What to watch: Tesco posts record sales, Taylor Wimpey sees strong recovery and Premier Inn cuts jobs

Kumutha Ramanathan
·4 min read
A customer shops at a Morrisons store in Welling, south east London November 24, 2009. REUTERS/Stefan Wermuth (BRITAIN BUSINESS FOOD)
Tesco reported record sales over the Christmas period. Photo: Stefan Wermuth/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

Tesco posts record sales

Tesco (TSCO.L) enjoyed a record Christmas of sales, delivering seven million orders amid “unprecedented demand” for online groceries.

The UK’s biggest supermarket said in its latest statement its total sales across the group were up 6.8% in the Christmas period, and 7.1% in its third quarter. Revenues in its third quarter to 28 November and the following six weeks to 9 January hit £19.9bn ($27.1bn).

The company said it expected operating profits to be “at least” the same in the 2020-21 financial year as the previous year, excluding the repayment of £585m in business rates relief.

Tesco was the first of a string of supermarkets last month to pay the government back the funds saved under the relief, which had been introduced primarily to support closed “non-essential” retailers.

Taylor Wimpey sees strong recovery

Taylor Wimpey (TW.L) said on Thursday that it had started 2021 “with an excellent order book” following a strong sales recovery in the second half of 2020.

By putting in measures to “operate in a COVID-secure manner,” the business was able to ride the pandemic wave and keep up with demand.

Shares (TW.L) have been moving modestly, flat at around 10am in London.

Taylor Wimpey shares have been making modest moves on Thursday, alongside the rest of the FTSE index. Chart: Yahoo Finance
Taylor Wimpey shares have been making modest moves on Thursday, alongside the rest of the FTSE index. Chart: Yahoo Finance UK

“The UK housing market has remained resilient and our production and sales have recovered strongly since the shutdown,” said Pete Redfern, chief executive. “We expect to report full year 2020 results in line with market expectations.”

The housebuilder also added that for the current year, forward private sales were already at more than 50% of its target.

The business ended the year with a total order book valued at £2.68m, compared to £2.18m in the previous period, excluding joint ventures.

The house building industry has faced hits of late due to ever-changing COVID-19 restrictions in 2020 and into this year as work on construction sites has been halted as the sector is not deemed essential work.

Premier Inn cuts jobs

Premier Inn owner Whitbread (WTB.L) has cut 1,500 jobs as part of restructuring efforts at its hotel and restaurant operations following coronavirus-related sales losses.

In its third quarter trading update on Thursday, the company highlighted that these losses were to “ensure our cost base is reflective of the current demand environment” and far less than the 6,000 redundancies that were previously earmarked. This was partly due to cost savings as more colleagues accepted a reduction in maximum contracted hours.

Group sales fell 54.3% in the third quarter as people dined out far less and avoided staying at hotels amid the pandemic.

The looming COVID-19 restricts have created “challenging hotel market conditions” the business said, with total UK accommodation sales down 55.2% with occupancy at 49.3%.

European markets pause for breath amid Trump impeachment and Biden's stimulus plan

European markets on Thursday continued their trend this week of making modest moves as investors turned their focus from the second impeachment of Donald Trump, making him the only US president to be impeached twice, to focusing on signs of president-elect Joe Biden’s COVID-19 stimulus proposals.

The FTSE 100 (^FTSE) opened higher 0.1% in London. Germany’s DAX (^GDAXI) gained 0.2% in Frankfurt, while the CAC 40 (^FCHI) was flat in Paris.

US futures were quiet. The S&P(ES=F) was up 0.2%. Dow Jones (YM=F) gained 0.3% and the Nasdaq (NQ=F) slid lower 0.1%.

Asian markets were mixed. Japan’s Nikkei (^N225) gained 0.9% at market close, the Hong Kong Hang Seng (^HSI) leapt up 0.9% and the Shanghai Composite (000001.SS) fell 0.9% at market close. South Korea’s KOSPI (^KS11) headed higher 0.1%.

-With additional reporting by Tom Belger

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