Tag: Press Release

The press release issued by PWC on 1 March 2023.

• Stores are closing at their slowest rate since 2014, with net closures also at their lowest level  in five years
• Closures now at 32 per day with 22 new outlets opening per day across Great Britain
• Retail park and leisure operators continuing to thrive

PwC has launched the latest figures for stores opening and closing across Great Britain. The research is created in association with the Local Data company. The twice yearly research tracks over 200,000 outlets in over 3,500 locations to gain a picture of the changing landscape of high streets, retail parks, shopping centres and stand alone outlets.

The latest research shows the lowest number of closures since the research began marking a positive turn for retail post-pandemic. The 2022 full-year results show a total of 11,530 chain outlets (those businesses with five or more outlets) exited GB high streets, shopping centres and retail parks – a significant drop from the 2021 figure of 17,219 outlets. Equivalent to 32 closures per day, the figure remains significantly lower than the almost 50 per day that were closing in the pandemic period. New store openings have improved with 7,903 store openings (equivalent to 22 per day) this year, they are at the highest since 2019. Net closures now sit at -10 per day, marking the lowest rate since 2016 – and just 1.7% of the total number of chain outlets, compared with the 5.7% that closed in 2021.

Retail parks remain the most resilient outlet type with a small -0.3% closure rate with shopping centres (-1.6%) also recovering at a promising rate. High Streets were slightly lower at -2.6% but all outlet types saw a significant improvement in their net closure rates.

Lisa Hooker, Industry Leader for Consumer Markets at PwC comments on the positive figures:

“It is great to see how retail and leisure operators are increasing in confidence and investing back into bricks and mortar after a few years of uncertainty across the sector. We are seeing innovative store openings including services and the use of technology that delights the consumer and appeals to the younger shopper who tells us they still love stores. While high streets are also recovering well, the need to coordinate a fragmented landlord base and others with vested interests, alongside the type of occupant, means a slightly slower recovery. Rent levels have also normalised, and with changes to the business rates due to come in April, this should also encourage new openings across many locations, adding to the impressive bounceback of retail parks, shopping centres and the growth of local entrepreneurship.”.

The variation across the regions has also narrowed – a trend first noticed in the first six months of 2022. That trend has continued to the extent that regional variations have nearly gone. This year has seen the spread of results (GB average -1.7%) have less than one percentage point between the worst performing (West Midlands at -2.3%) and the best (South East -1.3%). This is a positive turnaround for London, which was particularly hard hit by the pandemic lockdowns. It was -5.8% in both 2020 and 2021, significantly worse than any other region, but just -2.2% in 2022.

Lucy Stainton, Commercial Director for the Local Data Company who collect the research talks about the trends in the 2022 data:

“CVA and administration activity dropped in 2022, helping to drastically reduce the total number of closures across the market.  Alongside the benefits of the first full year free from restrictions, the return of office workers and tourism boosted footfall, supporting new store openings.

Shopping centres bounced back in 2022 after a turbulent period as acquisitive brands opened units across destination centres. Retail park performance also improved as easy access, free parking and the convenience of these locations attracted shoppers.

Stronger than anticipated golden quarter performance provided a solid base from which to start 2023, as postal strikes drove shoppers back to bricks and mortar for their Christmas shopping. We expect 2023 to remain positive with funding available for stores to protect against high energy prices, the continuation of workers returning to offices and a revision to business rates providing much needed support to navigate current market headwinds.”

Eight of the 100 outlet categories tracked by the Local Data Company saw net growth in double digits. Of those. leisure outlets accounted for half of those categories.

Takeaways continue to top the league table for new openings with demand for both food on the go and  home delivery continuing post pandemic. Many are franchise operators, as are the other success story: convenience stores. Nimble, with significant local knowledge and capital-light, these local entrepreneurs can move quickly and service gaps in the market backed by strong brands and helped by lower rents as other operators have retreated post-pandemic. Other categories, such as DIY and pets are bouncing back, helped by pandemic trends.

Rick Jones, Hospitality, Sports and Leisure Leader at PwC comments on the positive news for leisure operators:

“The marked growth in the leisure sector is great news for towns and cities across Great Britain.  This is particularly marked for those that have a growing student population or are emerging family towns.  The food and beverage revival is testament to how quickly successful businesses with strong and relevant consumer offerings have mobilised their efforts, including taking advantage of site availability and more favourable rents. to satisfy the resurgent post-lockdown demand.”

On the other hand, service providers are driving the closures across the sector. A structural shift online is responsible for the majority of closures in many of the categories, such as the four fastest declining categories of banks, betting shops, charity shops and fashion retailers. Even so, all four categories saw a significant slowdown in closure numbers compared with 2021; for example, fashion saw only 228 net closures in 2022, an over 80% reduction compared with 2021 when a number of large clothing retailers closed or moved online.

The press release issued by PWC on 27 February 2023.

Companies are increasingly using carbon targets as part of executive pay outcomes, according to a joint study by PwC UK and the London Business School (LBS) which analyses the carbon targets in executive pay at 50 of the top major European companies.

The report reviews the quality of the implementation of ESG targets in executive pay in the STOXX Europe 50 constituents, with a particular focus on climate targets in pay, to see whether they can be included in an effective way that also meets investor expectations. Analysis shows that the vast majority (78%) of companies have now adopted some measure of carbon target in executive pay, with payouts in carbon targets disclosed in 2022 averaging at 86%, and over half paying out at 100%. The report also shows that the bigger carbon emitters are more likely to put carbon measures in executive pay, and are therefore more likely to score well against investor expectations.

The STOXX 50 companies are broken-down into two sub-categories: the ‘Climate Action 100+’ ((CA100+)14 out of the 50 companies) and the ‘non Climate Action 100+’ ((non-CA100+) 36 out of the 50 companies), to look at differences in approaches.

The levels of maturity in carbon reduction strategies are similar in CA100+ and non CA100+, with 68% using SBTi approved carbon reduction plans. The report also highlights that 80% of CA100+ companies that have an explicit carbon measure in pay have a broad statement linking this carbon measure to their long-term company plan (vs 72% of non-CA100+ companies). By contrast, only 10% of CA100+ companies provide a more comprehensive link (e.g. supported by numbers) versus 11% of non-CA100+ companies.

Almost all companies analysed say carbon is considered in executive pay, but there is a wide spectrum of approaches for how it has been adopted. At one end of the spectrum, carbon is just one item on a list to consider as part of a basket of qualitative ESG measures, while at the other end, carbon can be a separately weighted quantitative component of the incentive plan tied directly into strategy.

Phillippa O’Connor, Workforce ESG leader at PwC comments:

“Climate change is having a huge impact on the way businesses operate, with net zero targets, mitigation and adaptation measures of growing interest to investors. Recently we’ve seen an explosion of interest from investors and companies linking executive pay to ESG targets. In fact, 86% of companies have now adopted ESG measures in their executive remuneration policies, as businesses want to demonstrate they are serious about the ESG challenges.

“Climate is the area of ESG with the strongest investor consensus. It’s crucial that leaders are clear on what is important to investors and understand the role they have to play in achieving both financial and non-financial metrics. Linking shareholder objectives to specific climate driven objectives gives leaders a clear definition of success, helps meet investor expectations, and ultimately helps achieve climate goals. Yet there are unintended consequences of linking pay to ESG metrics. ESG targets in pay is not always as simple as it seems and should not be viewed as the sole litmus test of a company’s commitments to ESG priorities. The challenge now must be to do it well, so that pay targets make a meaningful contribution to helping companies meet their climate goals.”

Tom Gosling, Executive Fellow, Department of Finance Leadership Institute, London Business School, adds:
“The momentum to include climate targets in pay is unstoppable. But if it’s not done well, there’s a risk that the practice just results in more pay, not more climate action.

“At the moment most companies aren’t meeting investor expectations for meaningful, objective, and transparent climate pay metrics. But there are some potential quick wins, in particular improving transparency about future climate targets and clearly explaining the link to the trajectory of longer-term net zero commitments.

“At the same time investors need to be careful not to be too prescriptive – climate targets in pay are not a panacea, and companies may have non-climate priorities that are more deserving of a place in pay plans.”

The press release issued by PWC on 21 February 2023.

Jake Finney, economist at PwC UK, says:

“Net borrowing was in surplus by £5.4bn in January, which was £5bn higher than the Office for Budget Responsibility (OBR) expected. This indicates that the improved economic outlook is gradually starting to ease the pressures on the UK’s public finances.

“Tax receipts picked up in January, as workers and companies settled their tax bills. However, this was partially offset by large spending on energy bills support and one-off payments to the EU relating to historic custom duties.

“Debt interest payments reached £6.7bn in January, the highest January figure since monthly records began 26 years ago. This reflects the fiscal consequences of higher RPI inflation and higher interest rates. Higher debt servicing costs as a share of total revenues will leave the public finances more exposed to future economic shocks.

“In the coming months, falls to natural gas futures prices should start to gradually bring down the cost of the Energy Price Guarantee scheme. However, we expect this will be partially offset by reduced tax receipts due to lower than expected inflation.”

The press release issued by PWC on 14 February 2023.

Commenting on the publication of the ONS’ Low carbon and renewable energy economy, UK: 2021, Lynne Baber, Head of PwC Sustainability, said:

“We know that the transition to a green economy must accelerate. Today’s ONS data is welcome confirmation that the pace is beginning to pick up with turnover and employment rates in the low carbon and renewable energy sectors both reaching their highest levels, but more must be done.

“With our recent Green Jobs Barometer showing that green jobs are growing at almost four times the rate of the overall jobs market, today’s data reinforces how strong the UK’s starting position is in the race for green economic growth.

“However, with countries across Europe and other parts of the world stepping up their own ambitious plans for green growth, the UK must ensure the path is clear to continue moving at the required pace – that means ambitious policies aimed at green growth, and investment in infrastructure, energy efficiency, and technology while ensuring that these jobs are created in the regions where they are most needed.

“PwC analysis has shown that reskilling or upskilling of the workforce needs to accelerate now in order to fill the green skills gap in time to meet net zero by 2050.

“Challenges arise in ensuring that workers are sufficiently reskilled into new roles and that the demand for skills are met, particularly given a lack of coherent labour force planning, a lack of engagement with educational institutions and negative perceptions of the energy sector amongst young people.”

The press release issued by PWC on 14 February 2023.

Commenting on the latest ONS labour market data, Jake Finney, economist at PwC UK, says:

“The headline indicators continue to point towards a slowdown, showing the labour market is not immune to the pressures facing the wider economy. Vacancies are now down 11% from their peak, while unemployment and redundancies both increased. While vacancies are still high by pre-pandemic standards, and unemployment and redundancies remain low, the direction of travel appears to be clear.

“Vacancies are falling the fastest in sectors that are most affected by the economic slowdown. This includes consumer-facing sectors such as arts, entertainment and recreation, energy-intensive sectors like manufacturing, or those sensitive to interest rates, like real estate. The public sector is one of the few industries where vacancies have not fallen back from their 2022 peak – likely due to continued difficulties in attracting staff due to larger pay rises in the private sector.

“More positively, there was a record-high net flow of people coming out of economic inactivity over the last quarter. We expect that at least 300,000 inactive working age adults could return to the labour market over the next year, as we set out in our latest UK Economic Outlook.

“Going forward, we expect that the labour market will continue to cool as the economy slows down. The unemployment rate is likely to continue rising, potentially peaking at around the 5% mark that was reached during the pandemic”.

The press release issued by PWC on 7 February 2023.

• Continued levels of investment in sport forecast and valuations are expected to rise
• Women’s sport revenues expected to grow significantly over the next few years
• Big tech companies are predicted to become more active in the sports media rights market
• Nearly 40% of sports executives reported prioritising a balanced approach to E, S and G moving away from ad-hoc initiatives

The PwC Global Sports Survey, now in its seventh edition, features responses from 507 senior sports executives from across 43 countries and analyses the market forces likely to transform the sports sector over the next three to five years and looks at how those perceptions have changed in the last 12 months.

Overall, the survey respondents reported optimism about the future of the sports sector following the debilitating impact of the COVID-19 pandemic, with the outlook for growth improving in the last year from 5 to 6.5%. The key revenue drivers of the improving growth are increased media rights, the resumption of ticketing and hospitality and growing betting related revenues.

Clive Reeves, Global Sports Leader at PwC, said:

“Following a difficult few years due to the COVID-19 pandemic, the sports industry is on the path to recovery and it is great to see in our survey results that the spirit of optimism has returned. With fans now back in stadiums and strong consumer demand for sports content, growth expectations have increased compared to previous years.”

Sports Investment

Following a number of significant investments in sports leagues and teams in the past year, the PwC Global Sports Survey reveals that more than three quarters (83%) of senior sports executives believe institutional investment (Private Equity and sovereign wealth funds) will continue to grow in the next three to five years.

More than two-thirds (68%) of respondents believe the focus for Private Equity and sovereign wealth investment will be on premium sports properties.  The view is that further value can be unlocked through seizing new streaming and digital opportunities, creating alignment across stakeholders and transforming ways of working.

Clive Reeves, said:

“More than ever sports organisations are looking for additional resources to remain competitive both on and off the pitch, while investors have been buoyed by the underlying resilience of consumer demand. Institutional investment has the potential to transform sports organisations and help capitalise on new market opportunities.”

“However, sports organisations face a dilemma as they balance the level of control they are willing to give up in return for investment. This is evident in the results of our survey which show that almost two thirds of respondents believed investors, sports organisations and fans may have misaligned objectives.”

Rising valuations

The value of sports clubs and franchises are expected to rise according to those surveyed amidst growing interest from investors and the increase in sports M&A activity across the globe. For the first time in the survey, PwC analysed the expected growth in sports club franchise valuations with respondents predicting a 6.6% growth rate over the next three to five years. Driving this demand is the scarcity of assets which combined with increasing demand from investors and a strong media rights market is driving valuations higher. In the last 12 months, teams in the NBA, NFL, Premier League and Serie A have all sold for record sums.

Clive Reeves, continued:

“With strong expectations on the media rights market and the belief that further commercial potential is still to be unlocked, the number of parties interested in investing in teams or leagues is expected to rise, driving up valuations further. We have seen from recent transactions that the valuations of premium sports properties are increasing, which reinforces the views gathered in our survey.”

Women’s sport on the rise

The majority of sports executives view the women’s sport market as a critical part of future industry growth with over 70% believing revenues will grow by more than 15% in the next three to five years. This forecast is supported by the growing interest from media companies and sponsors who are increasingly seeking to realise the opportunities women’s sport offers, with a number of improved partnerships formed in the past year. However, institutional investment is yet to follow this trend, adopting a more cautious wait and see approach.

In order for women’s sport to accelerate its growth, 50% of respondents indicated that greater media coverage is the most impactful driver of growth. Increasing live coverage and achieving wider reach is essential to set the flywheel in motion as increased visibility will attract more commercial partners which in turn will stimulate revenue growth and enable greater investment in talent and sport development.

Clive Reeves, said:

“Increasing the visibility of women’s sport on high-reach networks can set a powerful flywheel in motion. Extending reach and growing fandom are essential to attract commercial partners and investors who are willing to invest in women’s sport and provide the required financial resources to enable growth at all levels”

“It is essential that all stakeholders work together to accelerate the growth of women’s sport and build a strong, sustainable platform for long-term success.”

Big tech companies becoming more active

In the last 12 months the sports industry has seen tech giants, such as Apple and Google, make significant moves in the sports media rights market. In our survey, 76% of sports executives stated that large tech companies are best positioned to win the battle for sports rights in the next 3-5 years. In addition 75% of respondents also reported that rights owners will need to be more creative in their media rights distribution models to succeed in the future.

Clive Reeves added:

“The recent rights acquisitions from the big tech companies are great for sport, having new media partners investing in sport and helping grow reach, engagement and fandom can only be good for the sector. It will be interesting to see how the fan experience evolves and new monetisation models emerge over the next few years.”

ESG in sport

More than half of respondents believe they are advanced in their approaches to Environment, Social and Governance (ESG) policies, however there remains significant room for improvement. Sports organisations, like organisations in other sectors, are under growing pressure to shift their business strategies from shareholder capitalism to stakeholder capitalism. Nearly 40% of sports executives reported prioritising a balanced approach to E, S and G moving away from ad-hoc initiatives to more embedded ESG approaches within the organisation’s strategy. However, delivering a balanced and integrated approach is difficult, according to our survey 41% of respondents say the biggest challenge to sustainability is organisational culture.

Clive Reeves commented:

“With growing understanding of the interconnectedness and complexity of ESG it’s imperative that sports organisations move away from ad hoc initiatives.  We believe sports organisations will move towards a more balanced and integrated ESG approach. However, the key question remains how organisations can achieve this balancing act whilst managing limited resources and operational demands.

The press release issued by PWC on 10 February 2023.

Commenting on the December ONS figures released today, Barret Kupelian, senior economist at PwC, says:

“The big picture story from today’s GDP figures is that UK economic activity is stagnant. The UK has avoided a technical recession for now. But unlike the rest of the G7, UK economic output remains below pre-pandemic levels. And with most of the G7 continuing to grow, the gap between the UK and its competitors is widening.

“Looking forward, the economic outlook for most advanced economies has improved considerably, aided by a weaker US Dollar, a sustained decrease in the spot and future prices for natural gas and the reopening of the Chinese economy. All of these factors are expected to act as tailwinds to the UK economy in the near-term.
“In contrast, we expect the effects of tighter financial conditions to be increasingly felt across the real economy, both in the UK and the Eurozone, which will act as a headwind to growth.

“Looking ahead to the Spring Budget in March we can expect the government to focus on measures to reduce the UK’s high economic inactivity rate, which is acting as a drag on short and medium term growth.”

The press release issued by PWC on 8 February 2023.

Grant Klein, public sector transport leader at PwC, said:

“Changes to rail fares and ticketing are a necessary and positive step in responding to changing public needs since the pandemic, and reflecting other consumer trends.

“The rail sector now has the opportunity to be the spine of a travel experience revolution and a catalyst in redefining how we use rail alongside other modes of travel. To achieve this, fares and ticketing need to be joined up across all forms of public transport, particularly incorporating emerging micro mobility modes, such as dockless e-bike and e-scooter schemes. This is how rail can kick-start the smart mobility revolution, helping us all to choose the right combination of travel options for each journey. Giving clearer information on the carbon impact of each journey would also empower people to make more informed travel decisions.

“It’s positive that the Transport Secretary called out how Great British Railways will work in a five region structure. But in that context, it is critical that any changes support levelling-up the UK, by devolving some aspect of fare setting to the cities and regions where we are travelling. For example, fares could include a proportion that is centrally defined, as well as a locally-set amount topping the fare up, from which revenues can be kept for local travel schemes.”

The press release issued by PWC on 14 February 2023.

According to the Insolvency Service’s latest quarterly data, in January 2023 there were 1,671 company insolvencies – 7% higher than in the same month in the previous year (1,567 in January 2022), and 11% higher than the number registered three years previously (pre-pandemic; 1,502 in January 2020).

Ed Macnamara, Head of Restructuring in PwC’s Restructuring and Forensics practice, said:

“While the number of company insolvencies in January is down on the month before, any respite is likely to be short-lived. The data, which shows a 7% rise on the year before, serves as a reminder that we are still in the midst of a difficult trading environment with rising interest rates and high inflation which, when combined, generally results in more company failures.

“We’re also seeing an uptick in both late payments and the number of requests to extend credit terms. In the construction sector for example, clients have flagged a significant increase in new customer accounts being opened as companies try to spread their credit risk across the market. In addition, many subcontractors are reporting that they’re unable to pay for products because they haven’t been paid either. This domino effect is likely to increase the squeeze on businesses already struggling with their debts and might mean that some are forced into insolvency.”

Rachael Wilkinson, Director in PwC’s Restructuring and Forensics practice, added:

“While many directors are voluntarily folding their businesses – exhausted from a pandemic and continuing supply chain issues – we expect to see more forced closures of businesses as 2023 continues. In the first month of the year, there were 334 winding up petitions filed which, while slightly fewer than the month before, represents a 135% increase on the 142 filed in January 2022.

“With the headwinds impacting businesses intensifying and more pain on the horizon, it’s clear that creditors feel compelled to take action. The best thing businesses can do is get their forecasts in order and look at restructuring options where appropriate in order to help weather the economic storm.”