Top story
Like-for-like sales of food fell 1% in the three months to July, the latest data from the British Retail Consortium (BRC) and KPMG reveals.
They fell 0.3% on a total basis the BRC-KPMG Retail Sales Monitor for July shows – below the 12 month total average growth of 1.8%.
It is also the lowest three-month average since December 2014, excluding Easter distortions.
This compared with a decrease in like-for-like non-food retail sales down 2% over the three months to July and 2.1% on a total basis – below the 12-month total average decrease of 0.6%.
Total retail sales increased 0.3% in July compared with a 1.6% increase in July last year. This July’s figure was the lowest recorded for the month since the records began in 1995.
“Success for England’s big sporting teams tends to provide a boost for food and drink sales, so the men’s cricket and the women’s football teams were both good for business in June,” said IGD chief executive Susan Barratt.
“However, the same applied last year with similar sporting success, and the year-on-year comparison was a draw with flat food and grocery sales. There has been some inflation though, meaning a drop in real terms and the underlying conditions are tight for food retailers.”
Morning update
Domino’s Pizza Group’s (DOM) interim pre-tax profits have fallen more than a quarter from £41.7m to £30.5m on group system sales up 4.7% from £616m to £645.8m.
UK and Ireland operating profit climbed 7.1% to £51.6m. International system sales – down 3.4% - proved a drag on overall results. International operating loss widened from £1.8m to £6.4m.
The results came with the announcement that David Wild, group chief executive, had told the board he planned to retire and a process to recruit a successor was progressing.
Wild said the group’s core UK and Irish markets delivered a good performance.
Digital remained a key driver of customer engagement, with online now accounting for 82% of total sales in the UK.
“Although a small part of our business, we are delivering pleasing operational improvements in our London corporate store estate,” he said.
The results statement said Domino’s continued to invest in its own digital platforms, making it increasingly easy for customers to find the best deal, place an order and pay for their meal.
Online sales in the UK grew 9.3% year-on-year and now represented 81.7% of system sales, or 90.7% of total delivery sales, it said.
Domino’s announced £10m funding last year to invest in new platforms for e-commerce and app development.
This would further improve the customer experience, while enabling it to introduce enhancements more quickly and flexibly, it said.
Collection remained an important growth area for Domino’s and was a particularly important factor when considering the location and business case for new stores.
Collection now accounted for 21% of system sales, or 30% of orders, so it remained a significant growth opportunity, the company said.
Wild said the relationship with Domino’s UK and Ireland franchisees was “very important” to long-term sustainable growth.
“We are actively involved in detailed discussions and are giving these considerable focus and attention. Whilst dialogue is continuing, new store openings are being delayed and some of our working practices are being impacted,” he explained.
Wild acknowledged the performance of the international business was “very challenging” and “trading visibility remains limited”.
The group was focused on improving its operational capability across its International markets and would provide a further update at its full-year results.
Emily Somers will join the company as chief marketing officer. She was previously vice-president of marketing and food development at McDonald’s.
Ben Stevens has stepped down as finance director of British American Tobacco (BATS).
Stevens remains employed by the company but he will retire from the group with effect from 30 September.
On the markets this morning, the FTSE 100 continued in the red, down a further 0.3% to 7,204pts.
Early risers include Applegreen (APGN), up 2.2% to 500.75p, Cranswick (CWK), up 2% to 2,626p, WH Smith (SMWH), up 0.5% to 2,028p, Britvic (BCVIC), up 0.5% to 879p and B&M European Value Retail (BME), up 0.2% to 349.8p.
Fallers so far today include Devro (DVO), off 1.7% at 201.6p, Greencore Group (GNC), down 1.5p to 205.4p, Hilton Food Group (HFG), off 1.1% at 895p, AG Barr (BAG), moved down 1% to 672p and Associated British Foods (ABF) slipped 1% to 2,369p.
Yesterday in the City
Tyson Foods (NYSE: TSN) posted third quarter sales up from $10.1bn to £10.9bn, taking earnings for the nine months from $30.1bn in 2018 to $31.5bn.
Net income attributable to Tyson climbed from $541m to $676m in the third quarter but fell for the nine-month period from $2.5bn to $1.7bn.
Tyson Foods president and chief executive Noel White said the third-quarter earnings were in line with expectations.
“Volume growth in our core retail lines continues to outpace other large food companies and the total food and beverage category, driven primarily by our new product innovation,” he explained.
“Our prepared foods and beef segments produced strong results in the quarter, while results in the chicken segment were mixed, and the pig segment was negatively affected by increased hog costs.”
The African Swine Fever outbreak continued to take its toll on hog supplies in Asia but Tyson had not yet experienced significant benefits to its pork chicken or beef categories.
“Given the magnitude of the losses in China’s hog and pork supplies, the impending impact on global protein supply and demand fundamentals is likely to be a multi-year event,” added White.
The FTSE 100 closed down a hefty 2.5% at 7.223.9pts after US President Donal Trump ratchetted up trade hostilities with the Chinese.
FTSE 100 fallers included PayPoint (PAY) which plunged 6.3% to 930p. McBride (MCB) dropped 6% to 64.2p and Marks and Spencer Group (MKS) dipped 5.2% to 190.7p. DS Smith (SMDS) closed down 5.2% at 320.9p and McColl’s Retail Group (MCLS) fell 5.1% to 65p.
Few of the sector’s stocks closed higher on the day. Majestic WINE (WINE), still enjoying a pleasant hangover from Friday’s deal with Fortress, closed up 2.2% at 276p and Glanbia (GLB) climbed 1.1% to €11.60.
No comments yet