The government is inviting local councils to bid for a share in a government fund, aimed to help the struggling high street. Chancellor Philip Hammond announced the £675 million fund during his October budget and bidding opened on Boxing Day. The retailer Sir John Timpson, who owns the shoe repair chain, called on the government for more money to be invested into the high street to transform them into “community hubs” and shift the focus from just shopping. “We all know high streets are changing, we can’t hide from this reality. But we’re determined to ensure they continue to sit at the heart of our communities for generations to come,” he said. “To do this we have to support investment in infrastructure, boosting local economies and ensuring people are able to get the most out of their local high streets.” This year has seen troubling conditions for the UK high street, where retailers including Poundworld, Maplin and Toys R Us have collapsed into administration. Many retailers, including Marks & Spencer (LON: MKS) and Carpetright (LON: CPR), have suffered and have closed stores using CVAs and issued profit warnings. High streets minister Jake Berry said: “We all know high streets are changing, we can’t hide from this reality. But we’re determined to ensure they continue to sit at the heart of our communities for generations to come.” “To do this we have to support investment in infrastructure, boosting local economies and ensuring people are able to get the most out of their local high streets. Empowering leaders on the ground is key too – they best understand the challenges facing their areas.” “Our future high streets fund will drive forward this change, transforming our town centres into the thriving community hubs of the future,” he added. One of the biggest challenges to high street shopping is online shopping, which in August 2018 accounted for almost a fifth of retail sales.

A new report from the Resolution Foundation has found that the UK’s black and ethnic minority (BAME) workers earn less than their white colleagues in the same jobs. Using data by 100,000 people over 10 years, the survey has calculated BAME employees to be paid a total of £3.2 billion less than white colleagues every year. The difference in pay largely represents differences in qualification levels. The calculation takes into account various factors including contract types, education level, degree attainment and industry sector. The group most affected by the “pay penalty” are black male graduates. According to the report, this group of people are paid an average of 17% or £3.90 an hour less compared to fellow white employees. “A record number of young BAME workers have degrees, and a record number are in work,” said Kathleen Henehan, research and policy analyst at the Resolution Foundation. “However, despite this welcome progress, many… face significant disadvantages in the workplace.” “After the successful steps taken to expose and tackle the gender pay gap in 2018, we now need greater accountability on the ethnic pay gap in 2019. The government can make this happen by requiring large firms to report their BAME pay gaps alongside the reporting they’re already doing on gender.” “The results should give firms an extra incentive to tackle these issues,” she added. The report is calling on the government to act on the new initiative requiring companies with over 250 employees to publish gender pay gaps to publish data on ethnic groups. A government spokesperson said: “We’ve introduced new laws to help companies ensure the make-up of their boards and senior management is representative of their workforces and we’re currently consulting on proposals for mandatory ethnicity pay reporting as part of a series of measures to help employers tackle ethnic disparities in the workplace.”

The FTSE 100 has opened roughly 0.5% higher on Thursday morning following the Christmas break. This is following an overnight surge on Wall Street as the Dow Jones had a strong recovery with a 1,000 points jump. New York’s Dow Jones Industrial Average increased by 5% – 1,086 points – yesterday. This is the first time the index has increased by over 1,000 points in a single session. The S&P 500 and NASDAQ were also up. This is following Wall Street’s poorest ever Christmas Eve performance. MasterCard’s promising retail data drove the New York rally. The rally knocked onto Japan as Nikkei increased by 4% overnight. Chinese stocks, however, were lower. French Cac 40 opened over 1% higher, but the German Dax dropped behind.

The FTSE 100 has opened roughly 0.5% higher following the Christmas break.

Mike van Dulken, Head of Research at Accendo Markets, commented on the data: “Data suggests heavier than usual post-Christmas equity buying and rebalancing of US portfolios, likely exacerbated by recent share price declines offering more attractive entry points (oversold?) being capitalised upon while ‘normal’ trading volumes are holiday-thinned. The bounce by consumer discretionary and Tech supports this theory.” Despite the positive open, UK retailers experienced a poor turnout at the Boxing Day sales. Indeed, the number of people visiting retailers on Boxing Day dropped for the third year in a row. The final sales boost from the festive period was not enough to end the year on a high for UK retail. Average footfall across the UK dropped 3.1%, with out of town retail parks and shopping centers suffering more than the High Street. This poor turnout and footfall may be considered an indication of a greater sector-wide crisis, spurred on by Brexit, smarter shopping habits and changing weather patterns. The rising shares follow a shocking pre-Christmas run. Instead of seeing a “Santa rally”, they experienced a “Santa rout”.

Global Infrastructure Partners (GIP) is selling a 50.001% stake in Gatwick airport to Vinci Airports. The deal is expected to close in the middle of next year and Global Infrastructure Partners will still keep a 49.99% stake in the group. Vinci is not new to the airport business and owns Lyon-Saint-Exupéry Airport, Nantes Atlantique and Grenoble Alpes Isère in France as well as airports in Portugal and Japan. “We expect the transaction to be completed by the middle of next year, with the senior leadership team remaining in place,” said Michael McGhee, a partner at Global Infrastructure Partners. “Their focus, along with everyone at Gatwick, obviously remains on doing their very best for customers over the busy holiday period after the challenges of recent days.” Nicolas Notebaert, who is the president of Vinci Airports, said: “As Gatwick’s new industrial partner, Vinci Airports will support and encourage growth of traffic, operational efficiency and leverage its international expertise in the development of commercial activities to further improve passenger satisfaction and experience.” Gatwick faced heavy disruption in the runup to Christmas following reports of drone sightings. A couple were arrested in relation to the drone sightings but were released without charge. Chief Executive of Global Infrastructure Partners, Stewart Wingate, said of the drone chaos caused at Gatwick: “I know this unprecedented criminal activity caused huge inconvenience to thousands of people – many of whom missed important family events in the run up to Christmas. We have appreciated the understanding and tolerance shown at what was a really challenging time for everyone, and we are grateful that passengers recognised that we should never do anything that might jeopardise their safety.” Gatwick is the eighth busiest airport in Europe based on passenger numbers. Around 46 million passengers travel to and from 74 countries through the London-airport every year.      

The number of people visiting retailers on Boxing Day has dropped for the third year in a row. The disappointing turnout reflects the broader sector-wide crisis that has hit retailers in 2018. Clearly the final sales boost from the festive season is not enough to end the year on a high. Experts have said that the average footfall across the UK dropped by 3.1%. This is despite retailers offering generous discounts on their goods. The average reduction of products was a record breaking 43%, according to the Telegraph. The areas worst hit by the poor turnout are out of town retail parks and shopping centres where footfall dropped by an average of 5%. The high street, on the other hand, only saw a drop of 1.1%. A retail analyst from LovetheSales.com, Liam Solomon, commented: “Since late December discounts have remained uncharacteristically high – we’re expecting this trend to continue deep into January with better discounts, as retailers try to shrug off a tough 2018. We expect the best bargains will be predominantly in fashion and in particular warm clothing.” The poor turnout is likely to lead to prices being slashed even further by retailers as January develops.

Boxing Day is the most popular day to shop over the festive sales period, according to Barclaycard.

There were some shoppers who had risen early to queue and make the most of the sales. Indeed, managing director of Harrods, Michael Ward, said that customers were served hot drinks as they queued outside waiting for doors to open. “We’ve already got queues outside every aspect of the building – people have been here since seven o’clock,” he told Sky News. “Our butlers are just out serving them with teas and coffees – so we’re going to have a very civilised but very good sale.” With ASOS releasing a profit warning during the lead up to Christmas, a particularly odd time for retailers to do so, we took a look at some of the factors which have been fuelling the UK retail crisis. Brexit uncertainty aside, smarter shopping habits and changing weather patterns could also be driving poor sales. The 26^th December marks the first day of the sales. Will figures pick up if retailers slash prices even further?

The Royal Bank of Scotland (LON: RBS) has applied for a German license to prepare for a no-deal Brexit. The new license will allow RBS to retain clients and trade freely across the EU. Amid Brexit uncertainty, an estimated 37 banks have applied for European licenses. 30 of these lenders have chosen Frankfurt as the main base, where the City of London will lose approximately 800 billion (£711 billion) of assets. Hubertus Väth, the managing director of Frankfurt Main Finance, said: “All in all, we expect a transfer of €750 billion to €800 billion in assets from London to Frankfurt, the majority of which will be transferred in the first quarter of 2019.” “Banks are faced with the choice of either relocating only what is absolutely necessary or preparing for the relocation of the entire business,” Väth said. “In any case, it is clear that considerable second-round effects will follow,” he added. “Politicians have listened, promised and delivered,” Väth said. “This is a clear sign that the banks’ relocation to Germany is desired. It is a sign that is seen and appreciated.” Frankfurt has attracted jobs and operations from Barclays (LON: BARC), Lloyds Banking Group (LON: LLOY), Citigroup (NYSE: C) and Morgan Stanley (NYSE: MS).

Whilst retailers were pinning hopes on the so-called “Super-Saturday”, overall footfall fell by 0.7% on last year. Last minute shoppers were expected to spend £1.38 billion on the Saturday before Christmas, according to the Centre for Retail Research. Mark Bourgeois, UK & Ireland managing director at Hammerson, said: “There’s always an uptick in footfall at this time of the year, as shoppers start to worry about whether online orders will be delivered in time for the big day.” Hopes were pinned on the weekend to boost retailers after a dismal year on the highs street. Julie Palmer, a partner at insolvency firm Begbies Traynor, said: “As we near the end of the crucial festive period, with many retailers pinning their hopes on a final flurry of shopper activity this weekend as more are plunged into significant financial distress, to say 2018 has been a tumultuous year is something of an understatement.” “Even online, which has been hailed as the future of the sector, is not immune,” she added. This year, a number of retailers have fallen into administration or closed a number of stores with CVAs. Big fallers of the year have been ASOS, whose shares recently crashed 40% following a profit warning issued amid the run-up to Christmas. Profit warnings have also been issued by Primark, M&S, Bonmarche and Sports Direct. Springboard’s insight director Diane Wehrle has said that people are spending less this Christmas. “In the past year, wages didn’t increase with price rises,” she said. “Now that has changed a bit, wage inflation is above price inflation, but the problem is consumers have had to spend a year funding that through savings, wages, loans or credit cards, so now they’re conscious they don’t want to spend too much as they have to pay back some of those loans.”  

S4 Capital has completed a merger with Mightyhive, in a blow to advertising giant WPP (LON: WPP). WPP’s former boss Sir Martin Sorrell announced the merger’s closing today, whilst also revealing three new board members. “S4 Capital is now in a position to compete for comprehensive digital-first mandates at the highest level and is beginning to succeed meaningfully,” said Sorrell. Peter Kim, the MightyHive Chief Executive, and Chief Operating Officer Christopher Martin have joined S4 Capital’s board. The boss of Stanhope Capital, Daniel Pinto, will also join the group’s board. Sorrell was ousted as the WPP boss earlier this year following misconduct allegations. “Obviously I am sad to leave WPP after 33 years. It has been a passion, focus and source of energy for so long. However, I believe it is in the best interests of the business if I step down now,” he said at the time. Since leaving the group, Sorrell has founded his own advertising agency, S4 Capital. S4 Capital’s acquisition of Mightyhive was worth $150 million (£117 million) and was the group’s second deal. “This represents a significant step in building a new age, new era, digital agency platform for clients,” said Sorrell about his first deal at S4 Capital. “The merger with MightyHive marks an important second strategic step for S4 Capital. The peanut has now morphed into a coconut, and is growing and ripening.” “Clients of all kinds want services delivered faster, better and cheaper, by more agile and responsive organisations,” he added.