🐷 UK Retailers ‘raided like piggy bank‘

📰 Industry News

Here's a roundup of this week's top headlines shaking up the UK business world.

• The owner of Hobbycraft, Modella Capital, has made a late swoop to buy The Original Factory Shop (TOFS) after talks with a rival suitor stalled at the 11th hour. TOFS has more than 180 stores around the UK. (Sky News)

• The UK will not retaliate immediately to the renewal of steel and aluminium tariffs by the US. (BBC)

• Online retail giant, Amazon, is to create apprenticeship opportunities across its UK businesses including Amazon Web Services, Prime Video, and Amazon Devices and Services. (The Retail Bulletin)

• At least half of WH Smith’s 500 high street stores could be closed by any new owner, industry experts say, raising the prospect of sweeping job losses at the ailing retailer. (The Guardian)

• Lidl is the latest supermarket to raise pay before April’s minimum wage hike. Entry-level wages will jump from £12.40 to £12.75, benefiting around 28,000 employees. (BBC)

• UK high street bank, Barclays, told 90,000 employees on Wednesday that they would receive grants of 170 Barclays shares, around £500, in its first such equity handout. (Sky News)

🚲 UK E-Bike Industry Takes Massive Hit

This has left British E-Bike manufacturers fuming, and rightly so. The government has decided to scrap tariffs on Chinese e-bikes, a decision which will likely flood the market with cheaper Chinese imports. The decision, backed by the Trade Remedies Authority, could save consumers up to £200 per bike - but at what cost…?

The Details:

• Tariffs Scrapped: The government has lifted anti-dumping and subsidy tariffs (previously up to 70%) on non-folding Chinese e-bikes, making imports significantly cheaper.

• The UK Impact: Manufacturers like Volt, which moved production to the UK post-Brexit under the assumption of long-term tariff protections, feel betrayed.

• Industry on the Brink: The UK e-bike sector has already struggled post-Covid, with oversupply and sluggish demand. Now, the influx of cheaper imports could push more firms out of business.

• Selective Protectionism? Folding e-bikes remain tariff-protected, leaving manufacturers wondering why one part of the market is shielded while the rest is left to fend for itself. While folding e-bike manufacturers are feeling uneasy as to how long their protection will last.

The Bottom Line

The government argues this will benefit consumers, but the reality is more complicated. The UK e-bike industry has been calling for incentives like grants and infrastructure investment - yet instead, they get a decision that makes it harder to compete. Meanwhile, Chinese manufacturers, dealing with their own oversupply, now see the UK as a prime dumping ground.

If the goal was to boost cycling, why not support British businesses instead of undercutting them? Right now, I feel like this is less like a strategic policy and more like a haphazard decision made by people who don’t quite understand the industry.

📦 Retailers Kick Off 2025 with a ‘Solid’ Start

After a lacklustre 2024, UK retailers are finally seeing some sunshine - at least for now.

According to the British Retail Consortium (BRC), retail spending in January rose by 2.6% year-on-year, well above last year’s sluggish 0.8% average. Barclays also reported a 1.9% rise in consumer spending, its highest since March. But before we pop the champagne, retailers are bracing for an incoming storm: higher employment costs, inflation pressures, and tax hikes.

What’s Driving the Rebound?

• Stronger Consumer Spending – Despite consumer sentiment hitting record lows, people are still opening their wallets, possibly driven by pent-up demand and post-Christmas bargains.

• A Weak Start in 2024 Helped the Numbers – January’s growth looks impressive, but last year’s dismal performance makes the comparison a little misleading. December's figures were also inflated by Black Friday timing quirks.

• Big Cost Pressures to Come – With £7bn in extra costs coming from tax hikes, the rising minimum wage, and new levies, retailers are warning of price hikes and potential job cuts. Sainsbury’s is already cutting 3,000 roles in response.

The Outlook

While a strong start to 2025 is a relief, history suggests caution. Retail spending has seen early-year spikes before - only to be hit by rising costs and economic slowdowns later. With inflation predicted to creep up again and businesses struggling with mounting expenses, I think we could see a familiar pattern: a bright start, followed by a bumpy ride. This is the UK economy after all.

🌎 From Across The Pond

Elon Musk escalated his feud with OpenAI and its CEO, Sam Altman, on Monday. The billionaire is leading a consortium of investors that announced it had submitted a bid of $97.4bn for “all assets” of the artificial intelligence company to OpenAI’s board of directors.

Sam Altman’s response was pretty amusing.

A clever play on moving the decimal point on the $97.4bn offer Musk made after the world’s richest man paid $44bn for the platform in 2022. While calling the platform Twitter despite Musk’s controversial attempt at a rebrand was a nice touch too.

💡 Want To Sponsor Hustlers Outpost?

Want to get your brand in front of UK entrepreneurs, hustlers, and e-commerce pros?

Hit reply and let’s chat!