Lottery sales take a hit as Brits cut back spending

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29th June 2022

Bite-sized business news from the UK and beyond

Good morning Britain is getting greyer. New census figures for England and Wales show that more people than ever are aged over 65 with the number growing by 6.3% in the past decade. The Queen’s longevity is no fluke, either - there are more than half a million people aged over 90.
You can check out how much your area has aged since 2011 here.

Today's stories

Unlucky: Lottery sales take a hit as Brits cut back spending
Called off: Boots owner scraps sale plan

CONSUMER
Lottery sales take a hit as Brits cut back spending

What happened?
Yesterday, National Lottery operator Camelot reported that the soaring cost of living has led to a 3% drop in ticket sales to £8.1bn in the year to March.

Not feeling so lucky
Launched in 1994, the National Lottery is one of the world’s largest lotteries and is played by 10m Brits. Alongside the physical tickets that can be bought in over 44,000 retailers across the UK, Camelot also operates online instant games where sales fell almost 7%.

The company says this was driven by the increased competition for consumers attention as the economy reopens from Covid restrictions. The rising cost of living is also creating greater economic uncertainty meaning households are being more careful when it comes to where to spend their disposable income.

Passing on the torch
In March it was announced that Camelot was set to lose the licence to operate the National Lottery after 28 years. The government body in charge of awarding the licence chose Czech rival Allwyn Entertainment as its preferred operator for the next decade starting in 2024. But Camelot is challenging the decision

Allwyn is Europe’s biggest lottery operator and runs lotteries in the Czech Republic, Greece, Cyprus, Italy and Austria.

So why did Camelot lose the licence after three previous successful bids? The bidding process is clouded in secrecy, but it's thought that after three decades, the government wanted to shake up the lottery with a new operator.

Camelot has been criticised for not giving enough back to good causes and not doing enough to curb gambling addictions – areas Allwyn wants to address.

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RETAIL
Boots owner scraps sale plan

What happened?
Yesterday Boots owner Walgreens announced that it has ditching its plans to sell the pharmacy chain after bidders struggled to raise funds amid turbulent financial markets.

How did we get here: Boots was put up for sale by its American health group owners Walgreens in January and was originally expected to fetch for as much as £6bn. The 173-year-old high street retailer had drawn interest from some of the biggest investors in the world including private equity houses who rely on debt to fund transactions.

This year central banks worldwide have raised interest rates to combat soaring inflation, this has increased the cost of borrowing making debt-funded deals harder to get across the line.

Also the growing prospect of a slowdown in the global economy and the war in Ukraine has made lenders more nervous of doing a deal amid so much uncertainty.

Financing wasn’t the only issue with buying Boots
Boots has one of the largest pension funds in the UK. The £8bn private retirement scheme requires intensive funding which a new owner would have been on the hook for.

What next: Walgreens insisted that the pulled sale didn’t reflect badly on the performance of Boots, saying it was growing and performing well. It said it would invest in the business and was “extremely excited for the future”.

Stat of the day

The population of England and Wales has grown by more than 3.5 million (6.3%) in 10 years to 59.6 million

Interesting links from around the web

Practical ways to turn new connections into long-term friendships
The employee surveillance that fuels worker distrust
How to do corporate strategy in the age of uncertainty

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Lottery sales take a hit as Brits cut back spending

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