The boss of the European division of Mondelez International, which owns Cadbury, says that it is stockpiling ingredients and finished confectionery and biscuits in case of a no-deal Brexit (The Times £). Hubert Weber, president of Mondelez Europe, said: “Like the whole of the food and drink industry in the UK, we would prefer a good deal that allows the free flow of products as that would have less of an impact to the UK consumer. However, we are also preparing for a hard Brexit and, from a buffering perspective for Mondelez, we are stocking higher levels of ingredients and finished products, although you can only do so much because of the shelf life of our products.”
Associated British Foods enjoyed higher profits across its retail and grocery arms despite taking a £20m hit from the stronger pound. The company, which owns hot drinks brands Ovaltine and Twinings, said its grocery division’s sales and profits would be “well ahead of last year” (Telegraph).
ABF has blamed the unusually hot summer across Europe for a predicted fall in a key sales measure at its Primark fashion chain (Financial Times £, The Times £). But Primark’s strong UK performance was offset by less good news in the food-orientated divisions of the diversified conglomerate, but it was a poor performance in ABF’s sugar business that investors focussed on, with shares in the company falling 3.3 per cent in early trading (Daily Mail).
The hottest summer since records began helped the British economy gather strength in the three months to July, as shoppers hit the high street and England progressed to the semi-finals at the World Cup (The Guardian). The Office for National Statistics said GDP increased by 0.6% in the period from a rate of 0.4% in the previous three months, driven by a rise in activity in Britain’s dominant services sector.
The cost of bread is forecast to rise after the effects of a dry summer pushed up the price of wheat by 25% to 30% (The Guardian). Prices in stores have already risen in recent months and are likely to continue going up as Associated British Foods (ABF), the owner of Kingsmill, said the impact of its rising costs would be “reflected in our ongoing discussions” with retailers.
Retailers faced a bill of almost £1bn last year for accepting cards after payment providers raised their fees, a trade association has claimed (The Times £). The British Retail Consortium said that retailers had spent an additional £170 million to process card payments in 2017, totalling almost £1 billion, as more than three quarters of sales were paid for by card for the first time.
Two American private equity firms are weighing up takeover bids for Europe’s biggest plastics packaging company (The Times £, Daily Mail). RPC Group said that it was in the early stages of talks with Apollo Global Management and Bain Capital over a possible offer.
Blue Bottle Coffee Co, the US specialist coffee roaster and retailer majority-owned by Nestlé, could come to Europe as part of the escalating global competition for high end coffee drinkers (Financial Times £).
The record-breaking heatwave and lack of rain across Europe has hurt potato crops, with prices tripling in the U.K. in August from a year earlier (Bloomberg). That’s forced fish and chip shops to charge more for a portion of fries that form one half of the traditional British staple. Further price hikes loom, said Andrew Crook, president of the federation representing more than 10,000 fish and chip shops across the country.
Kirin said on Tuesday it is launching a strategic review into its Australian and New Zealand dairy business Lion-Dairy and Drinks and was considering a sale of the unit (Financial Times £). The Japanese beer group said it “will give consideration to all potential options for LDD, including retaining and investing in the business and a sale of LDD” following a 2014 turnaround programme and medium-term business plan in 2016.
The rate at which pubs and other licensed premises are closing has doubled over the last three months with the future of the traditional “local” increasingly under threat (Telegraph). Britain has 3,116 fewer pubs, bars and restaurants compared with 12 months ago - something industry leaders labelled “deeply concerning”.
Marks & Spencer has announced that the star of its latest fashion campaign will be the TV presenter Holly Willoughby (The Guardian).
Debenhams rushed out a trading statement on Monday to reassure investors after a sharp share-price fall triggered by reports it was considering a financial restructuring. Shares in the retailer had fallen by as much as 19 per cent to an all-time low early on Monday over concerns about its plans, which weekend media reports indicated could include a company voluntary arrangement (Financial Times £, Telegraph).
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