Asda Faces £1.2 Billion Back Pay Bill in Equal Pay Dispute:
Tens of thousands of Asda shop workers, predominantly female, stand to receive an average of £20,000 each in back pay, totaling a potential £1.2 billion payout for the supermarket giant. This follows a landmark ruling by an employment tribunal in Manchester, which found that the majority of shop floor roles hold equal value to higher-paid positions in Asda’s warehouses, primarily staffed by men. The legal battle, initiated in 2014, alleges discriminatory pay practices based on gender. Although the tribunal excluded two specific shop floor roles, covering 11,000 claimants, the remaining 49,000 workers have successfully cleared two of the three stages in their equal pay claim. This represents a significant victory in what is considered the largest private sector equal pay claim in history. Asda now faces the burden of proving that the pay disparity is justified by factors other than gender, such as market forces influencing warehouse worker wages. This legal wrangling is anticipated to continue until 2026 or 2027. Asda vehemently denies any discriminatory pay practices. Walmart, holding a 10% stake in Asda, has an indemnity agreement in place to cover a portion of the potential payout, stemming from a previous attempt to sell Asda to private equity. This case follows a similar victory for Next employees, though that retailer is currently appealing the decision. Leigh Day, the law firm representing the Asda workers, is also pursuing similar claims against other major UK supermarkets including Tesco, Sainsbury’s, Morrisons, and the Co-op.
Mango Expands UK Presence:
Spanish fashion retailer Mango is significantly increasing its investment in the UK, planning to open 20 new stores in 2024. The UK is a prioritized market for Mango’s growth strategy, with six of the new stores planned for London, including a flagship location on Oxford Street. This expansion builds upon Mango’s existing network of 70 stores across the country. The brand’s commitment to the UK market is further underscored by a recent collaboration with Victoria Beckham.
Speedy Hire Issues Profit Warning:
Tool hire company Speedy Hire has issued a profit warning, sending its share price plummeting to an all-time low. The company attributes the downturn to the wider economic slowdown, citing delayed customer orders as a key factor. Delays in National Rail projects have also impacted Speedy Hire’s performance, although the company views these projects as significant future opportunities. Speedy Hire plans to manage costs and adjust investment decisions in response to the current economic climate. Despite the short-term challenges, the company anticipates benefiting from government infrastructure spending commitments in the long run.
Banking IT Outages Cause Disruptions:
Lloyds Bank and Halifax experienced a significant IT outage, disrupting online access and payment processing for customers. This incident occurred shortly after Lloyds announced plans to close 136 branches as part of a shift towards online banking. Separately, Barclays also faced technical issues affecting customer access to funds and payment services.
Thames Water Funding Dispute:
Thames Water’s financial struggles are under scrutiny in the High Court. The company is seeking approval for £3 billion in funding from bondholders at a high interest rate of 9.75% to avoid collapse. Junior bondholders oppose the move, and a Liberal Democrat MP argues that placing Thames Water into special administration would be a more equitable solution. Concerns have been raised that the proposed funding arrangement could worsen the company’s debt burden.
UK Business Growth Reaches Record High:
Despite economic headwinds, the UK has seen a record number of businesses – 5.6 million – currently operating. A new report indicates that 846,000 businesses were launched in 2024, primarily in sectors such as online retail, property, takeaways, and consultancy.
Admiral Taverns Reports Increased Profits:
Admiral Taverns, a major UK pub company operating around 1,400 sites, has reported stronger-than-expected sales and increased profits. Despite pressures on consumer spending, the company’s underlying adjusted profits rose to £59.7 million for the year ending May 26, 2024, exceeding the previous year’s figure. Admiral Taverns recently acquired additional pubs from Fuller’s and Marston’s and is actively seeking further expansion opportunities.
