Asda buys Co-op’s petrol business in £600m deal

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1st September 2022

Bite-sized business news from the UK and beyond

Good morning French tax collectors are going off the deep end. They’re using artificial intelligence and publicly available aerial photos to identify homeowners with secret (read: undeclared, for tax purposes) home swimming pools.

So far, the initiative has generated €10m after finding thousands of undeclared pools. But that’s just in nine of the nation’s 96 metropolitan departments, meaning the initiative is set to make a far bigger splash as it expands nationwide.

Today's stories

Asda buys Co-op’s petrol business in £600m deal
Snap becomes latest tech firm to cut workforce

RETAIL
Asda buys Co-op’s petrol business in £600m deal

What happened?
Yesterday the Co-op announced that it had agreed to sell its 132 forecourts to Asda for £600m, saying the sale would free up cash for the company and strengthen its financial position.

How did we get here?
The Co-op owns a supermarket chain and funeral provider and in recent years has sold off its chain of pharmacies and travel shops in a bid to focus on its core retail business. Around 2,300 employees from the forecourts will transfer to Asda.

Asda already owns around 300 petrol stations through its supermarket locations but the deal gives it more exposure to the convenience segment of the grocery market where it’s historically lagged behind rivals Tesco and Sainsburys.

Mohsin Issa, co-owner of Asda, said the supermarket saw convenience stores as a "significant growth opportunity for the business". Industry data shows that there has been a 12% increase in average weekly spend at forecourts in the past year. The acquired stores delivered sales of £863m in the past year.

Next steps: The deal is expected to close before the end of the year with Co-op branding removed and rebranded to Asda. The supermarket hopes the acquisition will help it reach its long-term ambition to leapfrog Sainsburys and become the UK’s second-largest supermarket after Tesco.

Other stories to keep you in the loop

Pound on crash course to record low against US dollar
Train drivers from 12 firms to strike over pay in September
What the three-day Nord Stream 1 closure could mean for the UK
John Lewis offers staff free food over Christmas to help with cost of living
Goldman Sachs scrap remaining Covid office rules
BrewDog criticises ‘clueless government’ as it closes six pubs over energy bills

TECH
Snap becomes latest tech firm to cut workforce

What happened?
Yesterday Snap, the parent company of Snapchat, announced it would layoff 20% of their employees, putting 1,300 people at risk of losing their jobs as part of a wider company restructuring.

How did we get here?
Popular with Gen Z and Millennials, Snapchat is one of the smaller social media networks, with around 350m users. The company has struggled financially for months. The share price plummeted in July following bleak second quarter results and the company withdrew its guidance for the current quarter.

The growing concerns over an economic downturn in Europe and the US has led many advertisers to cut back spending on social media platforms.

Snap is expecting the weak advertising market to continue into next year. Snap and its peers have also been affected by last year’s privacy updates by Apple which makes it more difficult to track user online behaviour and therefore more difficult to generate revenue from them.

As a result, the company is scaling back ambitious growth plans including cutting investments in augmented reality projects.

Soaring inflation, rising interest rates and a war in Ukraine have dented investor and consumer confidence this year
Snap is the latest in a long line of tech firms - including Tesla, Netflix, TikTok, Klarna and Twitter - to announce major job cuts. After hiring aggressively during the pandemic to keep up with high demand many tech firms are now preparing themselves for a period of low or no economic growth.

Stat of the day

With a net worth of $137bn Indian industrialist Gautam Adani is now the world’s third richest person, the first Asian to do so. He’s added five times more to his net worth than anyone this year

Interesting links from around the web

10 of the best TV shows to watch this September
The 33 coolest streets in the world
Height discrimination: How 'heightism' affects careers

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Asda buys Co-op’s petrol business in £600m deal

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