Discount supermarket Lidl has revealed its British arm swung to an annual loss after seeing costs rise “across the board” and as it invested heavily in the chain.
The group reported pre-tax losses of £76m for the year to February 28 against profits of £41.1m the previous year.
Sales jumped 18.8pc to £9.3bn over the year and it increased its share of the supermarket sector.
It said the losses came as it faced surging cost inflation and made significant investment in prices for shoppers, staff wage hikes, new store openings and suppliers.
It comes as Lidl and rival discounter Aldi lost market share for the first time in months after British supermarkets launched a price war counter offensive.
Aldi lost ground in the 12 weeks to September 3, new figures from Kantar show, marking its first decline in market share this year.
Meanwhile, Lidl has lost market share for the first time in seven months.
Read the latest updates below.
08:22 AM BST
Lidl battles ‘increase in costs across the board’
Lidl said the “challenging inflationary environment” led to an “increase in costs across the board” for the group as its UK business fell to a loss.
The German discounter revealed pre-tax losses of £76m for the year to February 28 in Britain.
Ryan McDonnell, chief executive of Lidl’s British business, said:
The entire retail market has seen inflation, and we are no exception.
However, for us, what is important is that our price gap to the traditional supermarkets is as strong as it has ever been.
We’ve invested in keeping our prices low for customers in what has been a very challenging year for most.
08:13 AM BST
Wilko brand will continue to deliver, says The Range boss
After his company’s acquisition of the Wilko brand, The Range chief executive Alex Simpkin said:
This acquisition comes at a time when consumers are more than ever wanting to shop with confidence for value and quality, we are delighted to have acquired this brand and we will ensure that the Wilko brand will continue to deliver for the UK consumer, both in-store and on-line.
I am also delighted that we were able to retain the Wilko digital trading team, the team are very skilled and experienced, and it means a lot to us to ensure that we could save as many ‘fellow’ retail positions as possible.
Chris Dawson, founder and chairman of The Range, said:
These are exciting times for The Range Group, I am delighted that Wilko will join our family of companies.
We will drive it forward as fast as we can as we expand the entire business from our continuing store opening programme to our new 1.2m square foot distribution centre that is being constructed in the South of England.
08:06 AM BST
FTSE 100 opens higher
The FTSE 100 has risen amid hopes the Federal Reserve may pause rate rises and ahead of the European Central Bank’s interest rate decision.
The UK’s blue-chip index has gained 0.2pc to 7,537.43 after the open, while the midcap FTSE 250 was little changed at 18,559.75.
08:01 AM BST
THG losses deepen as beauty division slumps
E-commerce firm THG widened its first-half losses as its sales were held back by its beauty division.
The company, formerly known as the Hut Group, revealed an 12pc increase in operating losses to £99.5m.
Bosses also lowered their revenue guidance for the business, which runs hundreds of beauty and lifestyle websites, forecasting a drop of as much as 5pc.
The firm, which listed in 2020, said pre-tax earnings before charges in its beauty division would be £10.6m, down from £17.7m in the first half of last year, which it said was “impacted by one-off industry de-stocking in manufacturing”.
Chief executive Matthew Moulding said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months.”
07:47 AM BST
The Range buys Wilko brand, administrators confirm
The Range has agreed to buy Wilko’s brand, website and intellectual property, administrators for the collapsed retailer have confirmed.
PwC, which was hired to oversee Wilko’s insolvency last month, said it expects online operations to recommence once Wilko’s store closure programme concludes in early October.
The deal, for an undisclosed sum, will also see 36 workers from Wilko’s digital team transfer over to the Range.
Joint administrator Jane Steer said:
Since our appointment, the feedback from customers and wider stakeholders during this challenging period has reinforced the fact that Wilko remains a much loved and trusted brand within the UK.
This sale to The Range will ensure that the wilko name lives on under their ownership and we wish The Range every success.
07:42 AM BST
European gas prices rise as Australian workers ramp up strike action
European wholesale gas prices have held their gains after workers at two major Australian plants ramped up strike action.
Dutch front-month futures, the benchmark contract used by traders, have gained more than 6pc since late trading on Wednesday and rose as much as 3.2pc this morning as unions promised to ratchet up industrial action in the “coming days and weeks”.
Chevron said it has been given notice that workers could commence rolling 24-hour walkouts as of 11pm UK time on Wednesday.
Workers had already been carrying out partial strikes for short periods of time over the last six days at the Wheatstone and Gorgon plants, which produced about 7pc of global gas supplies last year.
Although most of its output is sold in Asia, a downturn in production would force the countries on the continent to turn to the European market, squeezing supplies.
European gas is trading at around €37 per megawatt hour.
07:38 AM BST
John Lewis has ‘long road ahead,’ says boss
Dame Sharon White hailed a five-fold increase in cash across both the John Lewis and Waitrose brands, but accepted that “transformation for the partnership will take time”.
The chairman of the John Lewis Partnership told BBC Radio 4’s Today programme: “It’s a long road ahead but there are lots of positive signs so far.”
07:32 AM BST
John Lewis pushes back profitability plan as it reveals half-year loss
The John Lewis Partnership has said the five-year transformation plan launched by the retail group in 2020 will take two years longer than planned as it posted another half-year loss.
The group, which runs the department store chain and Waitrose supermarket arm, saw pre-tax losses narrow by 41pc to £59m for the six months to July 29.
The group also recorded a 2pc increase in sales across the partnership to £5.8bn as it hailed higher sales on beauty and fashion but reduced demand for “technology and big ticket home items”.
John Lewis said that the “Partnership Plan” it launched in 2020 with the target of a £400m profit by 2025/26, was now going to take until 2027/28 due to “inflationary pressures”.
It added that investment into its strategy and customers was going to “take precedence” over its annual bonus for staff members.
Sharon White, chairman of the John Lewis Partnership, said:
The partnership is a unique model that has been tested and come through stronger many times in our 100 year history.
While change is never easy, and there is a long road ahead, there are reasons for optimism.
Performance is improving. More customers are shopping with us. Trust in the brands and support for the Partnership model remain high.
07:29 AM BST
Thanks for joining me. John Lewis has blamed “inflationary pressures” for a two-year delay to its five-year turnaround plan.
It comes as the retailer announced another loss for the first six months of its financial year.
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What happened overnight
Shares were mostly higher in Asia on Thursday after a highly anticipated report showed inflation accelerated across the US in August, but not by much more than expected.
The subdued increase in prices eased worries over the likelihood of another interest rate hike by the Federal Reserve, leading Tokyo’s Nikkei 225 to surge 1.2pc to 33,104.79.
Hong Kong’s Hang Seng index slipped 0.2pc to 17,969.38 on renewed concern over China’s property sector. Major real estate developer Country Garden’s Hong Kong-traded shares sank 4.6pc ahead of a deadline for a bond repayment.
The Shanghai Composite index was flat, at 3,124.43, while Seoul’s Kospi gained 0.9pc to 2,556.60. In Australia, the S&P/ASX 200 advanced 0.5pc to 7,189.70.
Wall Street delivered a mixed performance on Wednesday after fresh data showed inflation accelerated last month but not by much more than expected.
The S&P 500 nudged up 0.1pc to 4,467.44 after flipping between small gains and losses a few times through the day.
The Dow Jones Industrial Average dropped 0.2pc to 34,575.53, and the Nasdaq composite climbed 0.3pc to 13,813.59.
In the bond market, the benchmark yield on the 10-year Treasury edged down to 4.26pc from 4.27pc late Tuesday. It had swung as high as 4.34pc immediately after the inflation report.