Business Briefing

Record music sales soothe the ‘pandemic blues’

Inflation slows to 0.4%, the worst is yet to come for retail, and other breaking business news

1

Entertainment 

UK vinyl sales to overtake CDs for first time since 1987

It was a record year for the music industry in 2020 with global sales amounting to the tune of $21.6bn (£15.7bn) - the highest figure since 2002. 

According to the IFPI, which represents the recording industry, global music revenues increased by 7.4% and paid streaming revenues rose by 18.5%. With sales hitting a high note last year, music helped soothe the “pandemic blues”, says Reuters. In its global report, the IFPI added that “we have once again been reminded of the enduring power of music”.

In the UK, pandemic music buying habits have accelerated the revival of the classic LP, The Guardian reports. And record labels are “on track” to make more money in 2021 from the sale of vinyl than the “once-mighty” CD for the first time since 1987. 

2

Economy 

UK inflation slows to 0.4% as clothing and car prices fall

The UK’s inflation rate had an unexpected fall in February - driven by lower prices for clothing, second-hand cars and toys. In its latest consumer prices index, the Office for National Statistics (ONS) said inflation slowed to 0.4% last month from 0.7% in January. City economists had expected a “slight uptick to 0.8%”, The Guardian reports. 

Jonathan Athow, ONS deputy national statistician, said a fall in clothing prices helped to ease inflation in February - which is “traditionally a month where we would see these prices rise”. The impact of the Covid-19 pandemic has “disrupted standard seasonal patterns”.

Compared with the same month last year, clothing prices dropped by 5.4% in February - the largest fall in more than a decade. “Cheaper clothing largely reflects lower demand, with people stuck at home,” says the FT.

3

Retail

11,000 outlets shut in 2020 - and 18,000 more could follow

More than 11,000 outlets in the UK shut their doors permanently last year and experts are warning that the worst is yet to come for the retail sector. 

In its 2020 report, the Local Data Company (LDC) revealed that 9,877 chain premises and 1,442 independent shops, restaurants and leisure venues closed for good across England, Scotland and Wales in 2020. 

With the coronavirus crisis hammering the high streets, locations across Britain “may not yet have felt the full impact of the pandemic”, Retail Week reports. It’s predicted that up to 18,000 more outlets could be vacated this year.

Lucy Stainton, head of retail at LDC, expects to see the “state of play in terms of vacancy rates and net change worsening over the course of 2021 and 2022 before levelling out”.

4

Economy 

UK to get post-Brexit boost from Abu Dhabi investment

A multibillion-pound partnership has been agreed between the UK and the United Arab Emirates which will see investment in British life sciences, health, technology, clean energy and infrastructure.

Delivering a “significant post-Brexit boost” to Prime Minister Boris Johnson, it’s suggested that the overall investment from Abu Dhabi state fund Mubadala could be up to £5bn, the FT reports. While the exact size of the total investment was “not clear”, officials say that the $232bn (£168.9bn) Abu Dhabi fund “only deals in big numbers”. 

5

Automotive

Geely revs up challenge to Tesla 

Geely, China’s biggest carmaker, has launched a premium electric vehicle (EV) brand which it hopes will rival Tesla. Under the Zeekr brand, Geely will develop and manufacture high-end EVs and it’s expected that deliveries will begin in the third quarter of 2021.

While Geely aims to better compete with market leader Tesla on its home turf, it will face “fierce competition” from Chinese groups Nio, Xpeng and Li Auto, says the FT. Yale Zhang, founder of Shanghai-based consultancy Automotive Foresight, believes that although the venture “will be costly” for Geely, it is a “necessary move for the automaker as it seeks to take on Tesla”. 

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