Federation of Bakers Relaunches with New Logo and Website : Here at FoB we are delighted to unveil a new visual identity to include a brand new logo, website and domain name, following our recent move to new premises at 10 Bloomsbury Way in Central London.
You can visit the new FOB website at: fob.uk.com.
We also have new email addresses: gordon.polson@fob.uk.com; amy.yeates@fob.uk.com; caroline.ford@fob.uk.com; info@fob.uk.com
Please note that our old emails will continue to work alongside the new ones for a few months to allow changes to be made to contacts lists etc.
CBI Economic Update: CPI inflation continued to creep higher in January, hitting 1.8% year-on-year, though a touch lower than consensus expectations. The main upward pressure came from rising fuel prices, as previous declines continue to fall out of the year-on-year rate. Rising food prices were also a driver, albeit a more minor one.
Pipeline inflationary pressures are continuing to build, with producer input prices rising at 20.5% on an annual basis, the fastest pace since 2008. There were also further signs of these costs being passed on, with output price inflation also picking up to 3.5% in January, a five-year high.
Results of the Labour Force Survey showed that employment rose by 37k in Q4 to 31.8mn, after flatting out the previous two rolling quarters. Unemployment fell by 7k over the same period, with the unemployment rate holding at an 11-year low of 4.8%. Real average earnings growth – pay adjusted for CPI inflation – eased to a two-year low of 1.4% year on year, as nominal wage growth edged lower against a backdrop of higher inflation.
Industrial production increased 1.1% on a month-on-month basis in December after surging 2.0% in November, overshooting consensus expectations for a tepid 0.2% improvement. Providing the only positive contribution was manufacturing output (≈70% of the headline index) which grew by 2.0% in December. The data generally pointed to firmer underlying momentum in the manufacturing sector, with output rising by 1.2% over Q4 2016 as a whole, well above the average of the last few years (0.3% since 2010).
Construction output rose 1.8% on the month in December, building on 0.4% growth in November, and above consensus expectations of a 1.0% expansion. But in contrast to manufacturing, momentum remains tepid: construction output rose by just 0.2% in Q4, considerably below average growth of 0.7% since 2010.
The manufacturing and construction data is stronger than the ONS had pencilled in to their preliminary GDP estimate which had shown the economy had grown by an impressive 0.6% over Q4. Combined, these add an additional +0.04pp to Q4 growth. While taking these alone would make no difference to GDP growth, any upward revisions to services output (≈80% of GDP) would combine to push up growth even further.
Retail sales rebound slightly in the year to February: Retail sales volumes grew modestly in the year to February, having fallen in January, according to the latest CBI quarterly Distributive Trades Survey.
The survey of 128 firms, of which 64 were retailers, showed that sales volumes are expected to rise again in the year to March, albeit at a slightly slower pace.
However, the volume of orders placed upon suppliers fell over the year to February, having been stable last month, and a further decline is expected next month. Sales for the time of year remained broadly in line with seasonal norms in February – for a second consecutive month – following above-average sales in the final two months of 2016.
The slight increase in overall retail sales volumes was driven by the clothing and non-store sectors, as well as other normal goods. Year-on-year growth in internet sales volumes slowed although retailers expect them to pick up slightly next month. Overall, retailers appear to have become more cautious in their outlook. Employment fell at the fastest pace for two years, with a similar reduction in headcount expected next month. Investment intentions for the year ahead also turned negative, following a modest improvement over the previous two quarters.
Meanwhile, for the first time in four-and-a-half years, retailers expect their business situation to deteriorate over the next three months. The most significant factor driving this more pessimistic outlook was rising cost pressures.
Higher costs are feeding through to inflation, with average selling prices increasing at the fastest pace in almost six years and prices set to rise even more rapidly next month.
Key findings:
- 40% of retailers said that sales volumes were up in February on a year ago, while 31% said they were down, giving a balance of +9%, up from a fall in the previous survey (-8%)
- 33% of respondents expect sales volumes to increase next month, with 28% expecting a decrease, giving a balance of +5%
- 24% of retailers placed more orders with suppliers than they did a year ago, whilst 35% placed fewer orders, giving a balance of -11%
- 15% of businesses reported that their volume of sales for the time of year were good, whilst 18% said they were poor, giving a balance of -3%
- Growth in internet sales volumes slowed and fell below the long run average (+48%) in the year to February. Expectations are for growth to accelerate in the year to March, although remaining below the long-run average (+52%)
- Sales volumes grew in clothing (+68%), non-store goods (+41%) and other normal goods (+15%)
- Average selling prices rose starkly on a year ago (+57%) at the fastest pace since May 2011
- Investment intentions for the year ahead fell (-10%) for the first time since May 2016. The business situation was expected to deteriorate over the next three months (-7% from +12%), the first fall since August 2012 (-17%)
- In a supplementary question asked alongside the February survey, 42% of retailers cited rising cost pressures as a factor driving the deterioration in the business situation, with 35% citing uncertainty over Brexit/EU negotiations, 23% pointing to expected weakening in sales volumes and 18% citing an expected weakening in profitability
- Asked how average costs per sales compared with the same month a year earlier, a net balance of 83% said average costs were higher.
WRAP Retailer Survey: Changes to food packaging and labels could save UK homes £1 billion annually:
- WRAP’s Retailer Survey finds food packaging and labelling has improved but there is more to do*
- Confusing multiple date labels mostly removed
- Good progress on improving freezing guidance
- Conflicting guidance on fridge temperature still found on many foods
- Some product date labels have cut the time available to eat our food.
Analysis by the resource efficiency experts shows that around 350,000 tonnes of avoidable household food waste, worth an estimated £1 billion annually, could be prevented through further changes to key food items in the UK’s shopping aisles. The financial benefits of making priority technical*** changes to food packaging and labels have been outlined in WRAP’s latest Retailer Survey. The announcement comes as part of WRAP’s long-standing work with retailers and food manufacturers to help consumers waste less food. This latest edition assesses how retailers and food manufacturers have progressed against the organisation’s original recommendations.
In the media this morning there are several references to bread as result of WRAPs Retailer Survey. http://www.wrap.org.uk/sites/files/wrap/Retail_Survey_2015_Summary_Report_0.pdf
- Most pre-packed bread and bacon says ‘freeze on day of purchase’. It should say freeze by date shown or as soon as possible.
- Use of the snowflake logo to show suitability for home freezing has declined, particularly for bread, chicken, juice and cooking sauce.
- Yogurts and bread increasingly have ‘use by’ labels when they should have ‘best before’ labels.
- Advice not to store bread in the fridge…..has been removed from many products.
We will be discussing these references to bread with WRAP at the next Technical Panel meeting on 5th April.
Organic food sales worth more than £2bn: According to the soil association’s ‘2017 organic market report’, organic food sales grew 7.1% to £2.09bn in 2016, as consumer interest in organic grew. The market saw its fifth year of consecutive growth, reaching pre-recession levels of sales. Organic food and drink accounted for 1.5% of total sales in the UK. Dairy, which held the biggest market share at 29%, grew by just 2.2% since last year. Fresh produce grew 10.3%, gaining the second largest share at 23.5%. Organic chilled foods saw the highest growth in 2016, up 16% with a 2.9% market share. However, frozen food’s market share declined by 6.9% to a 0.7% market share. Supermarket sales, which account for 69% of market share, grew 6.1% to £1.4bn, fuelled by a growing trend of consumers choosing organic food and drink as a healthier option.
Gordon Polson
Director