THE NEWS WRAP: Westfield to negotiate lease reductions

Westfield joint chief executive Steven Lowy has told investors the global shopping centre giant would negotiate reductions of up to 5% on new leases, amid a weak retail market.

 

However, in a good piece of news for the shopping centre giant, Westfield reported an 18.3% year-on-year rise in net profit to $1.72 billion for the year to December, with sales at its centres in Australia and New Zealand up 2.9% on a comparable store basis.

 

“In Australia, while retail conditions have been subdued for most of the year, the business responded well and in January specialty retail sales were up about 4%,” Lowy said.

 

Goyder admits some Coles suppliers played hardball with suppliers

 

Wesfarmers chief executive Richard Goyder has said that his company will come down hard on employees who behave inappropriately, following an admission there might have been instances where employees at its Coles supermarket chain held hardball negotiations with suppliers.

 

However, Goyder also claims that recent price cuts were driven in some cases by breaking “cosy” relationships with some suppliers, which had previously led to higher prices for consumers.

 

“We’ve got 20 million customers walk through our front door every week. And five years ago, it was way too easy for suppliers to come in, put prices up and for Coles and others to put prices up. The Australian consumer effectively got ripped off in that process,” Goyder said.

 

US could lose its AAA credit rating, warns Fitch

 

Ratings agency Fitch has warned the US government’s AAA credit rating could be in jeopardy if political fighting continues over deficit-cutting measures.

 

“Implementation of the automatic spending cuts – the sequester – and a government shutdown would not prompt a negative rating action,” Fitch said in a statement.

 

“But such an outcome would further erode confidence that timely agreement will be reached on additional deficit-reduction measures necessary to secure the AAA rating.”

 

Overnight

 

The Dow Jones Industrial Average is up 1.35% to 14087.3. The Aussie dollar is up to US102.35 cents.

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