Tesco turns?
Sales rebound
Is Tesco's nightmare coming to an end? The latest sales figures for the grocery sector contained bitter sweet news for the supermarket giant. In the 12 weeks to 1 February, Tesco grew its sales by 0.3 per cent, according to research by Kantar Worldpanel, its first positive growth since January 2014. But looking at the wider picture, Tesco still saw its market share dip by 0.2 per cent to 29 per cent as the discounters Aldi and Lidl continued to gain a bigger share of our shopping, although their stellar growth rates are slowing a little as they come up against ever tougher comparatives.
Steady state
Oil stuck
After a precipitous slump over the past six months, the price of oil could be set for a prolonged period of stasis. That is the verdict of the International Energy Agency, which this week predicted that oil prices will remain in the region of $60 for as long as two years. The IEA said that it expects the demand-supply imbalance to begin to correct itself towards the end of this year as capacity is cut from the market, but there is unlikely to be a significant pick-up in demand this year. It also predicted that there will be a temporary slowdown in output from the US shale sector but it will remain one of the biggest sources of supply growth in the coming years.
Output eases
Slowdown signs?
The UK's industrial output contracted by 0.2 per cent between November and December, driven primarily by declining output from its North Sea oil and gas fields, a situation that could accelerate should the oil price remain in the doldrums for a prolonged period. Over the quarter as a whole industrial output declined by 0.1 per cent despite the continued decent showing by the manufacturing sector. Industrial production rose by 1.4 per cent during 2014 despite declines in output for the mining, energy and utilities segments.
Pension pain
Deficits balloon
The effect of falling bond yields is spreading ever wider. Witness the huge surge in pension deficits of UK corporates over recent months which saw deficits in defined benefit pension schemes at UK private companies reach a record £367.5bn at the end of January, up 38 per cent on the £266bn collective deficit reported at the end of December. The bulk of the increase is down to liability calculations by the pension scheme trustees which have shifted due to the ultra-low bond yields. Pensions expert Ros Altman warned of a vicious circle as widening deficits prompt pension funds to buy more bonds, pushing prices ever lower.
Bridge of sighs
Greek hope
After 10 days of diametrically opposed rhetoric from the new Greek government and its paymasters in Brussels and Berlin there has been little progress on resolving the Greek situation. A summit of eurozone finance ministers scheduled for Wednesday evening may change the mood but in the run-up the Syriza-led Greek government saw its anti-bailout stance ratified by parliament while eurozone notaries such as German finance minister Wolfgang Schauble continued to dismiss the chance of providing some sort of agreed bridging finance to the Greeks to stave off imminent economic meltdown and give some breathing space to conduct negotiations over its debts.
Retail revival?
Floats pick up
This could be the first year in this decade that UK consumers feel they have more money in their pockets, a factor that may be behind the pick-up in retail sector initial public offerings. First we saw sofa and carpets specialist ScS come to the market last month, to be followed within the next couple of weeks by rival home furnishings operator DFS Furniture. And the high street could get in on the act next, with fashion retailer New Look rumoured to be considering a return to the market, 11 years after it was delisted. Meanwhile, in the discount sector, Poundland this week made a £55m offer to buy up rival 99p Stores.
