Dear All,
Firstly a big thank you to everyone who attended our 75th Anniversary celebration dinner last Wednesday. Also a big thank you to our sponsors. It was a great success so thanks again for your support.
Detailed below is the Weekly News for 2nd November.
Have a good week.
Gordon Polson – Director
Economic News
CBI Economic Update: Retail sales volumes grew at the fastest pace for two years in the year to September following a decline in the previous month’s figures, according to the latest CBI Distributive Trades Survey.
The survey of 117 respondents, including 55 retail firms, found that sales for the time of year were considered to be slightly above seasonal norms.
Meanwhile, orders placed with suppliers also rose in the year to September, also rebounding from a fall in the previous month. Retailers expect continued growth in both sales and orders in the year to October, albeit at a slower pace.
Growth in internet sales volumes rose in the year to September, to slightly above the long-run average, and are expected to expand at a somewhat slower pace in October.
Within the retail sector, the main drivers of growth in overall volumes were the grocery and clothing sectors. Retailers of furniture & carpets, specialist food & drink stores and sellers of recreational goods reported falling sales volumes over the year to September.
Elsewhere in the distribution sector, wholesalers continued to report above-average growth in sales volumes, which accelerated in the year to September, with growth expected to hold steady in the month ahead.
Meanwhile, motor traders reported rising demand in the year to September, with sales growing at the fastest pace in six months.
Retailers:
- 56% of retailers said that sales volumes were up in September compared with a year ago, whilst 15% said they were down, giving a balance of +42% – the highest since September 2015 (+49%). This was also above expectations (+19%)
- 37% of respondents expect sales volumes to increase next month, with 14% expecting a decrease, giving a balance of +23%
- 26% of retailers placed more orders with suppliers than they did a year ago, whilst 13% placed fewer orders, giving a balance of +12%. Orders are expected to grow at a slower pace next month (+7%)
- 24% of retailers reported that their volume of sales for the time of year were good, whilst 12% said they were poor, giving a balance of +13%
- Internet sales volumes continued to expand in the year to September, at a faster pace than in the previous month (+54%, compared with +34% in August), and above the long-run average (+48%)
- Grocers’ sales volumes rose strongly (+49%), with clothing retailers also performing well (+75%). Retailers of furniture & carpets (-18%), specialist food & drink stores (-45%) and sellers of recreational goods (-33%) reported falling sales volumes over the year to September.
- Wholesalers:
- 58% of wholesalers reported sales volumes to be up on last year, and 14% said they were down, giving a rounded balance of +44%, above expectations (+28%). Volumes are expected to grow at largely the same pace next month (+45%).
- Motor traders:
- 52% of motor traders reported sales volumes were up on a year ago, whilst 0% said they were down, giving a balance of +52%, above expectations (+31%) with the pace of growth expected to slow next month (+28%).
Other News
Food manufacturers lose £400m as productivity falls: According to the report titled OC&C’s 29th annual food and drink 150, by OC&C Strategy Consultants and the Grocer, the UK food and drink industry has seen falling productivity as an era of cheap labour has reduced incentives to invest in efficiency enhancing technologies. The producers saw revenue per worker fall 5% in 2016, bringing the total labour cost to £8.6bn from £8.2bn in 2015. Falling productivity cost food and drink producers an extra £400m in labour costs in 2016. This productivity squeeze is set to worsen as a result of the government’s planned increase in the national minimum wage through to 2020, coupled with an expected reduction in the supply of EU migrant labour following Brexit. The report found that capital investment in the UK food and drink manufacturing subsidiaries fell by 9.8% in 2016. The volume of mergers and acquisitions in food and drink production fell to its lowest level since the 2008 financial crisis. Deflation and intense competition in the sector meant revenue growth for the 150 biggest producers fell 0.8% in 2016, a second consecutive year of falling revenue.
FSA appoints 3 new Board members: The Food Standards Agency has announced 3 new appointments to the FSA Board. Laura Sandys will serve as Deputy Chair, and Mary Quicke and Stuart Reid will serve as Members for 3 year terms ending in 2020. Laura Sandys is a former MP who now runs a consultancy firm and works in a voluntary capacity as founder and chair of The Food Foundation, a food policy think tank. Mary Quicke runs Quicke’s, a £4m turnover farmstead cheesemaking business and is developing the Academy of Cheese with cheese industry colleagues in the UK. She is a Dairy Sector Board Member of the Agriculture and Horticulture Development Board (ADHB). Stuart Reid is Principal of the Royal Veterinary College (RVC), University of London. He is recognised by the Royal College of Veterinary Surgeons as a specialist in veterinary epidemiology and in veterinary public health by the European Board of Veterinary Specialists, and is a Fellow of the Royal Society of Biology and the Royal Society of Edinburgh. [Source: FSA website 20 Sept. 2017]
FSA Board discusses impact of Brexit on its responsibilities & operations: At its meeting on 20 September, the Food Standards Agency (FSA) Board discussed in detail the FSA’s preparations (feedback) for the UK’s departure from the EU in 2019 given that the vast majority of what the FSA currently does is driven by the EU regulatory regime. The Board’s starting point was its statutory purpose to protect public health in relation to food and consumers’ wider interests in relation to food. It emphasised that independence in matters of food safety and standards is critical to achieving consumer trust and confidence and should be central to whatever future regime is in place. The Board agreed that future arrangements should be judged against four over-riding principles: effectiveness in protecting public health; maintaining confidence in food safety and the regulatory regime; minimising disruption for consumers and industry; and alignment with the principles of the FSA’s Regulatory Strategy. The Board also discussed the FSA’s programme to drive improvements in animal welfare standards in slaughter-houses in England and Wales and the FSA’s review of food withdrawal and recall processes, among other issues.
Acrylamide: The EP ENVI Vote on the resolution opposing the Commission proposal on acrylamide took place late last week. MEPs rejected the resolution by a big majority in the ENVI committee vote. 44 MEPs voted against the motion for a resolution, with just 10 supporting it. We understand that by rejecting the resolution, the Parliament has given its consent for the Regulation to enter into force, which it will do in the spring of next year.
FareShare: Latest newsletter from FareShare, responsible for food redistribution and reducing food waste is available at this link.
FDF: have received a request from Engineering UK. They work to change perceptions of engineering among young people to inspire future engineers and for this year’s Tomorrow’s Engineers Week (http://www.tomorrowsengineers.org.uk/tomorrows-engineers-week-2017/) in November, they are working around the theme of #EngineerOnAMission. As such, they are looking for case studies of people who got into engineering with a desire to help save people and the planet. They are specifically looking for an engineer involved in food safety. They would like to feature the individual in a film which EngineeringUK would produce and promote online and on social media during the Week (6 to 10 November). They would need to be available for a one-hour shoot (at their place of work) between 10 and 17 October. If this is of interest contact Skye.Oudemans@fdf.org.uk