EG Group agrees the sale of the majority of its UK and Ireland business to ASDA UK businesses vulnerable due to skills shortage, says IoD survey

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, stabilised at -6 in May 2023, little changed from the previous month’s value of -5 and ending a five-month climb from a low of -64 in November 2022.

The current reading is a broadly neutral-to-negative stance, with 39% of IoD members feeling pessimistic about prospects for the UK economy in the year ahead compared to 33% feeling optimistic over the same time horizon.

confidence remaining lukewarm and the skills shortage continuing to hamper growth, it’s time to start a serious conversation about the need to give companies the investment and support needed to expand their skillset.

EG Group has announced an agreement to sell to Asda the majority of its UK and Ireland fuel, foodservice, grocery and merchandise business for an enterprise value of £2.27bn ($2.8bn).

This transaction is a transformational step for the Group and strengthens its platform to further invest in its proven and successful strategy to rollout foodservice, grocery and merchandise to create multi-purpose convenience retail sites across its estate. The Group will also accelerate its strategy to deploy emerging fuels and EV chargers, under its proprietary brand, evpoint, across the existing site network, as well as third-party locations.

The proceeds, together with the net proceeds of $1.4bn from the recent sale and lease back transaction in the US, will be used to repay debt and the Group’s net leverage will fall to below 5 times, in line with the recently announced financial policy and deleveraging strategy. The Group remains committed to achieving a net leverage multiple of mid 4 times in the near term.

EG Group will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, whilst also retaining 30 UK sites – including the first Euro Garages site in Bury – which are close to the Group headquarters and frequently used to trial innovation. The Cooplands bakery business and certain other foodservice brands will also be retained.

When asked about current pain points for their organisation, the most common concerns were UK economic conditions (52%), skills shortages/ employee skills gaps (46%) and the cost of energy (45%). These were the same top three concerns as the last time that question was asked in February 2023.

The index of director confidence in future prospects for their own organisations rose to +44 in May, up from +42 in April. 55% expected revenues to rise in the next year, compared to 19% who expected revenues to fall, giving a net positive result of +36, similar to the +37 recorded in April.

Responding to the data, Steven Mooney, Founder and CEO of FundMyPitch said: “With business

“For many ambitious organisations, whether that by startups or high potential SMEs, dedicated funding remains elusive, and this has a detrimental impact on economic growth. Culturally and operationally, the UK needs to think again about the importance of turbocharging the next generation of entrepreneurs with dedicated funding, something which is a given in markets like the US.”

Meanwhile Suid Adeyanji, CEO of RiverSafe, said: “Recruiting and upskilling staff with digital skills and security expertise remains a top priority for businesses who cannot afford to compromise in key areas such as cyber skills.”