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Fresh full lockdown could cost Next nearly £60m in lost sales

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fresh full lockdown could cost next nearly 60m in lost sales

High Street stalwart Next has warned that a fresh full two-week lockdown across England, Northern Ireland and Scotland would cost it nearly £60million in lost sales. 

The retailer said that its in-store sales in the last three months were around half of levels seen since last year, with fears already mounting about the potential impact of Wales’ two-week circuit-beaker shutdown imposed last week.

Next also said: ‘We have found no evidence of the virus being transmitted in our stores, nor are we aware of any studies that suggest clothing and homeware retail presents a significant risk of infection.’ 

Last month, the boss of Next, Lord Wolfson, said there was a clear threat to thousands of jobs in retail because lockdown had triggered a seismic shift to online shopping. 

Impact: High-street stalwart Next has warned that a fresh full two-week lockdown across England, Scotland, and Wales would cost it nearly £60million in lost sales

Impact: High-street stalwart Next has warned that a fresh full two-week lockdown across England, Scotland, and Wales would cost it nearly £60million in lost sales

Impact: High-street stalwart Next has warned that a fresh full two-week lockdown across England, Scotland, and Wales would cost it nearly £60million in lost sales

But, amid the doom and gloom looming over potential further shutdowns, Next still upped its full-year profit forecast for the third time this year.

The chain now expects its pre-tax profit for the year to hit £365million, which is £65million more than first expected, with net debt forecast to fall by £487million to £625million. 

Online sales during the summer were 23 per cent higher than they were a year ago with shopper demand for homeware lines and children’s clothes remaining high. 

With many still working from home and formal events off the cards, sales of suits and party clothes remain down on levels seen last year.

Next said: ‘Online sales remain strong, both in the UK and overseas. In retail, out-of-town retail parks continue to perform better than high streets and shopping centres.’

Total sales in the three months to 24 October rose by 1.4 per cent, or 2.8 per cent, when interest from consumer credit is included. 

The number of products sold with a markdown dropped by 12.3 per cent on a year ago, but Next explained this was due to fewer customers in stores and a focus in its warehouses on full priced goods. 

Sales outperformed particularly strongly in the final two weeks of August, as the Government was encouraging workers back to offices and before the ‘rule of six’ was introduced.

Risks: Lord Wolfson, the boss of Next, has warned that thousands of retail jobs are at risk as a result of the pandemic

Risks: Lord Wolfson, the boss of Next, has warned that thousands of retail jobs are at risk as a result of the pandemic

Risks: Lord Wolfson, the boss of Next, has warned that thousands of retail jobs are at risk as a result of the pandemic

They fell sharply in September, but regained momentum in October and beat figures from a year earlier, the retailer said.

Looking ahead to Christmas, Next’s bosses said sales could fall by 8 per cent based on their ‘central scenario’, which includes further lockdowns, customers avoiding busy stores and increased self-isolation.

An alternative ‘upside’ scenario predicts a flat period of sales, compared with last Christmas, where ‘busier stores prove no further deterrent to retail shopping’, and there are no further lockdowns.

The ‘downside’ scenario would see a two-week lockdown being imposed triggering an expected 20 per cent drop in sales, Next said.

It added: ‘The biggest single unknown is whether England, Scotland and Northern Ireland will follow Wales’s decision to shut non-essential retail shops.

‘A two-week lockdown in England, Scotland and Northern Ireland in November would reduce retail full-price sales by around £57 million depending on timing.’

Richard Hunter, head of markets at Interactive Investor, said: ‘Christmas has not quite come early for Next, but the signs are promising ahead of the important retail season.’

He said the retailer continued to make progress, with a major reduction in net debt and an upgraded profit forecast which was ‘a further sign of recovery.’

‘Given the fact that the pandemic has taken the ultimate toll on some of its competitors, for Next to be booking a profit of this size is testament to its enduring appeal,’ he added.

Meanwhile, Russ Mould, investment director at AJ bell, remained upbeat about Next’s prospects.

Mould said: ‘What you can be pretty sure of is that Next will be prepared this time round and at least investors are getting a detailed read on how sales might perform under different scenarios.

‘The strength of Next’s brand, proposition, balance sheet and infrastructure should also set it up to be a retail survivor which can thrive in a recovery.’

Shares in FTSE 100-listed Next are up 2.76 per cent or 168p to 6,258p this morning. 

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Bitcoin price: Why has it fallen 12.5% in a day?

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Bitcoin’s seemingly unstoppable surge towards an all-time high and a $20,000 price tag went into reverse as holders tried to cash in their gains for a profit.

The price of the cryptocurrency plummeted more than 12 per cent over the last 24 hours from a peak of $19,374 a coin on Wednesday to $16,858, according to figures from Coindesk.

Fellow cryptocurrencies like ethereum and ripple have also plunged in price over the last 24 hours, while bitcoin’s fall was its sharpest since the start of September.

Bitcoin plunged by more than 12% in the last 24 hours just as it looked set to hit an all-time high

Bitcoin plunged by more than 12% in the last 24 hours just as it looked set to hit an all-time high

Bitcoin plunged by more than 12% in the last 24 hours just as it looked set to hit an all-time high

It had looked set to break its all-time high of around $19,500, set in December 2017, driven by a series of good news stories, endorsements from institutional investors and continued money printing by central banks. 

The fact the price of the cryptocurrency had risen from just under $8,000 in January to the verge of $20,000 a coin without serious interest from casual investors had led some to argue the boom this time around was here to stay for a while yet.

This is Money has previously reported on the factors driving the cryptocurrency’s rise, including endorsements by the likes of PayPal and JP Morgan, which said it could possibly compete with gold as an alternative store of value. 

However, this positivity has been somewhat dented by the sudden plunge in the bitcoin price, which appeared to be the result of a massive sell-off by high net worth holders of the cryptocurrency.

The sharp drop is yet more proof of the cryptocurrency’s volatility and why This is Money warns casual investors looking to buy into it that they need to do their research and be careful beforehand.

According to bitcoin analysts Glassnode, the number of investors holding at least 1,000 bitcoin reached an all-time high this week, with the concentration of large sums of the cryptocurrency in the hands of a small number of investors giving them a significant influence on the market.

Another analyst, Ki Young Ju, wrote on the social media platform Twitter that these holders of large sums of bitcoin had sold off their holdings, causing the price to fall.

Bitcoin has been on a tear since the end of the summer and is still massively up on where it was at the start of this year

Bitcoin has been on a tear since the end of the summer and is still massively up on where it was at the start of this year

Bitcoin has been on a tear since the end of the summer and is still massively up on where it was at the start of this year 

And one of the most well-known cryptocurrency exchanges, Coinbase, said traders were being hit by connectivity issues as they tried to make purchases or sell-off their holdings. The San Francisco-based exchange said it had found and fixed the problem.

Responding to the sudden drop, Glen Goodman, the author of the book The Crypto Trader, said: ‘When Bitcoin approached $20,000 in 2017, more people were queueing up to buy it than ever before.

‘Many of those buyers have been holding their investment – in varying degrees of misery – ever since.

‘The pressure now, not least from their long-suffering partners, is to sell and finally break even on their investments.

‘With their fingers hovering over the “sell” button, when the price started retreating slowly down to $19,000 and then $18,500, it led to a flurry of panic sellers grabbing their chance to break even, and those sellers caused the price to crash fast.’

However, he still said the long-term picture for the cryptocurrency was ‘very positive’, despite the possibility of ‘a lot more price volatility in the near future’.

He added: ‘This appears so far to be a healthy correction in a big bull market. In my opinion, only a fall to $10,000 would put that bullish narrative in question.’

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Just FOUR councils applied to use a new hedgehog warning road sign

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just four councils applied to use a new hedgehog warning road sign

A new traffic sign launched by the Department for Transport for councils to display on roads with high populations of hedgehogs, badgers, otters and other small animals has received a prickly response with just one per cent of authorities applying to use it.

The sign, unveiled last year, displays one of the spiky creatures in a red warning triangle and was designed to help preserve dwindling hedgehog numbers and reduce the number of people injured in collisions involving animals.

However, This is Money can exclusively reveal that all four councils who did apply to erect the signs were denied permission because they did not provide enough evidence to the DfT that they have a high concentration of the animals in their areas.

Prickly reaction: Just four councils have applied to the Department for Transport to use a hedgehog warning sign on roads that put the animals and drivers and riders at risk

Prickly reaction: Just four councils have applied to the Department for Transport to use a hedgehog warning sign on roads that put the animals and drivers and riders at risk

Prickly reaction: Just four councils have applied to the Department for Transport to use a hedgehog warning sign on roads that put the animals and drivers and riders at risk

Of the 343 councils that could have requested to display the signs on their roads, only Newcastle City Council, Middlesbrough Council, Surrey County Council and East Riding of Yorkshire Council applied, according to an Freedom of Information request by the AA.

All four subsequently had their applications denied, the DfT confirmed.

The department clarified that all four had ‘failed to evidence any concentrations of small animals habitually in the road, or provide any accident data’.

Councils and animal conservationists will query how they can feasibly provide evidence of hedgehogs being at risk on their roads. 

‘Rejection of the applications based on failing to provide adequate evidence conjures up all sorts of weird scenarios: council officers counting the bodies or sending off the evidence in jiffy bags,’ said an AA spokesman. 

He added: ‘Common sense suggests that, if cash-strapped councils are prepared to fork out the money for the signs and the manpower to erect them, there is probably the local need for them.’

The signs are to warn of small animals, including hedgehogs, badgers, otters and squirrels. Hedgehogs in particular are now on the Red List of endangered UK species

The signs are to warn of small animals, including hedgehogs, badgers, otters and squirrels. Hedgehogs in particular are now on the Red List of endangered UK species

The signs are to warn of small animals, including hedgehogs, badgers, otters and squirrels. Hedgehogs in particular are now on the Red List of endangered UK species

The decision to deny these authorities will has left the British Hedgehog Preservation Society bristling in frustration.

Hedgehog numbers have plummeted in recent years, halving in volume since 2000.

The animals now find themselves on the Red List of endangered UK species.  

Fay Vass, chief executive at the British Hedgehog Preservation Society, told This is Money: ‘We are disappointed that more authorities aren’t applying for the small mammal signs that feature a hedgehog and that the DfT are rejecting those that do. 

‘We know from interaction with the public that these signs would be very welcome in many areas where hedgehog road casualty counts are high. 

‘In the meantime, we produce a sign that can be purchased for display on private property, but we very much hope that the official signs will soon begin to be erected in the spirit they were intended. 

‘They are important to warn people that small animals might be on the road in that area, not only for the sake of the animal, but to help reduce risk for drivers too.’

The AA asked how councils could feasibly provide evidence that they have roads with high concentrations of small animals

The AA asked how councils could feasibly provide evidence that they have roads with high concentrations of small animals

The AA asked how councils could feasibly provide evidence that they have roads with high concentrations of small animals

The new traffic warning sign was launched in 2019 by former transport secretary Chris Grayling, including a bespoke announcement and plenty of fanfare around the sign. 

It was unveiled as the DfT said hundreds of people are injured every year in collisions involving animals in the road, claiming that 629 people were injured in accidents involving an animal in the road (excluding horses) and 4 people were killed in 2017 alone. 

Mr Grayling called on local authorities and animal welfare groups to identify accident and wildlife hotspots where the sign should be located.  

He said: ‘The new small mammal warning sign should help to reduce the number of people killed and injured, as well as helping our precious small wild mammal population to flourish.’ 

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Marcus Bank easy-access savings rate to fall to 0.5%

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Marcus is making another cut to its easy-access account as savings providers continue to slash rates on the back of brutal cuts by National Savings & Investments.

The UK savings arm of Goldman Sachs will cut its easy-access rate from 0.7 per cent to 0.5 per cent in just over a fortnight on 11 December, just two months after it cut the rate from 1.05 per cent.

It made that September cut, its deepest ever, just days after NS&I announced it was reducing rates on its easy-access accounts to as low as 0.01 per cent, and news of the latest rate reduction comes in the same week as those cuts were introduced.

Marcus has made the second cut to its easy-access account in the last 2 months. It will pay savers just 0.5% interest from 11 December

Marcus has made the second cut to its easy-access account in the last 2 months. It will pay savers just 0.5% interest from 11 December

Marcus has made the second cut to its easy-access account in the last 2 months. It will pay savers just 0.5% interest from 11 December

First Direct and HSBC also handed savers a cut of 1.75 percentage points on its regular saver earlier this week

It means Marcus’ account, which paid as much as 1.5 per cent for a year after it was launched in September 2018, now fails to beat inflation, which rose to 0.7 per cent last month.

The bank, which took in roughly £1billion a month from savers when it launched its then market-leading account two years’ ago, previously reduced its rates to 1.45 per cent and then 1.3 and 1.2 per cent in recent months, while it also removed the account from sale to new customers in June this year.

Rate cuts elsewhere saw savers pile into the account, but those lucky who were lucky to get in have now faced a succession of cuts themselves.

The quick-fire cut in just over two weeks’ time comes after it changed its terms and conditions last October to allow it to give customers just 14 days’ notice ahead of any rate cut, where before it let them know two months’ beforehand.

It hoovered in so much cash from UK savers that it had to close its doors in June to new customers – it had raked in £21billion, making it close to breaching banking rules. 

And Marcus, whose parent bank was bailed out by the US taxpayer during the last financial crisis in 2008, is not the only provider to hand savers a succession of bad news in the last few months.

When it announced its cut from 1.05 per cent to 0.7 per cent at the end of September, the best buy easy-access stood at 1.1 per cent and five highest-paying accounts paid an average of 1 per cent, according to Savings Champion.

Today, the best buy rate has dropped to 0.7 per cent and the top five average to 0.6 per cent, while easy-access rates overall pay as little as 0.21 per cent on average, according to separate analysis from Moneyfacts.

How savings rates have slumped since Marcus’ last cut
Date  Best buy easy-access rate  Top 5 easy-access average rate 
25 September 1.1% 1% 
26 November  0.7%  0.6% 
Source: Savings Champion 

Savings banks have been inundated with money since NS&I’s announcement of its rate reductions two months’ ago, filling up their books and requiring them to slash rates as a result.

Challenger bank Paragon, which removed its 0.65 per cent paying easy-access account from sale this week, said September was its busiest ever month as deposits flooded out of NS&I ‘at an unprecedented rate’.

This was even despite the fact that many people who tried to withdraw money from NS&I had, and continue to have, problems doing so.

Paragon Bank’s savings direct, Derek Sprawling, said he anticipated billions more pounds would continue to inundate the market as savers looked for the best rates, even if those rates were much lower than they had been previously.

Saga, which has its easy-access account provided by Marcus, has also cut its rate from 0.7 per cent to 0.5 per cent, although that comes with a 0.1 percentage point bonus which expires after a year.

James Blower, an advisor to savings banks and founder of The Savings Guru, said savings rates were ‘collapsing generally as the NS&I cuts take effect.’

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