Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News same week, but another
Speaker 1: episode of In the City of podcasts from Bloomberg about
Speaker 1: the stories shaping the city of London.
Speaker 2: I'm Francin Laqua and I'm David Merritt.
Speaker 1: David were in the London studio again because we have
Speaker 1: all these chief executives wanting to come to talk to
Speaker 1: us ahead of the UK election.
Speaker 2: That's right, proper election fever. We're in the thick of it.
Speaker 2: I think it's safe to say here at Bloomberg HQ
Speaker 2: and the city and as you say, lots of people
Speaker 2: coming through to talk to us, and we notice that
Speaker 2: we have the boss of one of Britains big It's
Speaker 2: retailers Curries in the building, so we had to put
Speaker 2: them aside into the studio and you because this is
Speaker 2: somebody who is hearing on the ground what are consumer's saying,
Speaker 2: what is the mood out there? And the economy is
Speaker 2: such a big subject in this election and he's got
Speaker 2: a great read on it.
Speaker 1: Yeah, he sees everything firsthand because they sell of course
Speaker 1: items such as vacuum cleaner's, laptops iPhones to British consumers.
Speaker 1: So he's going to talk to us about the customer
Speaker 1: living crisis, how people are spending differently, and what he's
Speaker 1: expecting from labor policies.
Speaker 2: I think he's been a conservative donor in the past,
Speaker 2: so prospects not looking so great for the Tories. Of
Speaker 2: course at this moment when we were taping this, if
Speaker 2: the polls are accurate, so what is his view on
Speaker 2: the Tory chances, but also how he might be embracing
Speaker 2: a potential new labor government.
Speaker 3: Welcome to the City of London, the city of the
Speaker 3: City of London's mind, the gap.
Speaker 2: Between the and the financial hearts of the country, the city,
Speaker 2: the city. Welcome to in the city. Then clear of
Speaker 2: the doors.
Speaker 1: What we have with us Alex boaldarka chief executive Curries
Speaker 1: now for international listeners, and we do have many currieres
Speaker 1: is and electricals, retail or not. Something we'd have to
Speaker 1: explain to anyone who lives in the UK. They're everywhere, Dave,
Speaker 1: including all around your house. I'm a customer. I don't
Speaker 1: know whether I need a disclaimer for that, but I
Speaker 1: am a good currier's customer.
Speaker 3: Well, welcome to in the city act, thank you very much,
Speaker 3: and I'm delighted to hear we've got some customers as
Speaker 3: well as some interrogators in.
Speaker 1: The room and talk to us a little bit about
Speaker 1: what kind of economy you see in the UK right now.
Speaker 1: So we're, you know, two weeks three weeks from an election.
Speaker 1: The consumer has been feeling a little bit of a pinch,
Speaker 1: have a cost a living crisis. The economy is kind
Speaker 1: of better than expected, but flatlining.
Speaker 3: The UK consumer definitely still speaking in general terms, feels
Speaker 3: hard pressed and is very conscious of a cost of
Speaker 3: living crisis and is watchful of their spending, particularly on
Speaker 3: bigger ticket discretionary items such as the technology that carries sells.
Speaker 3: All of that's certainly true. However, if you wanted to
Speaker 3: take a more optimistic view of the prospects for the
Speaker 3: UK consumer, you could, I mean, for start, consumer confidence
Speaker 3: as measured by GfK and the like has been up
Speaker 3: pretty much with the exception of two months every month
Speaker 3: for twenty two months. Real wages are continuing in growth,
Speaker 3: Employment is still high, and retained savings are still relatively
Speaker 3: high for this stage of the cycle. And all of
Speaker 3: that is starting to translate into a more benign environment
Speaker 3: for selling the sort of stuff that carries sells.
Speaker 2: How important is the inflation number to your business and
Speaker 2: to that sense of sentiment? The data taping this, we've
Speaker 2: seen finally, for the first time for years, inflation out
Speaker 2: at the two percent Target's that a big milestone, you
Speaker 2: think in terms of like changing the mood out there
Speaker 2: among consumers.
Speaker 3: I mean, the mood has already been improving amongst consumers
Speaker 3: as I say that, whether you look at stated consumer
Speaker 3: confidence or whether it's confidence in one's own finances or
Speaker 3: propensity to buy bigger ticket items, all of that has
Speaker 3: been trending upwards for getting on for two years now.
Speaker 3: But undoubtedly, I mean real wage growth, both perceived and actual,
Speaker 3: is really important for consumer confidence and their willingness to
Speaker 3: loosen the purse strings, and so inflation coming down to
Speaker 3: the target will definitely help.
Speaker 2: Yeah, we had a technical recession here in this country.
Speaker 2: Did you notice that we were in this contraction route?
Speaker 2: Did it feel like we were going to reverse or
Speaker 2: was that more of a kind of technicality. Really, and
Speaker 2: broadly the economy is on a up pertic.
Speaker 3: Well, if the technology market can be a useful proxy
Speaker 3: for customers big ticket spending, discretionary spending, then the technology
Speaker 3: market has been in decline for every year for four
Speaker 3: years in the UK since the pandemic. So it certainly
Speaker 3: hasn't felt like a technicality for those of us who
Speaker 3: sell technology, no, because we've been running up a down
Speaker 3: escalator for the past year. When it comes to when
Speaker 3: it comes to financial performance. Now that said, I mean,
Speaker 3: in Curry's case, we've been able to show four years
Speaker 3: of improving financial performance in the UK through self help
Speaker 3: on margin and on cost, even in the absence of
Speaker 3: many sales growth. But looking forward, I think this is
Speaker 3: the year where, in part because of recovering consumer sentiment,
Speaker 3: but also in part because of various opportunities specific to us,
Speaker 3: this is a year where we can see a realistic
Speaker 3: prospect of a return to market and market growth and
Speaker 3: the sales growth for US as well.
Speaker 1: But this is what laptops did. People spend a lot
Speaker 1: on laptops and technology to upgrade their homes during COVID,
Speaker 1: and so is that a natural kind of trend.
Speaker 3: That's one factor. Yeah, And the replacement cycle, I mean,
Speaker 3: if it's roughly four years and it varies between products,
Speaker 3: but many pandemic era purchases will be coming up coming
Speaker 3: up for a mule, Yeah, But there are others AI
Speaker 3: is you know it may as we managed to get
Speaker 3: this far into the podcast without mentioning a we are AI. There,
Speaker 3: you go very convincingly from a yeah. But AI is
Speaker 3: going to have many effects in direct and indirect on
Speaker 3: businesses like us. But it does provide us with more
Speaker 3: things to sell. So we've already seen, for example, AI
Speaker 3: powered mobile phones take off quite nicely, and consumers are
Speaker 3: starting to see how this this rather abstract and maybe
Speaker 3: slightly frightening technology can be useful to them, for example
Speaker 3: with simultaneous translation or with help making them world class photographers.
Speaker 3: That there are real use cases coming from AI now
Speaker 3: which are meaningful to consumers.
Speaker 2: How excited are you about the election? We're all very
Speaker 2: excited around here two weeks ago. The result doesn't look
Speaker 2: to be in much doubt at this point. But what's
Speaker 2: going to be the fallout from that? I mean, it's
Speaker 2: sort of steady as they goes with the Labor Party
Speaker 2: manifesto in terms of the economics. You know you've donated
Speaker 2: to the Conservatives in the past, But how are you
Speaker 2: feeling about and the prospect of a new government.
Speaker 3: Well, I mean, the first thing is my job is
Speaker 3: to make sure that Curries is successful whoever's in office,
Speaker 3: and so that's how that's how I approach it. Now,
Speaker 3: there's a few things that businesses tend to look for,
Speaker 3: and Curries included. I mean the first is mood music.
Speaker 3: I mean this matters and pro business mood music is
Speaker 3: now coming out of the current labor party in a
Speaker 3: way that perhaps wasn't wasn't always the case. I mean second,
Speaker 3: and you will be you'll forgive me because I'm sure
Speaker 3: you're tired of people like me banging on for the
Speaker 3: need for stability. It's on every business leader's lips, but
Speaker 3: it's true. I mean, wild swings in policy, interest rates, currencies,
Speaker 3: prices aren't Regulation aren't helpful, nor is a more general
Speaker 3: sense that the UK's are risky or a difficult place
Speaker 3: to do business. And so to the extent that you
Speaker 3: know there are, in the words of one US investor,
Speaker 3: that there are grown ups in charge on both sides
Speaker 3: of the aisle.
Speaker 2: Now.
Speaker 3: As well as providing a stable environment, there are also
Speaker 3: there are also things any government should be able to
Speaker 3: do to provide the conditions for growth. And both parties
Speaker 3: are intent on growth as a as a priority, which
Speaker 3: is good and we would argue that there are things
Speaker 3: that anyone should, any party should do on skills, on infrastructure,
Speaker 3: on taxation, on regulation, and on the rule of law.
Speaker 3: By the way, when it applies to retail.
Speaker 1: Colleagues, what are you expecting terms of workers' rights under
Speaker 1: a labor government? So you've increased actually base pay for
Speaker 1: a lot of your employees, I think by almost ninety percent,
Speaker 1: if not more, for the start of twenty twenty.
Speaker 3: Four, by twenty nine percent over the twine over the
Speaker 3: past three years.
Speaker 1: Based colleagues, but this year nine percent.
Speaker 3: That's right. As curries, we're a retailer, and retailer is
Speaker 3: the largest private sector employer in the country. I mean,
Speaker 3: we've got three million jobs in our sector, and we
Speaker 3: encourage were not the only retailer who are determined to
Speaker 3: provide really good, secure jobs that are often many people's
Speaker 3: first job in the employment ladder, and provide them with
Speaker 3: a good first step in that career ladder.
Speaker 1: Do you think you'll have to increase pay further under
Speaker 1: a labor government.
Speaker 3: Let's see, I mean, the national minimum wage has risen
Speaker 3: significantly in recent years. I mean we've said and we've
Speaker 3: acted on it that we want to keep ahead of
Speaker 3: that and to make sure that our colleagues both on
Speaker 3: their pace pay, but also by the way, on their
Speaker 3: variable pay and on their other benefits, are well rewarded.
Speaker 3: I mean, I think if we take a step back
Speaker 3: for a moment, I think any government would do well
Speaker 3: to recognize that modern businesses don't necessarily have to be
Speaker 3: compelled to treat their colleagues well. And it's not just
Speaker 3: because we're nice guys, but for us to attract and
Speaker 3: retain top talent, as any business must do, you have
Speaker 3: to treat your colleagues well. It's a commercial imperative as
Speaker 3: well as the right thing to do, which is why
Speaker 3: businesses like Curries invest so much not just in reward,
Speaker 3: but in development, in learning, in training and communications, in leadership.
Speaker 1: But isn't it different if a government mandate it?
Speaker 3: Well, I mean clearly that law the law is the law,
Speaker 3: and we're going to We're going to more than abide
Speaker 3: by that, as we have done with base rates of
Speaker 3: colleique pay. All I would say is there's clearly a
Speaker 3: balance to be struck here, and here Curries takes the
Speaker 3: same view as our industry as articulated by the BRC
Speaker 3: and in our trade body that you know, further significant
Speaker 3: increases to the national minimum wage should be done with caution,
Speaker 3: because clearly there is a balance here between wanting to
Speaker 3: protect and fairly reward people but also providing incentives for
Speaker 3: further job creation for businesses. And as I say, there
Speaker 3: are many jobs at stake in retail, there are three
Speaker 3: million of them.
Speaker 2: I just want to ask you about the broader UK market.
Speaker 2: You'll remember that, you know, you're one of the two
Speaker 2: fifty companies of the biggest two hundred fifty companies publicly
Speaker 2: traded in Britain. You've had an approach this year for
Speaker 2: the US hedge fund, Elliott. What does that say about
Speaker 2: the valuations across the whole of the UK market. There's
Speaker 2: a lot of commentary around Britain being undervalued compared to
Speaker 2: other sizable comparable economies. Is Britain cheap at the moment?
Speaker 2: Companies like yours too cheap? That's why the US hedge
Speaker 2: funds are circling.
Speaker 3: What you could make that argument? I mean, in one
Speaker 3: fact is that we've recently sold our Greek business, and
Speaker 3: if the whole of Curriers was valued at the at
Speaker 3: the same level as we sold the Greek business, for
Speaker 3: or the share price will be twice what it is today.
Speaker 3: So I mean that's one. That's one fact, but there
Speaker 3: there are obviously plenty of others, and some of which
Speaker 3: are beyond the control of any one company. I mean,
Speaker 3: I can't not much we can do about thirty consecutive
Speaker 3: months of net outflows from UK equities, for example. It's
Speaker 3: not in my power to do something about the unnecessary
Speaker 3: friction of the stamp duty on share sales, for example.
Speaker 3: But all of that said.
Speaker 2: I mean, there are all these measures the government had
Speaker 2: tried to the current government are trying to put in
Speaker 2: place to improve all of that. Are they to reverse
Speaker 2: the flows? But of course they're about to potentially leave office.
Speaker 2: So do you think they're asking that the government has
Speaker 2: a role in this? Don't they? In terms of regulation?
Speaker 3: And well, of course. But I mean we go back
Speaker 3: to the things we were talking about before. I mean, ultimately,
Speaker 3: the UK equity market is largely There are some technical
Speaker 3: factors there, like stamp duty on shares for example, but
Speaker 3: ultimately the UK equity market is a reflection of the
Speaker 3: broader UK economy and if there's a if the UK
Speaker 3: economy is stable and seen as a good place, a
Speaker 3: good place to do business. If the skills, the infrastructure,
Speaker 3: the tax the planning, the regulatory regimes are all in
Speaker 3: good Nick Will, that will have a beneficial impact on
Speaker 3: UK equities as well. But I do want to draw
Speaker 3: us a distinction here. You won't find me whining about
Speaker 3: the state of UK equities when it comes to the
Speaker 3: Curry's share price. I see it as my job to
Speaker 3: make sure that we're doing the things to make sure
Speaker 3: that investors want to invest in our share and in
Speaker 3: our case is quite straightforward. The UK business Curries in
Speaker 3: the UK has been showing great momentum for the past
Speaker 3: four years. We need to keep that going. We've had
Speaker 3: some issues with our international business. That's getting back on
Speaker 3: track and we need to keep that going. And we've
Speaker 3: got now rock solid balance sheet and liquidity and we
Speaker 3: need to keep that. Now. Happily, all three of those
Speaker 3: things are heading in the right direction. It's my job
Speaker 3: to make sure that they continue doing so, and when
Speaker 3: they do, that will ultimately be rewarded by the share price.
Speaker 1: Was it a nightmare having Elliott on your back?
Speaker 3: No? I really don't see it that really, No, No,
Speaker 3: not at all. Firstly, it was actually pretty flattering. They're
Speaker 3: no fools, and they saw value as we do in
Speaker 3: our business, and they've backed our prospects and our plans.
Speaker 3: So that was the first thing, now that said, you know,
Speaker 3: the board decided that the two bids substantially undervalued the business.
Speaker 3: And I suppose that's the second thing that's flattering is
Speaker 3: when you get the board and eight of the top
Speaker 3: ten shareholders within twenty four to forty eight hours whatever
Speaker 3: it was, coming out publicly and saying no, there's a
Speaker 3: lot more in the tank in this business. We believe
Speaker 3: in the current plans and we want we want to
Speaker 3: see them realized. That was good validation for all the
Speaker 3: hard work of all our thousands of colleagues as well.
Speaker 3: So I chose to experience it as flattering and whimistic. Well,
Speaker 3: that's part of the job, right, and these things can
Speaker 3: be as distracting as you allow them to be. Without
Speaker 3: interest from from private equity has gone away for now.
Speaker 3: But honestly, I didn't spend I didn't spend a great
Speaker 3: deal of my time sitting speculating and worrying about it.
Speaker 3: I spend my time on the things that we can control,
Speaker 3: and as we're just talking about there's plenty that we can.
Speaker 2: What one thing that some companies have decided to do
Speaker 2: to fix the valuation problem is to move the listing
Speaker 2: to New York. Is that cross your mind at all?
Speaker 3: No, it hasn't. We're admitted to the London stock extrage
Speaker 3: were I can you can have it here first? An
Speaker 3: exclusive for Bloomberg. I know we're committed to the London
Speaker 3: Stock Exchange and we're committed to making it work here.
Speaker 1: What do you want labor to do when it comes
Speaker 1: to the stock exchange attracting more capital FDI and really
Speaker 1: supporting I guess you're growth well.
Speaker 3: I think, as I say, there's some technical things that
Speaker 3: any government can do, I mean taking stamp duty of
Speaker 3: share shared dealing seems like a sensible removal of unnecessary friction.
Speaker 3: But more than that, I think there's there are plenty
Speaker 3: of speculation about what might might or might not be
Speaker 3: done to encourage or other encourage UK based pension funds
Speaker 3: to invest more of their money in UK equities and fine,
Speaker 3: but I think more more generally, as I say, UK
Speaker 3: equity markets are a reflection of UK PLC, reflection of
Speaker 3: the economy at large. And if there's a stable, a
Speaker 3: stable environment where the UK is not seen as a
Speaker 3: risky or a volatile place to do business, and when
Speaker 3: skills and infrastructure and planning and regulation and tax are
Speaker 3: all in good shape. That will translate to a healthier
Speaker 3: stock market.
Speaker 1: Alex. When you look at you know what happens after
Speaker 1: the election. What's the most pressing concern for businesses in
Speaker 1: the UK under a labor government?
Speaker 3: I think the most pressing concern for any for any
Speaker 3: business under any administration is for the conditions for growth
Speaker 3: to be there. Everyone agrees that growth is essential and
Speaker 3: to be able to provide that growth, the government needs
Speaker 3: to provide the right conditions for it. It needs to
Speaker 3: provide the right stable environment first of all, and avoids
Speaker 3: of unpleasant shocks and the perception that this is a
Speaker 3: risky place to do business. But then attend to making
Speaker 3: sure that the skills and the infrastructure, and the taxation regime,
Speaker 3: and the planning and the regulation and energy costs and
Speaker 3: all of the all of the various things that any
Speaker 3: government needs to do to enable businesses to prosper and
Speaker 3: to grow, to allow business to be a powerful force
Speaker 3: for societal good, which I believe I can can and
Speaker 3: should be. That's the regime that governments need to put
Speaker 3: into place.
Speaker 1: Thank you so much for joining us.
Speaker 3: My pleasure.
Speaker 1: Thank you, and that's a long list, Alex. Thanks for
Speaker 1: listening to this week's In the City from Bloomberg. This
Speaker 1: episode hosted by me Francis Laqua and David Merritt. It
Speaker 1: was produced by Summersati production support and sound designed by
Speaker 1: Moses and dam Brendan. Francis Newman is our executive producer.
Speaker 1: Sage Bauman is Head of Podcasts. Special thanks to Alex
Speaker 1: Baldoc and Sabam Meddings. Please subscribe, rate, and review wherever
Speaker 1: you listen to podcasts.