gryphon was a commercial decision by Total. Total declined to comment when asked by the Telegraph.

Sir Nick Clegg, the former Liberal Democrat party leader and Deputy Prime Minister under David Cameron during the 2010-2014 coalition Government, has announced he is leaving Facebook and Instagram, and WhatsApp owner Meta, after six years as second in command to the billionaire owner and creator Mark Zuckerberg. It has since been announced that Cage fighting tycoon and close Donald Trump ally Dana White is joining the Meta board.