City news: Supermarkets, Amazon, Booker Group and Melrose
SUPERMARKET shares plunged yesterday amid fears that accelerating food deflation and a new price war led by Asda could dent profits.
Tesco lost eight per cent of its value
Tesco and Morrisons lost 8 and 7 per cent of their value respectively, while Sainsbury’s was down nearly 4 per cent after City broker HSBC suggested Asda was preparing to launch a big price-cutting campaign.
Asda, owned by US retail giant Walmart, is preparing to replace chief executive Andy Clarke with its China boss Sean Clarke.
HSBC said: “Asda may be about to reposition on price, bringing down sector profits.”
A new price war led by Asda could dent profits for supermarkets
Amazon's 1,000 jobs
AMAZON has stepped up its expansion drive in Britain with plans to recruit 1,000 more workers this year.
The new recruits build on the 2,500 additions earlier this year across head office, research and development centres, customer services and distribution bases, taking its full-time UK workers to over 15,500. T
he online giant is beefing up its ultra-fast delivery arm Prime Now.
Amazon’s Doug Gurr said: “We are hiring software engineers, computer programmers and corporate managers, to operations managers, engineers and service technicians.”
Amazon plans to recruit 1,000 more workers this year
Ciggy display ban hits
A BAN on displaying tobacco products proved a drag on purchases at cash and carry firm Booker Group.
The FTSE 250 firm saw tobacco sales drop 7.7 per cent in the 12 weeks to June 17, while non-tobacco was down 0.7 per cent due to food price deflation.
But overall sales were up 10 per cent following its acquisition of convenience store chains Budgens and Londis.
Shares rose 2p to 166½p as Booker chief executive Charles Wilson said the group had a “solid quarter”.
Booker Group saw tobacco sales drop 7.7 per cent in the 12 weeks to June 17
It’s aircon for Melrose
INDUSTRIAL turnaround specialist Melrose has agreed to buy US ventilation and security products group Nortek in a £2.15billion deal.
Melrose has been looking for acquisitions after selling its utility metering for £3.3billion last year to Honeywell International.
It will issue shares worth £1.6billion and new debt of £600million.
Melrose’s Simon Peckham said: “Nortek is a quality manufacturing business, with strong brands and market positions.”
Melrose jumped 187¾p to 597½p.