14/03/2018 BBC Business Live


14/03/2018

A look at the global business stories.


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You are with business life.

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You are with business life. Taking

action over Russia, the British

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Government prepares its response to

the nerve agent attack on a former

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spy. Live from London, that is our

top story, Wednesday the 14th of

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March.

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Theresa May weighs up sanctions and

seeks international support as

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Moscow ignores a deadline to explain

how a highly dangerous weapon ended

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up on British streets. Also in the

programme, some of the biggest names

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in the world of technology are

paying tribute to the renowned

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British scientist Stephen Hawking,

who has died at the age of 76.

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Despite a downbeat day in Asia,

markets in Europe is mixed. Adidas

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one of the biggest movers to the

upside and we will explain why. And

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a blooming idea. Canon Floom

standout? And 1p and 2p coins could

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be scrapped. Australia and Sweden

have done it. Would you like to see

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the end of copper coins, get in

touch.

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2p or not 2p, that is the question.

One of the many we are asking today

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on business life. Welcome to the

programme. Let's start with the

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British Prime Minister considering

what action to take against Russia

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after failing to receive an

explanation over how energy -- nerve

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agent thought to be Russian-made was

used to poison a former spy. Russia

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has failed to meet a deadline to do

so. They have denied any

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involvement. The backing of Donald

Trump and the EU have also said

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Britain can count on its support.

The trading relationship going back

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many years, with quite a bit. If you

look at 2016, it came in as $40

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billion. Sanctions could hurt links,

including with oil giant BP, for

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example, metals company EN. And

money flowing into Premier League

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football clubs through Chelsea and

Arsenal through Russian backers. The

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US and UN would have to do follow

suit as they did when the annex on

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the Premier in 2016 happen. Further

damaged by restrictions and

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sanctions, many remain in force.

Freezing assets such as bank

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accounts and property. Travel bans

and export on equipment that could

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be used by the oil industry or

military. Russian diplomats could be

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expelled, cut off from the Swift

system, international banking

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system. It is thought that is

unlikely. What will happen, Ben?

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Philip is with me. With the business

advisory firm GDW. Potential

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targets, when you are advising

business, what are you telling them?

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Increased compliance risk. Let's

look at the options. Balancing not

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hurting business, alienating the

Russian population, hitting the

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Russian... Asset freezing on

high-ranking officials. One has a

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flat overlooking the Ministry of

Defence in London. Confiscate that,

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you can. Things haven't been

sanctioned like banning Russian

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media. Like Russia Today. Could lead

to a ban on media organisations like

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the BBC. Make it harder for

companies to pass the due diligence

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test. Use the unexplained wealth

orders to hit large properties owned

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by Russians in London. The list is

long. The trick is to get it right

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without hurting UK business.

Let's

pick that time. Two things, one is

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how to approach the sanctions to

have sufficient impact. And not to

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damage UK interest. Sanctions would

need collaboration with the US?

It

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is not there at the moment,

collaboration. Lukewarm statements.

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We have seen lack of cohesion

between UK and EU partners. I think

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what we had posed Premier has

dissolved. It would be hard to build

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a coalition to impose broad new

sanctions.

What about protecting UK

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interests? We know business is

intertwined. Russia trades with the

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UK. How do you impose sanctions that

are not going to come back and hope

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to?

You have to be surgical.

Sanctions are an inconvenience for

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Russia. The drop in oil prices has

been the biggest problem. If you go

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after Russians on sanctions you face

a backlash from the Russian

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Government itself. Russian

companies, UK companies in Russia,

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VP, possibly vulnerable to counter

sanctions. They are preparing mirror

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measures. -- BP. There is a risk

backlash from Russia that could hit

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UK and US companies.

We will watch

closely. You, Philip. Some comments

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coming from the European Parliament.

The European Commissioner for trade,

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Cecilia, who was on the programme 80

weeks ago, talking to Parliament and

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said EU and US trade Representative

is an intense dialogue at the moment

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about the proposed tariffs on steel

and aluminium. The EU is looking for

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an extension for the carriers signed

off by the White House last week.

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Australia has an exemption. The EU

pushing hard to get some as well.

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The US trade representative due to

publish details soon about how the

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exemptions might work. That is just

coming through from the European

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Parliament. And a line related to

the death of Stephen Hawking. We

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have had a comment from the Prime

Minister Theresa May. She says,

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Stephen Hawking was a brilliant and

extraordinary man, one of the

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greatest scientist of his generation

whose courage consumer,

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determination to get the most from

life was an inspiration. A common to

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there from Prime Minister Theresa

May, talking about the death of

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Stephen Hawking announced this

morning.

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Let's take a look at some of

the other stories making the news.

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Sportswear giant Adidas says sales

and profit will slow this year.

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The firm which has seen its shares

fall 15% in the past six months,

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says it plans to buy back up

to $3.7 billion worth of its shares

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over the next three years -

that's almost 9% of its share

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capital.

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Last year operating profits grew

to just over $163 million.

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The French Finance Minister says

he'll take legal action

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against Google and Apple

for what he called

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"abusive practices".

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In a radio interview,

Bruno Le Maire said he would take

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action over the way the tech giants

unilaterally impose prices

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and other contractual terms

on software developers.

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Neither company has yet responded.

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And a gender pay row

concerning the Queen -

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that's the fictional monarch.

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British actress Claire Foy,

who played Queen Elizabeth

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in the Netflix drama The Crown,

was paid less than her

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co-star Matt Smith,

who played Prince Philip.

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The producers said it was

partly because Matt Smith

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was better known at time of casting.

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More tributes to Stephen Hawking a

little later. Coming in as you would

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expect from right around the world.

Before that, news this morning from

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Cathay Pacific, Hong Kong flagship

airline, first back-to-back annual

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losses since founded back in 1946.

The airline revealed last year it

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made a loss of about 161 million US

dollars. Suggested intense

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competition from local rivals is to

blame. Felicia in Asia, the airline

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competition is pretty tough. Eating

into profits

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I who survive the airline of the

time.

Taking a beating. Asia's

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biggest international airline.

Double the amount it lost in 2016.

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The big reason is it is paying for

one-way bets in fuel contracts. The

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largest expense for airlines. Has to

do with not just premium carriers

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from the Middle East, Singapore

airlines for example, but budget

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airlines. It was the only way for

Chinese travellers to travel to the

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rest of the world but now the budget

airlines and other carriers are

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expanding to other parts of Asia and

the US. Overall, Cathay has seen an

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improvement in its overall business

performance. Cut

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more covered a man.

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-- more cargo demand.

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There is Australia and Hong Kong.

Jitters in Asia today. About the

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joys of the new Secretary of State,

the concern he is much more on the

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same page as Donald Trump when it

comes to tariffs as Rex Tillotson

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was. That was the sentiment in Asia.

In Europe, all the main markets are

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higher. Some stocks doing well like

Adidas. They have announced up 5%

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today in Europe. Now, Wall Street.

On Wednesday, it is all about US

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shoppers. In January, the holiday

hangover worse than many analysts

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expected as Americans chose to stay

home instead of spending. The hope

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is that retail sales will recover in

February after hitting an 11 month

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low last month. Car sales is a

headwind. US car-maker said they saw

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sales decline in February. Partially

due to the fact that interest rates

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for car loans have been rising. A

big industry research firm said the

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February interest rates on loans for

new cars should hit eight year high.

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That shows efforts by the US Federal

Reserve to raise interest rates as

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the US economy continues to grow

could finally be having the intended

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effect. Chief investment officer...

Allsorts of data, today US retail

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sales will give us an indication.

Yesterday, really sank when

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inflation report.

Lower-than-expected wage growth. --

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sanguine inflation report. Some

quite good news from the US. Now, we

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have trade friction, Donald Trump

issues making markets volatile.

The

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revolving door at the White House.

The Secretary of State sacking by a

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tweet was shocking. We knew they

didn't get on. The Pennsylvania

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result, the Democrat winning, a

strong Republican seat in the run-up

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to the midterms. Mark its time to

weigh up what this means?

It comes

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down to what will happen with

policy. Rex was a moderate voice.

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Now, more hardline. Stronger against

Iran, for instance, trade

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protectionism stronger stance.

Potential tariffs on Chinese

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imports, consumer goods, for

example. Big news and that is why

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Asia was unsettled.

So much

uncertainty, what are you advising

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clients? How can you navigate?

When

managing client portfolios, what is

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the long-term picture looking like?

The global economy is doing well. A

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lot is noise. Every year, the US

comes out on new things on tariffs,

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calling China a currency

manipulator. This is normal for

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markets. What is happening next, is

the thing. We are keeping a steady

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ship and looking at the

fundamentals.

Chinese figures?

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Acceleration in at the group --

output growth. Really helpful to

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show the global economy is doing

really well.

More later in the

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programme from you. Including copper

in our pockets or wallets. Down the

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back of the sofa? Charities would

occasionally benefit from the odd

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bits of coins and change. A lot of

you getting in touch they could

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potentially lose out. As promised,

much more coverage on the news this

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morning that Stephen Hawking has

died. All the tributes being paid to

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him on the BBC live page. A number

of videos, talking about his

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greatest achievements. By Minister

Theresa May paid tribute to what she

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describes as a brilliant and

extraordinary mind. You can see.

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Right around the world, giving an

indication of how many people he has

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touched. Pretty appropriate.

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Much more on the website.

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Still to come...

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The smell of success?

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We meet the woman behind a flower

delivery service that's taking

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on the established players

in a crowded market.

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You're with Business

Live from BBC News.

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It's a tough time to be

in the supermarket business,

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with rising costs and increased

competition squeezing margins.

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But Morrisons, the UK's fourth

largest supermarket,

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has announced an 11% rise

in its full year profits.

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However, like many of its rivals,

it is cutting jobs, with 1,500

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middle management roles set to go.

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Patrick O'Brien is UK

Research Director at the market

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research firm Global Data.

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Patrick, what do you make of the

numbers from Morrisons?

I think

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Morrisons has had a good year. It

has been on a good run now for about

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two years. It's its tenth quarter of

positive like-for-like growth. David

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Potts has done a really good job in

steering Morrisons.

In terms of the

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output them, because there is this

bitter rivalry between the likes of

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Morrisons, Tesco, Sainsbury's, etc,

what does it say about what is

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ahead? It is restructuring with

middle management going.

It's a

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competitive environment. You have

the big four, of which Morrisons is

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probably doing the best. It one

Christmas ahead of Tesco,

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Sainsbury's and Asda. It's also

competing with the discount shops

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like Aldi and liberal. Efficiencies

need to be made and we have seen a

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lot of jobs go across the big four.

Morrisons are cutting jobs in the

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store warehouse. They are looking to

do automated ordering, so they don't

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require as many shop roles.

Morrisons were quite late to be

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online game which set them back for

a number of years. It seems they are

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finally on boards, but they always

catch-up.

They have been playing

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catch up before David Potts claiming

they were very slow on the two areas

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of in supermarket retail,

convenience and online. They have

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struggled, but since David has come

in, they have rejig their strategy

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on convenience. They have a

partnership with petrol station

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forecourts and they have also

developed their online business in

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partnership with Amazon.

Good to

talk to you, Patrick. Thank you for

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your insight this morning. More

details on Morrisons and the other

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companies reporting on our website.

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You're watching Business Live.

0:19:060:19:13

The top stories. The Prime Minister

is due to announce sanctions against

0:19:130:19:20

Russia after the poisoning of a

former spy.

0:19:200:19:23

A quick look at how

markets are faring.

0:19:230:19:32

Some uncertainty around the world,

particularly relating to the United

0:19:320:19:36

States and China.

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And now let's get the

inside track on flowers.

0:19:410:19:43

The global flower industry

is worth some $105 billion.

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But 80% of all cut flowers

are bought by women.

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That surprises me because so many

men will buy them as gifts. If you

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include the ones that are bought

from a petrol station, it should be

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higher. You really are digging

yourself a whole!

0:20:110:20:14

But consumption habits are changing

and instead of visiting

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the traditional florist,

like with everything else,

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an increasing number

order their flowers online.

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Floom is an online florist

marketplace hoping to make

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the process more simple.

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I caught up with the boss Lana Elie,

and asked her what she's

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doing differently.

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Sometimes it's a time issue. Also,

ordering over the phone. There are

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so many elements when you are

sending to different places it

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becomes difficult, so it's that the

going on one platform, knowing they

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have been vetted and seeing a

variety of styles from different

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florists.

You make it sound easy,

setting up a new firm, but how

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daunting is it?

At no stage did I

question whether it was going to be

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huge and I still don't. I have

complete conviction in it and I get

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this question about fear a lot.

Where it -- I always thought, why

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would this not work? To an extent it

is a bit of insanity, but it pushes

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you through.

You are essentially the

middleman, you connect buyers with

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sellers.

Where do you make money?

It's not as if the customer is

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coming to us paying a commission on

top of they are buying. They are

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paying the same they will pay if

they went directly to an

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independent. For example, if you

went to an independent and spend

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£30, without it would still be £30.

We are sharing the margin there with

0:22:020:22:07

the florist which is 20%.

So because

you are creating more business for

0:22:070:22:12

the florist, they will take a cut on

what they make?

Exactly. They are

0:22:120:22:20

aware that 20% is going to customer

acquisition and the site. The more

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they sell, the higher quantities

they will buy and the more they will

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save on wholesale.

How do you stand

up in a market like this?

Probably

0:22:320:22:37

content because I come from a

content background. One of our first

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hires was a content creative person.

We do video in-house, we should

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photography in-house, everything we

do is about the content. Our website

0:22:480:22:53

launch with a magazine section with

it.

Everything we do is about

0:22:530:22:57

storytelling. What has been the

biggest hurdle for you? You make it

0:22:570:23:01

sound easy, but what has been the

biggest challenge you have faced?

I

0:23:010:23:06

guess fundraising and hiring. I have

hired before, but not in the way

0:23:060:23:13

that you do when you hire someone

for your own company. That took a

0:23:130:23:19

lot to learn, how to hire well and

find the right people in the first

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place, let alone then interview

them. Funding is not something I

0:23:230:23:27

have done before. We have done well,

we've always got the money we needed

0:23:270:23:33

at the right time. It's never really

been a huge issue, but there have

0:23:330:23:39

been moments of trying to figure out

how to do five-year projections, all

0:23:390:23:43

these things I have never

experienced and I was a bit out of

0:23:430:23:46

my depth. But now I have an

incredible team and you don't feel

0:23:460:23:53

those limitations any more. You hire

the right people and you overcome

0:23:530:23:56

those aspects.

The founder and chief

Executive of Floom speaking to me

0:23:560:24:05

earlier. There's talk about some of

the tributes coming in from

0:24:050:24:11

Professor Stephen Hawking. Stephen

Wozniacki said that he is above pure

0:24:110:24:19

brilliance. The chief Executive of

Microsoft said we lost a great one

0:24:190:24:28

today. He will be remembered for his

contributions to science. He made

0:24:280:24:35

concepts and theories more

accessible to the masses. He did

0:24:350:24:40

definitely translate cosmology and

physics to the masses.

0:24:400:24:47

Sean has rejoined us. Let's talk

about is the Treasury wanting to

0:24:470:24:55

scrap copper coins. How would you

feel about losing them?

Well I have

0:24:550:25:00

been sitting on my shelf. So there

was this statistic that copper coins

0:25:000:25:08

are only used once.

Just once by

millions of people though. No one

0:25:080:25:15

was carried around because they are

so heavy. Australia and Sweden have

0:25:150:25:19

done it already. A lot of people are

getting in touch. Chris says how

0:25:190:25:24

will I paid the penny slots with my

kids? A lot of you are worried about

0:25:240:25:29

charities, whether they will lose

out.

0:25:290:25:32

Quite often the charity boxes by the

till and when you pay say £2 99 for

0:25:320:25:41

something, the penny goes in the

pot. We all have piles of them. John

0:25:410:25:49

says it's about time they were

scrapped. Trevor says people

0:25:490:25:54

normally use car payments now.

Anything less than 50p goes in a

0:25:540:25:58

coffee jar. Thank you for

0:25:580:26:03

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