UK retailers face crisis
About 1,600 UK retailers could go out of business this year as stores struggle to contend with a slumping consumer economy, Experian Ltd said yesterday. The number of collapses was set to increase 21 percent from a year earlier, with sellers of electronics goods and household and home renovation products the worst affected, the researcher forecast in an e-mailed report. UK shopping numbers rose 1.2 percent last month from a year earlier as retailers engaged in an “exceptional level of discounting,” Experian said. Any increase in store owners’ sales last month was at the cost of lower profitability, as slashed prices and an increase in purchasing costs ate into margins, Experian said. “It seems unlikely that consumer sentiment will show much if any improvement in the first three months of 2009,” Experian senior economist Matthew Sherwood said.
Drug giant cuts jobs
British drugs giant GlaxoSmithKline (GSK) will announce it is cutting up to 10,000 jobs when it posts full-year results this week, Sky News reports said on Sunday. The group had confirmed it would cut thousands of jobs when it publishes its results on Thursday, the report said. The Sunday Telegraph also reported that 6,000 jobs would go, while the Observer put the figure at 10,000, which would represent 10 percent of the group’s worldwide workforce. The global pharmaceuticals giants are facing a growing commercial challenge from cheap, generic drugs as dozens of high-selling medicines lose patent protection. GSK’s rival, AstraZeneca, said on Thursday it would axe more than 6,000 jobs by 2013, extending a cost-cutting program that had already shed about 8,000 positions since 2007.
Crude prices slightly down
World prices were mixed in Asian trade yesterday, with weak global demand continuing to be a major factor, dealers said. New York’s main futures contract, light sweet crude for March delivery, was down US$0.11 to US$41.57 a barrel in afternoon trade. Brent North Sea crude for March delivery rose US$0.07 to US$45.95. Jonathan Kornafel, Asia director of Hudson Capital Energy, a trading firm, said a slight rise in prices late last week would not be sustained. The gains followed wildcat strikes at oil refineries in Britain, as well as data showing a milder-than-expected economic contraction in the US.
Banker rejects issue plan
German central bank chief Axel Weber, rejected the idea of a European bond issue floated by Italy to help countries finding it harder to obtain credit, a press report said yesterday. Weber, who is also a governor of the European Central Bank told the business daily Handelsblatt that such a move would undermine the disciplinary character of financial markets. He said that a commitment by eurozone members to respect common fiscal rules was a cornerstone of European monetary union. That was “a basic condition for adoption of the single currency,” Weber was quoted as saying. Italian Economy Minister Giulio Tremonti recently launched the idea of pan-European loans that would be backed by bond issues. Italy is one of the most indebted countries in the 16-member eurozone. But German is wary of increasing its own debt after working in recent years to bring its finances into line with eurozone regulations and having to stimulate its economy — Europe’s biggest — with a massive economic aid package.