McDonald’s sales fall for first time since 2020 as higher prices scare away consumers — Business Life | Business

JD Wether­spoon founder Tim Martin has sold shares in the pub chain worth almost £10 million.

Martin, who is also chairman of the hotel company, sold 1.361 million shares in the company on July 26, according to a statement from the London Stock Exchange.

As a result, shares in the company fell 0.9% to 743p in early trading on Monday.

They are now trading down 0.6% at 745p.

The famously outspoken Wether­spoons boss sold the shares at 739p apiece, securing a profit of £9.58m.

The sale reduced his stake in the company from 25.68% to 24.58% or 30.38 million shares. The company did not give a reason for the sale.

Martin founded the company in 1979 with one venue, Martin’s Free House, and has since grown the business to 801 locations across the UK with 43,000 employees.

JD Wether­spoon announced another recent increase in sales in early July as the company continued to sell some venues. It reported that like-for-like sales rose 5.8% in the ten weeks to July 7 despite unusually wet weather.

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Major Indices Rise as US Markets Open for Trading:

• The S&P 500 rose 0.29% to 5,475 points

• The Dow rose 0.2% to 40,668 points

• Nasdaq rises 0.49% to 17,442 points

Rob Davies

HS2 has revealed more than £2 billion in costs linked to Rishi Sunak’s decision to downgrade the high-speed line.

In HS2 Ltd’s annual report, the company revealed it had written off £1.1bn of costs incurred during the “second phase” of the project, which would link Birmingham with Manchester, only for the section to be abandoned last year .

The company also disclosed a further £1bn of accounting costs relating to the project’s reduced ambitions, which will reduce expected future revenues.

In total, the company announced one-off costs of £2.17 billion related to the reduction of the infra­structure project.

Sunak canceled the second stage of the HS2 project at the Conser­v­ative Party conference in Manchester last October, sparking conster­nation in a city that was supposed to benefit from the new fast link.

The decision followed a series of long delays and rising estimated costs that had seen the price of the high-speed line rise to £71 billion.

While the decision was met with resentment in the regions that were supposed to benefit from the project, Labor said it would not reverse the previous govern­ment’s decision.

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McDon­ald’s has reported a surprise decline in global sales in the second quarter, marking the fast food chain’s first quarterly decline since 2020.

CEO Chris Kempczinski said consumers were “more discrim­i­nating in their spending” as the US grocery giant said global sales fell 1% to $6.49 billion in the three months to the end of June.

This contributed to a 12% decline in profits to $2 billion.

The decline comes as consumers negotiate their spending habits after years of rising inflation that has driven up prices for restaurant meals and fast food.

McDon­ald’s is now trying to use discounts to lure customers back and increase footfall, partic­u­larly in the U.S., where about 41% of the company’s sales came last year.

Deals reportedly included a $5 package for a sandwich, chicken nuggets, french fries and a drink.

BREAKING: Ministers have offered young doctors a salary deal that would see their income rise by 20% over two years. the Times reports (paywall).

The Times says the British Medical Associ­a­tion’s junior doctors are recom­mending a proposal that would include:

• A retroactive wage increase of 4.05% for 2023–24 (in addition to an existing increase of between 8.8% and 10.3%).

• Another 6% for 2024–25

• A consol­i­dated payment of £1,000

As junior doctors push for a 35% pay rise, the BMA has agreed to make the offer to members, which would help end the strikes. The paper reports.

Richard Partington

According to official data from the Bank of England, British consumers limited their credit card borrowings in June as cold weather and the cost of living crisis discouraged house­holds from spending.

Thread­needle Street’s latest snapshot showed net consumer borrowing fell to £1.2 billion in June from £1.5 billion in May, below City econo­mists’ expec­ta­tions.

Karim Haji, global and UK head of financial services at accoun­tancy firm KPMGsaid the figures showed recent stronger economic growth and lower inflation had not yet been felt by consumers.

What is clear is that despite inflation remaining at target levels for two months in a row, house­holds are not neces­sarily feeling better — in fact, wage growth has slowed in recent months, which may explain this.

The UK economy emerged from recession faster than expected in the first quarter, while inflation cooled from a peak of 11.1% in October 2022 and remained steady at 2% for a second straight month in June.

Financial markets are forecasting that the Bank of England’s interest rate decision on Thursday will be on a knife edge as the Monetary Policy Committee considers whether to implement the first rate cut since the Covid pandemic.

Separate figures from the bank showed that net mortgage approvals — which provide an indication of future levels of borrowing — remained broadly unchanged in June compared to the previous month, in a sign that the property market is strength­ening ahead of the general election and interest rate decision on Thursday began to falter.

Anthony Codling, European housing analyst at RBC Capital Markets, said:

Stability is good, but in our view the UK property market appears to be treading water, waiting and hoping for the first rate cut.

There is a small chance that the cut could happen on Thursday, but we think the first cut is more likely in September. Once mortgage rates begin to fall, we expect the real estate market to pick up.

Horizon scandal: Post office is “poorly managed and chaotic,” says former chairman

Mark Sweney

The Post Office inves­ti­gation continues today, with the Post Office’s former chairman describing the company as “poorly run and chaotic”.

Neil McCausland, senior independent director and interim chairman of the Post Office between 2011 and 2016, At the public inquiry into the Horizon scandal on Monday, the company heavily criti­cized the state of the company and its IT structure.

McCausland said:

The post office I went to was a very poorly run and chaotic operation.

The IT infra­structure we knew was old, under-invested and broken. The Horizon system, as we knew, was almost at the end of its lifespan.

McCausland, whose role included examining how a new system could be intro­duced in the future to replace Fujitsu’s Horizon accounting software, said the system was at least 15 years old at this point, although it was common practice replacing the IT systems after about a decade.

He added:

We knew we had a dilap­i­dated, under-invested IT infra­structure.

Horizon was a clunky, creaky and not partic­u­larly intuitive system.

However, McCausland said he had received no indication that the integrity of the data and accounting software was anything other than “solid.”

You can watch the rest of the proceedings live here: