BUSINESS LIVE: Wage growth slows; IDS boosted by election deliveries; Frasers profits soar

Pernod Ricard is to abandon wine brands including Jacob’s Creek to focus on spirits.

The drinks giant will sell parts of its wine portfolio to the owners of Australia’s Accolade Wines, ditching names such as Stoneleigh and Campo Viejo, and other wines made in Australia, New Zealand and Spain.

Retail guru Mary Portas has backed opposition to fast fashion giant Shein’s proposed UK stock market listing.

Known as “Mary, Queen of Shops” for her TV show, she joined the launch of the “Say No to Shein” campaign calling on the London Stock Exchange to block the Chinese retailer’s £50bn flotation.

She said: ‘This is a company with allegations of unethical business practices, modern slavery and breaching labour laws. Surely we are better than this?’

Royal Mail has seen sales boosted by general election postage and stamp price increases despite delivering fewer letters in recent months, its parent company has revealed.

International Distribution Services (IDS) also said it was urging shareholders to accept the takeover offer from Czech billionaire Daniel Kretinsky.

The postal service made £2bn in revenue in the three months to June, up from £1.8bn a year earlier.

The total number of parcels delivered increased by 11 percent to 315 million compared to the previous year.

However, the volume of addressed letters (which excludes election mail) decreased by 4% compared to the previous year.

But total letter revenue rose 11 per cent, boosted by millions of ballot cards, postal votes and candidate mail during the UK general election campaign.

IDS said the jump was also driven by rising prices, with the cost of some first- and second-class stamps rising in April.

Across the group, which also includes European parcel company GLS, revenue rose 8 per cent to £3.3bn in the latest quarter.

Frasers’ profits rose 13.1 per cent in the year to April 28, with the Sports Direct owner forecasting further growth in its new financial year as it benefits from a plan to move the group upmarket.

Frasers, which is listed on the FTSE 100 index and controlled by founder Mike Ashley, is pursuing what it calls a “lift strategy” with investments in flagship stores and online operations, and strengthening ties with brands including Nike, Adidas and The North Face. Its shares are up 10 percent year-on-year.

The group’s brands also include House of Fraser, Flannels, USC and Jack Wills, and it holds strategic equity stakes in a number of other retailers including Hugo Boss, ASOS, Boohoo, Currys and AO World.

Frasers posted an adjusted pre-tax profit of £544.8m, at the top end of its guidance range of £500m to £55m and up from £478m in 2022/23.

“Our successful uplift strategy is driving our strong financial performance, with strategic brand relationships giving us greater access to products from across the Frasers Group,” he said.

A profit of between £575m and £625m was forecast for its new financial year, a year with Euro 2024 behind us and the Paris Olympics approaching.

“We remain confident that our strategy will drive continued strong performance, and we expect significant synergies from both our automation program and acquisition integration,” Frasers added.

The pound rose above $1.30 for the first time in a year yesterday after higher-than-expected inflation figures dented hopes for interest rate cuts.

It hit 1.19 euros against the euro, its highest level in almost two years, giving a boost to British tourists.

Meanwhile, markets were caught up in the path of interest rates on the other side of the Atlantic, where hopes of a cut by the US Federal Reserve are growing.

This has sent gold prices to $2,483 an ounce, a new all-time high.

Luke Bartholomew, Deputy Chief Economist at Abrdn:

‘Today’s Bank of England labour market report brought no unpleasant surprises, as wage growth continued to slow in line with expectations.

‘Household spending should continue to be supported by wage growth well above inflation.

‘But the double edge of this sword is that wage growth is still well above a level that the Bank would consider consistent with its 2% inflation target. Policymakers therefore need to be confident that wage growth will slow further before embarking on rate cuts.

‘Given the recent mixed data, if the BoE plans to cut rates in August (something we still expect), then the market could benefit from some guidance in this direction from the Bank’s top policymakers very soon.’

Hetal Mehta, director of economic research at St. James’s Place:

‘There are no major surprises in today’s labor market data, the tight labor market remained relatively stable.

‘The slight slowdown in wage growth will be welcomed by the Bank of England after yesterday’s disappointing service sector inflation.

‘There are still some key data to be released before the August Monetary Policy Report, but the decision is very well balanced.’

Wages excluding bonuses rose 5.7 percent in the three months to the end of May, in line with forecasts and below the 6 percent rise, data from the Office for National Statistics show.

The Bank of England has been keeping a close eye on wage growth as it considers the timing of its first interest rate cut. Economists say the BoE could now delay its first cut until September as wage growth remains well above the 2% consumer price inflation rate.