Ministers should ‘start doing stuff’ to help farmers and cut fuel costs, says Asda boss
Asda’s executive chair has called on the government to “stand up and start doing stuff” to support farmers and ease the price of fuel as he warned that food prices would inevitably rise as a result of the conflict in the Middle East.Allan Leighton said farmers were under pressure but the supermarket chain had so far received “a trickle of requests not an avalanche” of cost price increases from its suppliers, as they were under pressure from higher fertiliser, energy and fuel costs.“I do believe it will create inflation,” he said, adding that the pace of cost increases was volatile and quite different across the various commodities.Leighton also warned of “temporary shortages’” at petrol stations, as supplies are squeezed by the conflict in the Middle East, with the RAC reporting on Friday that the average price of unleaded petrol in the UK had risen to 150p a litre.Leighton accused the government of benefiting from £3bn of income from fuel duties as prices rose and said it should ease these duties or support farmers on energy or other costs.
“The government has to stand up and start doing stuff that helps people,” he said.He added that tax from fuel duty should be redistributed for “supporting farmers in some shape or form”.Leighton, who returned to try to revive Asda 20 years after his first executive stint at the supermarket chain, said consumer confidence, which it measures every week through surveys, was “clearly going down” as a result of the conflict.The Asda boss’s comments on inflation come after Simon Wolfson, the chief executive of the fashion and homewares retailer Next, suggested that clothing prices could rise by 4% to 10% if conflict in the Middle East extends into the autumn and factories are hit by higher fuel and fabric costs.Lord Wolfson said Next had so far seen little disruption to its supply chain and did not expect prices to rise at all until the summer at the earliest.
Daniel Ervér, the chief executive of the Swedish fashion chain H&M, has also said a prolonged conflict could have a significant impact on consumer spending and cause inflation,The Asda chair said the company’s George clothing and homewares business was also not disrupted but shipping costs had increased,He made the comments as he revealed underlying profits at the supermarket dived by a third to £764m last year as non-fuel sales slid 3,3% to £21bn,Sales have gone backwards, despite an effort to win over shoppers with price cuts and refurbished stores.
Asda notched up its first month of underlying sales growth in stores in almost two years in March, after it finally resolved IT problems linked to a switch away from services provided by its former owner Walmart.Leighton conceded that the chain’s online grocery sales continued to fall as a result of a “clunky” website.He said the struggling retailer was “edging forwards” and expected to improve its website in the next three or four months and return to profit “soon”.He said he now had his full leadership team in place and expected eventually to pick a chief executive from the group.“We have good momentum in the business,” he said, adding that he still believed it would take three to five years to bring about a turnaround.
“These things don’t turn around overnight.”Asda, the UK’s third largest grocery chain, which has 579 supermarkets, 517 Express convenience stores and 29 Asda Living general merchandise and fashion outlets, is on track to be overtaken by its fast-growing rival Aldi.Asda has been struggling with debts and IT problems since a highly leveraged £6.8bn takeover in 2020 by the billionaire Issa brothers and the private equity firm TDR Capital.TDR now controls the group after buying out one of the brothers, Zuber Issa, while Mohsin Issa retains a 22.
5% stake.On Friday, Asda said net debt had fallen by £500m in the past year to £3.1bn and it had ended the year with £1.3bn in cash, which Leighton said gave the group “great optionality”.Asda has sold off and leased back stores and warehouses in order to cut debts and to fund price cuts in an attempt to win back shoppers.
Clive Black, a retail analyst at Shore Capital, said Asda’s return to sales growth since the year end was “a very welcome change”.“Asda will be a more stable player [this year] and so not a source of such easy share gain for the rest of the trade, in a competitive but, to us, still rational sector.”Responding to Leighton’s comments, a government spokesperson said: “We have the right economic plan for a more volatile world, taking a responsible approach to supporting working people in the national interest.“We’re taking £150 off energy bills, the fuel duty cut is frozen until September and we’re providing targeted support for those facing higher heating oil costs.“We’re also monitoring impacts on farmers, including fertiliser and red diesel costs, acting to protect people from unfair price rises if they occur and working to bring down food prices at the till.
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‘It feels like they’re pulling figures out of the sky’: UK pet owners welcome crackdown on vet fees
The UK’s competition watchdog has ordered vets to cap written prescription fees at £21, and practices will have to publish price lists in a crackdown on rising fees.The Competition and Markets Authority also said a costcomparison website would be introduced to increase competition and drive down costs.These are just some of the measures due to come into force later this year.The Guardian spoke to pet owners in the UK about their experiences with vet bills. Many felt prices had increased so much that they were becoming difficult to afford
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Hundreds of licences granted for new oil and gas projects in the North Sea under the Conservatives have so far produced only 36 days’ worth of gas, according to analysis.Research by the energy consultancy Voar and the campaign group Uplift found that between 2010 and 2024, the government handed out hundreds of new North Sea oil and gas licences in seven licensing rounds.This led to 20 new and relicensed fields that have the potential, over their lifetime, to produce enough gas to supply the UK for only six months. To date they have produced the equivalent of 36 days of extra gas.The findings cast doubt on claims by Reform UK and the Conservatives that new drilling licences in the North Sea would help to reduce energy bills and boost the UK’s energy security
UK ‘weeks away’ from medicine shortages if Iran war continues, experts say
Britain is “a few weeks away” from medicine shortages ranging from painkillers to cancer treatment if the Iran war continues, according to experts, while drug prices could also rise.The conflict has disrupted the supply of a myriad of crucial raw materials, including oil, gas, crop fertiliser and helium – and health essentials could be next.David Weeks, the Texas-based director of supply chain risk management at the analytics group Moody’s, said: “It’s the perfect storm. We have the conflict in the Gulf that caused the strait of Hormuz to shut down, and India is known as the pharmacy of the world. They produce a lot of the generic [off-patent] drugs and APIs [active pharmaceutical ingredients]
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Lloyds bank faces £66m court battle with car loan customers
Lloyds Banking Group is facing a court battle with 30,000 aggrieved car loan customers who are to abandon the City regulator’s official redress scheme amid fears it will shortchange consumers and favour lenders.The claims law firm Courmacs Legal is planning to file a £66m omnibus claim on behalf of borrowers who believe they were financially harmed by car loan contracts set up by Lloyds’ motor finance arm, Black Horse.The grievances are part of a much wider car loans commission scandal, in which drivers were overcharged for their loans due to unfair commission arrangements between lenders and car dealers.However, the omnibus case, which is expected to be filed in the coming weeks, means consumers are deciding to pre-emptively waive their rights to the Financial Conduct Authority’s (FCA) estimated £11bn compensation scheme, even before the final details are due to be set out on Monday. That is despite claims law firms such as Courmacs taking a 28% cut of any potential payout
UK government borrowing costs hit 5% as Iran war fuels bond market sell-off
UK government borrowing costs have risen above 5% amid an intensifying global bond market sell-off fuelled by the Iran war.The yield – or interest rate – on 10-year debt hit its highest level since the 2008 financial crisis, rising 13 basis points to 5.081%, as investors acted on concerns about the economic fallout from the conflict.Borrowing costs also rose for the US and eurozone governments, underscoring growing turbulence in the global financial system after Donald Trump’s extension of a deadline for a peace deal failed to soothe jittery investors.Financial markets worldwide slumped on Friday, extending falls seen since the outbreak of the war, with losses in London and across major US and EU trading hubs
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