Grocery inflation drops and the Rubik’s Cube turns 50
Plus, B&M reports strong results, how to boost UK productivity and the 'uneven' distribution of AI's environmental impacts in today's Off To Lunch newsletter
MILAN, ITALY - NOVEMBER 18: A young woman handles a Rubik's Cube mechanical puzzle during the "Entraingioco" Festival at Superstudio Maxi on November 18, 2023 in Milan, Italy. (Photo by Emanuele Cremaschi/Getty Images)
This article is an online version of our Off to Lunch newsletter. Sign up to receive it straight to your inbox here.
The latest episode of our Business Leader podcast is out today and features an interview with Steve Hare, the chief executive of Sage, the biggest technology company on the stock market in the UK. The episode looks at how Sage grew from a promising business in Newcastle to a FTSE 100 giant worth more than £10bn – and how Hare has led the company since becoming chief executive in late 2018.
Here are some of our key takeaways from the episode and some quotes from Hare to go with them.
The key to growing a business outside London is developing your people:
“We work very, very hard to create the right environment so that people choose to come and work for us, and want to develop their career here. Even when they decide to move on and do something else, that alumni are very important. I want people to leave and still be Sage evangelists.”
Introverts can be successful chief executives:
“I’m naturally an introverted person. While I like people – it’s not like I’m a loner and I don’t like interacting with people – I prefer very small groups really. When I was younger, I wasn’t very good at realising the impact of how I behaved when I came under intense pressure.
“Introverts tend to go more into themselves when they come under immense pressure, whereas an extrovert goes the other way and will engage with lots of people. The way I reacted to pressure was to become a bit withdrawn. I didn’t always take people with me, whereas I think now I’m much better at that and certainly more aware of the impact that I’m having on the people around me.”
Small and medium-sized businesses in the UK (Sage’s key customers) need capital and a support network to grow into big businesses:
“We tend to be very good in the UK at having money available to back ideas at the very beginning, but once they need to scale-up and require access to more capital that can be a bit harder. The second thing, and I think this is where the US is very good, is that you also need a support ecosystem. If you’re doing something where you can network with other people who are in a similar field or period of the business journey, they can put you in touch with people who can assist you, whether that be mentors or financial assistance. That tends to create a reinforcing effect.”
Hare bounced back from losing his job as finance director of Marconi in 2002 and being told he would never work in the City again:
“I am a stubborn Yorkshireman really, that runs quite deep. I really don’t like being told that I can’t do something.”
Hare is focused on ensuring that Sage stays on top of rapidly changing markets:
“One of the most dangerous things about having experience is that you can look at something and say: ‘I’ve seen this before.’ The world is changing extremely quickly, particularly in technology. It’s really important to get input from wherever you can find it. I will often talk to younger colleagues at Sage who were born in the digital age, I want to understand how they see something, how they decide which applications they use.”
You can listen to the episode in full on Spotify here, Apple Podcasts here or Acast here.
Business Question
How many new UK companies were incorporated in 2023?
A. 770,000
B. 900,000
C. 630,000
D. 555,000
The answer can be found at the bottom of the page.
Business in Brief
Everything you need to know
1. Grocery inflation has dropped to its lowest level since September 2021, according to data from the market research company Kantar. Food inflation fell to 1.6 per cent in the four weeks to July 7, down from 2.1 per cent in the prior month. Toilet tissue, dog food and butter prices fell, while vitamins, supplements, fruits juices and deodorants saw some of the highest rises. You can read more here.
2. The population of England and Wales grew at its fastest pace in 75 years in 2023, as a rise in migration offset a decline in the birth rate. The population increased by almost 610,000 to 60.9 million in the year to mid-2023, according to data from the Office for National Statistics. Net migration was at 622,000, while the number of births was at 598,400 – the lowest in 21 years – and contributing to the smallest ‘natural change’ (births minus deaths) since 1978. You can read more here.
3. B&M has reported strong results for the first three months of the year, with revenues up by 2.4 per cent to £1.3bn. The company opened 19 new stores in the first quarter, two of which were in France, and is on track to open 45 shops this year. Like-for-like sales were down 3.5 per cent, which the company attributed to “unseasonal weather”. You can read more here and our interview with B&M founder Simon Arora here.
4. A commission made up of chief executives of some of the UK’s biggest businesses has said the government must focus on cutting commuting times and improving internet access to boost productivity. The Building Back Britain Commission includes British Land’s Simon Carter, Microsoft UK’s Clare Barclay, Haleon’s Brian McNamara and Max Taylor, the boss of Vodafone UK. Its initial report says underlying problems include housing and transport issues that lead to long commute times, an inability to reach talented workers and difficulties with access to 5G networks. You can read more here.
5. The boss of Goldman Sachs believes the capital markets and M&A activity are in the early stages of recovery. The investment bank’s profits more than doubled in the three months to the end of June to $3bn (£2.3bn), while revenues were up 16 per cent to $12.7bn. “From what we’re seeing, we are in the early innings of a capital markets and M&A recovery,” says David Solomon. You can read more here.
Business Quotes
Inspiration from leaders
“The cost of being wrong is less than the cost of doing nothing.”
– Seth Godin
Business Thinker
Ideas on the future of business and leadership
1. ? The Uneven Distribution of AI’s Environmental Impacts ?
2. ⏹️ As the Rubik’s Cube Turns 50, a Revolution Looms ⏹️
3. ? What I learnt… about winning The Apprentice ?
And finally…
With school holidays starting, football not coming home and the UK summer failing to arrive, thoughts are turning to trips abroad. Images of sun-kissed beaches, temperatures above 18C and fewer downpours have more people than ever heading abroad for holidays.
In April, The Guardian declared the staycation boom over as the cost-of-living crisis, poor weather and an increasingly saturated market hit bookings. Meanwhile, holidays abroad are forecast to hit a record high this year, with two-thirds of people saying they will visit another country, according to travel association Abta.
But The Times is doing its best to shake our conviction in heading overseas with the latest edition of its Best UK Beaches guide. It has, it claims, inspected “every stretch of sand, single and rock” – totalling 5,583 miles and 543 beaches. It ranks them on 11 points, including car parking, loos, cafes and dog-friendliness. All are rated excellent on water quality.
The guide shows off the best the UK coast has to offer. I have only been to four of the 50 but the list has made me want to go to more. Let’s see if it can inspire you too.
Read the full guide here.
The answer to today’s Business Question is B. 900,000.
