City Talk: Fall in food inflation

According to the British Retail Consortium, food inflation has fallen to its lowest level for three years. The latest shop price index indicates that food prices rose by just 1.2% last month the slowest level since the survey started at the end of 2006. Food retailers are having to compete aggressively on the price-slashing front to persuade shoppers, reluctant to spend ahead of the Election on 6 May, to dig deeper into their wallets and purses.

Compass sees fast growth


The world's biggest caterer Compass pleased the market by announcing second-quarter sales should grow by about 1.5% as it had won new contracts. These include catering for Deutsche Telecom, Johnson & Johnson, Shell, Visa and Pfizer.

Compass has predicted that growth will return after the worst recession in recent decades. While economic conditions are anticipated to remain stormy, the combination of a hefty new business pipeline and stabilisation in like-for-like volume should deliver reasonable organic revenue growth.

The group's North American operations are particularly robust, with sales rising 2% on the back of the improving job scenario in the US and this growth should continue. European operations showed a tiny drop in revenues, but profit margins improved. The rest of the world showed the strongest margin growth. Compass enjoys annual revenue of over £13bn. The group operates in over 50 countries and provides the catering for popular summer season events, such as Wimbledon and The Henley Regatta.


Dealers speculate on M&S rights issue


Dealers are worried that Marks & Spencer is considering making a £750m rights issue on the back of its fourth-quarter sales growth rising by a creditable 5.1%. Food sales rose by 1.8%.

Sir Stuart Rose tried to dampen speculation, saying that there "is no need for one [a rights issue] considering the company's improved trading this year". The market reckons that Sir Stuart's successor, Marc Bolland, who joins M&S in May from Asda, wants to carry out a major overhaul of M&S and speed up the changes being carried out.

Sir Stuart, is set to remain with M&S as non-executive chairman until March 2011.


Asda's market share slips


Asda has seen its market share fall over the 12 weeks to 21 March, according to new data from Kantar Worldpanel. Asda's market share over the period was 17.1%, compared with 17.3% over the same period last year. J Sainsbury managed to increase its market share from 16.1% to 16.3%. Wm Morrison increased its share from 11.6% to 12.1%. Top place was taken by Tesco, with a market share rising from 30.1% to 30.3%.

User Login



Most read


Should the meat industry pay for compulsory abattoir CCTV monitoring?