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Inflationary pressures are building as big suppliers such as Birds Eye, Walkers and Unilever negotiate with supermarkets for price hikes but deflation still persists, the latest Grocer Price Index reveals.
There are signs in the GPI that inflation is coming down the line but price rises are scattered and deflation remains across most categories in October.
Collated for The Grocer by Brand View from over 60,000 supermarket SKUs, the GPI shows price deflation has stabilised ahead of the Christmas trading period, with annual deflation edging back out to -1.71% from -1.64% last month, having peaked at -3.07% in the month to 1 June.
Prices were also down again month on month, falling by 0.8% across the big four.
However, the slump in the value of sterling has seen prices jump in some sectors. On an annual basis inflation was again present in ambient, though only at 0.02%. Prices had edged up by 0.2% in the month to 1 October. Baby goods also saw an increase in annual prices of 2.1%, its first annual price rise in over a year.
For the full story and for all the data visit the finance section of thegrocer.co.uk/finance.
Morning update
Elsewhere on The Grocer this morning, Bulldog for Men is eyeing major global expansion following its acquisition by Edgewell Personal Care, the US-listed fmcg supplier that counts Wilkinson Sword, Playtex and Hawaiian Tropic among its brands. The British male grooming brand - which began exporting in 2010 - is already in 14 countries including Germany, Portugal and South Korea. The deal with Edgewell would provide access to 50 overseas markets, said Bulldog founder Simon Duffy. Read the story here.
London-listed marine foods and seafood processor Aquatic Foods Group has recorded a 5% slump in revenue to RMB 644.9m (£76.3m) in the nine months to 30 September. The Chinese group said in a trading update this morning that fish sales, which account for 70% of business, fell 6% despite volumes growing 3% as it reduced its prices to protect its market share in the “difficult” market environment.
Overall volumes for the first nine months of 2016 increased 3% year on year, reflecting the continued demand for its products, Aquatic added.
Revenues in the third quarter also improved by 5.1% compared with the first three months of the year and 10.6% compared with the second quarter.
CEO Li Xianzhi said: “The fall in revenue and gross margins reflects the pressure imposed by the macroeconomic conditions in China. However, the board is satisfied that the company remains profitable which demonstrates the strength and resilience of our business model.
“The group has been prudently preserving its cash to ensure that it is in the best position to sustain difficult trading periods as well as ensuring that the group is fully prepared to take advantages of this to grow when M&A opportunities present themselves.”
Cranswick (CWK) has jumped 1.8% to 2,188p as markets opened this morning after Liberum published a broker note arguing that the more than 15% fall in the value of the stock since April to pre-Crown Chicken acquisition levels presented investors with a buying opportunity.
The FTSE 100 continued yesterday’s downward trajectory, falling another 0.4% to 6,799.90 points.
Risers this morning included Diageo (DGE), up 0.8% to 2,007.5p, Britvic (BVIC), up 0.7% to 567p and Morrisons (MRW), up 0.6% to 212.3p. And early fallers include TATE & Lyle, down 1.2% to 676p, Dairy Crest, down 0.8% to 598p, and Greencore (GNC), down 0.7% to 295p.
Yesterday in the City
Dairy Crest (DCG) saw shares jump 2.5% to 603.5p as the business declared a new “era of growth”. Profits rose 19% to £16m in the first half to 30 September as volumes grew at its Clover, Country Life and Frylight brands.
Drinks bottler Refresco (RFRG) also had a good day with shares up 3.1% to €13.58 as a jump in co-packing volumes helped revenues and EBITDA rise.
Tate & Lyle (TATE) bounced back yesterday after heavy falls after the election of Donald Trump. Investors had worried about the ingredient business’ exposure to the Mexican peso and the US dollar, which both fell after the election result.
The FTSE 100 fell back 1.2% to 6,827.98 points after climbing in the early trading.
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