Morning business news - January 9Thursday 09 January 2014 10.52
Tesco continues to feel the pain in its home market. Today it reported that sales at British stores open over a year fell, as analysts had been expecting, by 2.4% in the six weeks to January 4. Competition is fierce in the UK as indeed it is here where Tesco is fighting a battle to retain market share.
David Berry, commercial director with market research firm Kantar Worldpanel Ireland, says that 2013 was a tough year for Tesco as it lost some of its market share Ireland. He says being the market leader can be tough as all competitors focus on the number one in the market. Mr Berry says that discounters Aldi and Lidl have been picking up market share, as well as a strong performance from Dunnes Stores, which had quite a big campaign on its Clubcard in the run up to Christmas. Mr Berry says that value remains the key priority for consumers and that while they do have an element of loyalty, they will follow good value and good offers.
MORNING BRIEFS - A report commissioned by RSA into financial irregularities at its Irish subsidiary concludes that they resulted from weaknesses in the way its policies were implemented locally rather from failures of governance at group level. The PwC report focuses on the way its policy on large losses resulting from claims was applied in Ireland. It also found that there was "inappropriate accounting" for income in some circumstances. It said there were "no obvious indicators" of the issues in Ireland that were ignored higher up within RSA. RSA also said that following an internal disciplinary process, its Ireland chief financial officer, Rory O'Connor and its Ireland Claims Director Peter Burke, have been dismissed for their roles in relation to large loss and claims accounting irregularities. The Irish CEO Philip Smith has already resigned claiming he was being unfairly scape goated by the company.
*** Grafton Group, the builders merchant and DIY retailer, is talking about improved economic conditions here and in the UK and evidence of a recovery underway. In its trading update this morning, the company reports an 8% increase in revenue for the year to the end of December. Its UK and Irish merchanting businesses both recorded growth, the final quarter of the year seeing a notable pick-up in Ireland. Grafton, which owns the Woodies and Atlantic Homecare DIY chains, said there was a noticeable improvement in sentiment but that consumers are still relatively cautious about their finances.
*** Marks and Spencer saw its overall sales rise by almost 2% over the three months up to December 28. But, as expected, its general merchandise sales - including clothing where M&S has been taking a lot of flack - fell on a like-for-like basis.
*** The chief executive of Emirates airline Tim Clark has said it intends to double the number of flights between Dublin and Dubai. He was speaking after a meeting with the Taoiseach at Emirates headquarters in Dubai this morning.