Tesco Reports Huge Drop In Group Profits

Tesco has reported a 23.5% drop in group pre-tax profits to £1.39bn in the six months to August 24 amid difficult times in Europe and Asia.

Sainsbury's continued to pile on the pressure as it reported like-for-like sales excluding petrol up 2% in its second quarter.

The UK market has witnessed a surge in competition with the likes of Aldi, Lidl and Waitrose challenging the other major players - Morrisons, Tesco's, Sainsbury's and Asda.

Major supermarket shares all suffered on Wednesday (prices correct 08.47)

Tesco suffered a 71% tumble in European trading profits to £55m and admitted the hit was worse than expected after conditions suffered in countries such as Ireland, Turkey and Poland.

Profits also fell sharply across Asia, down 12.4% to £314m, excluding China.

Tesco admitted the overseas woes would offset some of the benefit of its UK profits' improvement over the full year.

Tesco becomes a solo operator in China to a minor stakeholder

Chief executive Philip Clarke has spent £1bn overhauling the firm's stores to halt the decline in UK sales.

The move succeeded in the last half year, Tesco said, with sales measured as flat against the same period in 2012.

The supermarket chain announced the investment in its UK stores after being accused of taking its eye off the ball at home, focusing instead on growing its business abroad.

Sainsbury's is growing its UK market share

It recently pulled out of the US and has confirmed it is forming a partnership with China Resources to become the second-biggest player in the market there. 

Tesco, which has 134 stores in China, is to hold a 20% stake in the venture having struggled so far to get to grips with the demands of the Chinese consumer.

The deal will allow Tesco's boss to devote more time to the battle to retain its leading market share of over 30% in Britain

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Fewer Town Centre Shops Closing Their Doors

Town centre shops shut at an average of 18 a day during the first half of 2013, reflecting continuing economic and evolving social pressures on the high street.

However, the closure rate fell from more than 20 during the same period last year, according to the report from accountants PwC compiled by the Local Data Company (LDC).

It highlights the continuing change in the make-up of the high street - with a declining number of women's fashion stores and camera shops as consumers' demands change.

Charity shops, betting shops and cheque cashing outlets picked up the slack, the study suggested.

Video and photography outlets - following the insolvencies of Blockbuster and Jessops respectively - suffered most, while women's fashion was hit by intense competition from major chains and online offerings.

The study of 500 UK town centres showed 3,366 outlets closed in the six-month period, compared with 3,157 openings, a net reduction of 209 shops.

This was an improvement on the net reduction of 953 over the first half of last year.

Coffee shops and hearing aid outlets were among those increasing, the research showed, as were convenience stores as large supermarket groups move into the sector to bolster their market share.

Mike Jervis, insolvency partner and retail specialist at PwC, said: "Upticks in areas such as cheque cashing and pawnbroker reflect a society where a sizeable part of the population is forced to turn to these types of borrowing for basic needs."

Matthew Hopkinson, director of the LDC, added: "The good news is that the significant decline in chain retailer numbers in town centres in 2012 is slowing down.

"That said, closer examination of the data shows the significant ongoing decline of traditional shops, with food, beverage and entertainment taking their place.

"The pressure from online competitors, supermarkets and out-of-town providers will only increase," he warned.

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eBay And Argos Strike 'Click & Collect' Deal

eBay and Argos have joined forces to offer a "Click & Collect" service as retailers rush to cash in on the growth of online shopping.

At least 50 merchants using the online marketplace will participate in a trial of the service, which will enable eBay customers to collect their goods from a choice of 150 Argos stores.

The companies said the trial - which is expected to last six months - would deliver what customers wanted in terms of choice, convenience and speed as a study reported a continuing decline in store numbers on the UK's high streets.

Its statement cited research from Econsultancy that 40% of UK shoppers used some form of Click & Collect service over Christmas 2012.

Devin Wenig, the president of eBay said: "At eBay we continue to find new ways to connect buyers and sellers.

Argos has been transforming itself towards a stronger online offering

"Traditional retail isn't going away, it is transforming. Smart retailers are innovating, re-imagining the store and what it means to shop."

John Walden, managing director of Argos added: "Few companies move as many products as effectively as Argos through a national network of local stores, served by friendly and well-trained colleagues.

"Having pioneered Click & Collect in the year 2000, it now accounts for around a third of our business and continues to grow.

"eBay, an innovator in digital and leading online marketplace connecting sellers and consumers, is already a strong partner with Argos and a logical partner for the trial."

John Walden and Devin Wenig see strong demand for 'click & collect'

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VW Camper Van Nears End Of The Road

It carried hippies through the 1960s, hauled surfers in search of waves and serves as a workhorse across the developing world, but the long journey of the Volkswagen (VW) Camper van is coming to an end.

The company is to cease production in Brazil - the last place in the world still producing the iconic "bus" as it is known - at the end of the year.

VW said it had decided it could not change production to meet new laws being imposed in the South American country which meant all new vehicles must have air bags and anti-lock braking systems from 2014.

While output will halt in Brazil, over 10 million Volkswagen Transporter vans were made globally over the past 63 years and they remain popular because of their retro look and the "back-to-basics" driving experience they offer compared with modern vans.

Surf's up! The van is a familiar sight on coastlines world-wide

Damon Ristau, director of the documentary The Bus, which follows VW fanatics and their affections for the machine, said: "The van represents freedom.

"It has a magic and charm lacking in other vehicles. It's about the open road, about bringing smiles to people's faces when they see an old VW van rolling along."

Perhaps nothing with a motor has driven itself deeper into American and European pop culture than the VW, known for its durability - but also its tendency to break down.

Van lovers say its failures only reinforce its charm. Because its engine is so simple, it's easy to fix, imparting a deeper sense of ownership.

Many owners redesign the interior space to suit their needs

The van made an appearance on Bob Dylan and Beach Boys record album covers, among many, though in music circles it's most closely linked to the Grateful Dead and the legion of touring fans that followed the rock group across the US, the machines serving as rolling homes.

Steve Jobs is said to have sold his van in the 1970s to buy a circuit board as he built a computer that helped launch Apple.

The vehicle is also linked to the California surf scene, its cavernous interior perfect for hauling boards.

But in poorer regions like Latin American and Africa, the vehicle doesn't carry the same romantic appeal.

Yusef Islam is among celebrities to use the van for PR purposes

It is used in Brazil by the postal service to haul mail, by the army to transport soldiers and by funeral directors to carry bodies.

It serves as a school bus for children, operates as a group taxi and delivers construction materials to building sites.

Brazilians convert their vans into rolling food carts, setting up on street corners for working-class lunchtime crowds.

In Brazil it is known as the "Kombi," an abbreviation for the German "Kombinationsfahrzeug" that loosely translates as "cargo-passenger van."

Still running: owners love the camper van for its durability

Production in Germany was halted in 1979 because the van no longer met European safety requirements, meaning its future was dependent on operations in South America.

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MPs To Summon Rothschild To Mining Row Probe

Nat Rothschild, the City financier, is to be summoned by MPs to aid a probe into the governance of London-listed companies following a string of scandals involving overseas mining groups.

Sky News understands that Mr Rothschild, who engineered the arrival of Genel Energi and Bumi Resources on the London Stock Exchange, is to be asked to appear before the Business Select Committee in autumn.

A number of MPs on the Committee believe that hearing from Mr Rothschild, who stepped down from the board of Bumi last year, will be essential if they are to make recommendations aimed at avoiding repetitions of the accounting and governance problems which beset the Indonesian coal miner.

Other resources groups, such as ENRC of Kazakhstan, have also been afflicted by bitter legal and boardroom rows which have culminated in slumping share prices and disappointing returns for ordinary investors.

It is unclear whether Mr Rothschild, a Swiss resident, has already been contacted about a potential appearance before the Committee.

Its inquiry into the extractive industries sector, which was announced in July, set a deadline of earlier this week for written evidence submissions and expects to begin oral evidence sessions late next month.

An appearance from Mr Rothschild would provide the financier with an opportunity to explain the meltdown in relations between himself and the Bakrie family with whom he struck a deal to bring Bumi to the London market.

Bumi's shares have been suspended for months amid accounting concerns and an increasingly messy divorce settlement between the two groups of shareholders.

"We want to know what the corporate governance concerns are that are raised by the number of extractive industries companies listed in the UK," said one committee member.

"We need to find out whether there are reputational risks for the UK and its financial institutions in being a centre for such businesses."

Mr Rothschild, whose father is Lord Rothschild, another prominent City investor, could not be reached for comment.

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Free Wi-Fi Hotspots Allow Adult Content

By Becky Johnson, Sky Correspondent

More than half of free wi-fi hotspots in the UK allow unfiltered access to adult content, prompting calls for tighter restrictions.

Researchers went into 179 cafes, restaurants, hotels, retailers and public spaces in Birmingham, Manchester and London, and attempted to log on to websites that are legal, but have explicit content.

The study found 30% of cafes and restaurants have no filtering in place to prevent access to pornographic sites, while 20% fail to restrict customers from accessing online sex dating websites.

In addition 53% do not restrict online stores selling knives and swords, and 80% granted full access to drug-related content.

Graeme Coffey from mobile security firm AdaptiveMobile, who carried out the research, said: "For every parent across the UK this report will come as an unwelcome surprise.

"In the last two years there have been two convergent trends: a big increase in public wi-fi or 'hospitality wi-fi' and greater access to smartphones, gaming consoles and tablets with a wi-fi capability, the kind of device a child could have.

"Most people will instinctively block adult content when it comes to filtering, but what these results show is that we should also be looking at content related to drugs and violence which are just as harmful but frequently overlooked."

Seamus Kelly, the father of two teenagers, was surprised to find out the cafe he visits in Manchester's Northern Quarter has unrestricted internet access.

He told Sky News: "I think in some ways the biggest issue is not knowing what they're looking at.

"If it's at home you might have a certain amount of control over the system, but when it's out not only do you not have control but you've also got absolutely no idea what they may or may not be coming across and it is quite worrying."

Outside a cafe in south Manchester a group of 15 and 16-year-olds told Sky News they have all had smartphones from the age of 13 and frequently use wi-fi to go online.

They admitted they know people who use sites their parents would not allow them access to.

Earlier this year David Cameron backed a campaign by children's charities calling for a ban on adult content on all public wi-fi.

John Carr is among the world's leading authorities on children's and young people's use of the internet.

He told Sky News: "Virgin, O2 and Sky already block access to adult content and the other major wi-fi providers in the UK - BT,  Arqiva and Nomad - have announced their intention to do the same by the end of this year.

"There is also some talk about developing a 'kitemark' to allow shops, hotels, trains, buses that provide wi-fi access to confirm that they provide a filtered service."

A Department of Culture, Media and Sport spokesperson said: "The Government is committed to protecting children online which is why we have been working closely with the major Internet Service Providers, who have already put filters in place anywhere children are likely to be to block pornographic content.

"The main providers cover 90% of all internet connections in the UK and this report shows that our approach is working and we are ahead of many other countries in protecting children online."

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Thousands Of Pubs And Restaurants Cut Prices

Thousands of pubs and restaurants across the UK are lowering their food and drink prices - for one day only.

Up to 40 leading businesses are involved in the stunt, including the pub chain JD Wetherspoon and Pizza Hut, with up to 15,000 outlets in total said to be taking part by trimming their prices by 7.5%.

The move is part of a Europe-wide campaign - led by French businessman and lobbyist Jacques Borel - to persuade governments to reduce levels of VAT on food and drink in the hospitality sector.

In the UK, that would involve cutting VAT from 20% to 5% to give it tax parity with supermarkets.

JD Wetherspoon chairman Tim Martin wants a level playing field

The industry suggests that the taxman is missing out, arguing that more could be raised in tax from making meals out more competitive at a time of constrained family budgets.

The hospitality sector says tax parity would mean higher employment - helping arrest the decline in pubs and restaurants and prompting further investment to assist economic recovery.

Mr Borel estimates that 670,000 jobs could be created in the UK by reducing the 20% VAT burden to 5%.

The issue has long been championed by JD Wetherspoon chairman, Tim Martin, who warned earlier this month that the pub industry faced an uncertain future.

He told Sky News then: "I am pleased to report another year of progress, with record sales, profit and earnings per share, despite having paid £551.5m in taxes.

"It is unsustainable to have far higher taxes for the pub industry than those for supermarkets.

"Already, 10,000 pubs have closed and many others are suffering, through insufficient investment.

"In particular, there should be VAT equality for pubs, restaurants and supermarkets," he said.

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