Market Loop - Cash makes a comeback

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9th August 2022

Bite-sized business news from the UK and beyond

Good morning After nearly two weeks of competition, the 22nd Commonwealth Games officially closed last night with a surprise performance by Ozzy Osbourne. The jam-packed sporting schedule saw over 5,000 athletes from over 70 different countries coming together in Birmingham to compete in 19 different sports.

Well done to team Australia, who had a golden games and managed to snag the top spot of the medals table with a total of 178 medals (67 gold), while England celebrated second place with a record haul of 176 (57 gold) and Canada took the bronze with 92 (26 gold). The baton now passes to this year’s winning nation and 2026 hosts, Australia.

Today's stories

Cash makes a comeback
Next in talks for stake in struggling retailer

ECONOMY
Cash makes a comeback

What happened?
Brits are reverting to cash as a more effective way of managing their personal finances amid a cost of living crisis, according to new data released by the Post Office.

In July the Post Office’s 11,500 branches handled a record £801m in cash withdrawals, up almost 8% compared to June and 20% higher than in 2021.

It marks a reversal of the longstanding move towards a cashless society
For years cards have been taking an increasing share of the payments market. Five in six payments now involve no notes or coins, compared with half of all transactions a decade ago. This trend accelerated during the pandemic with official data showing that the number of payments made using cash fell by 35% in 2020.

In fact nearly 14m people were estimated to be leading a “cashless life” in 2021 – almost double the figure in 2019.

But with a rising cost of living fuelled by higher energy bills more people are turning to cash to manage their budgets
Research shows that people that spend with cash rather than card have more of a handle over how much they spend. But a return to cash could be more difficult as bank branches close and a growing number of businesses have stopped accepting cash.

Amid concern about millions of people potentially being left behind, the finance regulator confirmed it would be handing powers to ensure local communities across the UK have access to cash.

Other stories to keep you in the loop

Boris Johnson rejects pleas to act on cost of living crisis
US Senate passes $739bn healthcare and climate bill after months of wrangling
PwC fined nearly £1.8m over BT fraud audit failures
Qantas asks executives to volunteer to fill in as baggage handlers
Zara loses name-change bid against owner of small fashion firm House of Zana
SoundCloud is firing 20% of its global workforce
SoftBank CEO ‘ashamed’ of pride in past profits as record losses prompt cost cuts
Olive oil prices to rise as heatwave hits production

RETAIL
Next in talks for stake in struggling retailer

What happened?
Shares in fashion retailer Joules surged as much as 58% yesterday after it confirmed it was in talks with Next to take a 25% stake worth £15m.

How did we get here?
Founded in 1989 at a country show in Leicestershire selling clothes, Joules has become known for its upmarket outdoor wear and grown to 130 stores employing more than 1,000 people.

The company has had a difficult year repeatedly slashing sales and profit targets. It’s battled with rising costs and a slowdown in consumer confidence in recent months as the UK high street struggles with 40-year-high inflation. It said consumers feeling the squeeze amid a rising cost of living had become more cautious on making high end purchases putting pressure on its profits. As a result of the weaker trading performance Joules’ shares have slumped by nearly 90% the start of 2022.

Last month, the struggling retailer hired Big4 accountant KPMG to help it improve profitability and cash generation.

Next has track record of buying into smaller retailers
In recent years the high street giant has taken advantage of the string of high street collapses to add to its stable of brands. Next has taken stakes in fashion retailer Reiss, lingerie brand Victoria's Secret and maternity retailer JoJo Maman Bebe.

Stat of the day

The average UK adult only eats 3.25 portions of fruit and veg a day

Interesting links from around the web

How to tell if the sun has hurt your skin
The parents creating new surnames
How to ask for (and get) what you need at work

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Market Loop - Cash makes a comeback

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