British retail sales rise and recession fears die down
Plus, Revolut wooed by UK gov, Starbucks' new CEO's eye watering compensation package revealed and how to take your team on a workcation
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Business Agenda
A summary of the most important business news
1. British retail sales rose by 0.5 per cent in July, driven by Euro 2024 excitement and summer discounts, according to ONS figures. High street retailers saw strong sales in football-related items, while online sales hit their highest percentage since February 2022. Despite these gains, sectors like clothing and homeware continued to struggle, and the overall growth reflected a mixed outlook amid ongoing inflation and wage concerns. You can read more here.
2. Last week’s mass sell-off wiped billions off stocks worldwide, but fears of an impending recession have faded as global stock markets rose yesterday. Positive US retail sales data and strong results from Walmart eased recession fears, while the UK posted another quarter of economic growth. The FTSE 100 rose 0.8 per cent, driven by a strong services sector, and US stocks, including the S&P 500, saw significant gains. You can read more here.
3. Revolut has hit the headlines twice today. First, it has cemented its position as Europe’s most valuable private technology company after securing a $45bn (£34.9bn) valuation in a share sale by employees. Second, the company is reportedly being wooed by the UK government to list in London after rumours that it prefers New York for its IPO. You can read more here.
4. There are concerns that plans for a large-scale housebuilding programme focused on creating new towns may not be enough to meet the government’s target of 1.5 million new homes over the next five years. Analysis by the Centre for Cities shows that similar postwar new town initiatives contributed only 3.3 per cent of all new housing over 40 years. The study highlights the challenge of relying on new towns alone to meet the ambitious annual target of 307,000 homes. You can read more from The Guardian here.
5. Starbucks’s new CEO, Brian Niccol, will receive a compensation package potentially exceeding $100m, with the flexibility to work remotely from California. Niccol, who was poached from Chipotle, will start on September 9 with a $10m bonus and substantial equity grants, despite the company’s recent policy requiring most corporate employees to work from the office. Under his leadership, Chipotle saw significant revenue and stock price growth. Starbucks shares rose 24.5 per cent following the announcement of his appointment. You can read more here.
The story behind Crittall Windows
Crittall. The beautiful steel windows you may know by that name are made by a company whose roots go back to 1849. Crittall is the world’s oldest and largest steel window manufacturing company and has a global legacy. Based in Witham, Essex, the company is one of the area’s most prolific employers.
Its products have been installed in the Houses of Parliament, London’s Adelaide House, The Lyceum Theatre and the Titanic. But five years ago it was in a torrid state. The company was siloed, there was no collaboration and it was losing money. In a world of tightening regulations around energy efficiency, an urgent turnaround was required.
Enter Russell Ager. His father was a lifer with the company, making handles and window fittings in his role as a design draughtsman. Ager began his working life doing material testing in a lab. After a hiatus at Velfac, the sister company of roof window brand Velux, he worked his way up the business, rising to the chief executive role in January 2019.
His experience of the company was his biggest asset. “I could see a future for the business,” he says. “We had old machinery. We had old technology. We had outdated products. It was quite daunting to think that we’ve got to completely change everything and bring in new ways of working. It was a hell of a challenge, but I could just see that there was a way of changing it.”
Some of the old machinery he was talking about dated by to the 1920s. With a handful of people who had knowledge of how to use it. What about the cultural challenge of telling his team that the machines they were using were being upgraded? Ager said that he was surprised at how much buy-in he got.
He says: “Taking them along on the journey was the most important thing. I stood up and presented to everybody exactly what we’re doing, why we’re doing it, what the vision is, where we’re going, and said that they’re part of that journey. I wanted to make sure that everybody was very clear about the purpose and vision of the business. They could see where we were going and, more importantly, their part in it.”
This is a snippet from our interview with Russell Ager. You can read the full story here.
Business Question
Guess the year
- Cyprus, the Czech Republic, Estonia, Poland and Slovenia join the EU
- M&S rejects a takeover bid by retail tycoon Philip Green
- Peppa Pig premieres
- The UK government unveils plans to ban smoking in most enclosed public areas
- The Office Group, On the Beach and THG are founded
The answer can be found at the bottom of the page.
Business Thinker
Deep dives on business and leadership
🌴 How to take your team on a workcation
Mahdi Sharif of Cambridge-based work assistant AI company Humble just took his team to Spain for a week. As a team that mostly works remotely, Mahdi says it can be easy to overlook the importance of face-to-face interactions, but he’s found “in-person moments are more than just nice-to-haves; they are essential for building strong relationships, fostering collaboration, and reinforcing company culture”. He shares his top tips for taking your team away on a working holiday.
⛔ Goldman Sachs’ CEO was rejected twice by the firm. He’s since led it to over $50bn in revenue
It’s tougher to land a job at Goldman Sachs than to get into Harvard. The bank hired less than 1 per cent of the 300,000 applicants for entry-level positions last year. Its CEO was rejected twice by Goldman before joining in 1999. Under Solomon’s leadership, Goldman has doubled its market cap and significantly increased its revenues, all while maintaining a focus on building trust and excellence with its clients.
🐛➡🦋 How to set transformation targets that actually drive change
Eleven out of 12 top-down target transformations fail to achieve their goals, with only a fraction of theoretically “executed” or “realised” improvements translating to the corporate ledger. In this article, Bain & Co partner Michael Mankins summarises research findings that show what actions make the difference between success and failure in setting and achieving transformation targets. The key practices are: changing leadership’s mindset around targets; specifying targets in absolute, not relative, terms; using the company’s budget or operating plan to monitor success; and setting more than cost-based targets.
Business Quote
Inspiration from leaders
“You may have to fight a battle more than once in order to win it.”
– Margaret Thatcher
And finally…
After a summer of sport with Euro 2024 and the Olympics, the Premier League season starts tonight with Manchester United v Fulham at 8pm.
You can join in the fun this year by joining Business Leader’s Fantasy Premier League mini-league. You can join the league by clicking here.
All you need to do is pick a team, ideally by 6.30pm tonight to make sure that you enter the league in time. The winner will get a shout-out in the newsletter and, of course, all the glory… Good luck everyone!
The answer to today’s Business Question is 2004
