Poundland sales hit after ships bringing in stock are delayed by Red Sea Houthi rebels
SALES at Poundland have been hit because the ships bringing the retailer’s summer lines are being delayed by Red Sea Houthi rebels.
The discount retailer yesterday posted a 6.9 per cent slide in sales over the last three months, partly caused by supply chain disruptions.
Poundland says it has been hampered by Houthi rebels, who claim they are protesting against Israel’s actions in the Gaza Strip and are attacking vessels in the Red Sea.
Around 80 per cent of container ships that typically use the Suez Canal have re-routed around southern Africa via the Cape of Good Hope.
The diversion adds 6,000 nautical miles and around three weeks to delivery times.
As a result, retailers who rely on products imported from Asia have been hit by considerable delays and disruption.
Among them is sofa retailer DFS, which recently issued a second profit warning after up to £14million worth of customer orders were delayed by the disruption.
PEPCO, Poundland’s owner, said it hoped availability issues would ease in the coming months “as we mitigate the Red Sea impact by shipping product earlier and channelling stock through different shipping routes.”
However, the problems in the supply chain could now worsen further as vessels have been hit by severe weather conditions near the Cape of Good Hope.
Waves as big as ten metres high have been logged, according to marine weather maps, halting ships completely.
Fabrice Maille, global head of shipping and agriculture at London Stock Exchange Group, said: “We have a complete stop at the Cape of Good Hope for container ships — east and west.
“There is no significant change in Red Sea traffic so far, but several container ships have made turnarounds and/or are waiting off the coast of Durban.”
‘GROWTH WILL LOWER MORTGAGES’
LOWER mortgage rates would be one of the biggest boosts for household finances after the economy returned to growth in May, the Government said yesterday.
Sir Keir Starmer blamed high mortgages on the economic instability caused by Liz Truss’s mini-budget.
The Prime Minister said: “Economic stability is the first step when it comes to growth of our economy.
“We need that stability in order to ensure that we can bring mortgages down. They are punishing people.”
The Prime Minister added that there were too many people “on dual incomes who can’t afford the mortgage”.
He also claimed that stabilising the economy was the key to attracting investment into the UK.
He said: “That is the single biggest factor preventing investment into our country.”
It came as official figures showed a 0.4 per cent rise in economic growth in May, beating expectations of 0.2 per cent and much stronger than the zero growth in April.
The growth was helped by spending in pubs, restaurants and hairdressers and a bounce back in construction.
The news sent Sterling to its highest level against the dollar in almost a year at $1.29.
Mortgages are priced off the predicted Bank of England base rate.
Traders think there is less than a 50 per cent chance the rate will be cut in August from 5.25 per cent.
AMAZON ALERT
AMAZON was warned yesterday to take “swift and comprehensive action” to improve its treatment of suppliers by the UK’s grocery regulator.
The Groceries Code Adjudicator’s annual survey found less than half of respondents believed the online giant consistently or mostly complied with a code of conduct.
The GCA said it would “not hesitate” to launch a formal probe to ensure it was treating suppliers fairly and lawfully.
Amazon said: “We’re disappointed by the results and committed to improving them.”
RECRUITMENT firm HAYS is cutting its own workforce by 15 per cent as the job market cools. Hays described conditions as “challenging” and said that its fees fell by 18 per cent in June as companies took longer to make hiring decisions.
CARPET DUST-UP
STRUGGLING retailer Carpetright has put itself up for sale in a move that puts hundreds of stores and thousands of jobs at risk.
The chain, which has 300 shops and 3,000 workers, has hired advisers at PWC to find a rescue buyer after failing to arrest sliding sales.
A sale will likely result in some form of restructuring, such as a company voluntary arrangement or pre-pack administration, according to The Times.
The retailer was taken off the stock market in 2019 by its biggest investor, Meditor.
JET2 FARE RISE FOR HOL BRITS
BUDGET airline JET2 has said there will be “modest” price rises for customers who still want to book summer holidays.
The firm, which flies from 12 UK airports to 64 destinations in Europe, has added 11 per cent to cover rising costs over the past year — but is determined to stay competitive.
A spokesman said: “Passengers are currently booking much closer to departure and, therefore, pricing for our flight-only and package holiday products must remain attractive.”
Boss Steve Heapy added: “We’re confident customers will continue to travel with us from our rainy island to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities”,
Charging higher air fares helped Jet2’s annual profits jump 43 per cent to £529million.
Sales rose 24 per cent to £6.2billion. Jet2 carried a record 17.7 million in the year to the end of March, 9 per cent up.
AIRPORT FEE CUT
HEATHROW has been forced to cut the amount it charges airlines after a years-long dispute with British Airways and Virgin Atlantic.
The airport had charged as much as £40 per passenger in landing fees to help recoup some of its losses during the pandemic, prompting a row with airlines which passed the costs on to passengers.
The Civil Aviation Authority yesterday decreased the cap in fees to £23.73 per passenger next year, and £23.71 in 2026.