Proactive Investors - UK retail sales increased in May, though the trio of bank holidays failed to boost figures as much as expected, according to new data.
According to the British Retail Consortium KPMG retail sales monitor, sales rose 3.9% on-year in May compared to a 1.1% fall the year before and below the three-month average growth of 4.7%.
The figure was down from 5.1% growth in April and City expectations for a 5.2% rise.
Total growth (in value terms) came in at 3.9% over the previous year, down from 5.1% in the previous month. If we consider still-high inflation rates, this represents a much steeper fall in volumes. pic.twitter.com/bitsdg6TAO— Harvir Dhillon (@HarvirDhillon) June 6, 2023
On a like-for-like basis, sales increased 3.7% year-on-year last month, falling below the three-month average rise of 4.7%. In May 2022, sales had fallen 1.5% year-on-year on a like-for-like basis.
Food sales were up 9.6% on a year ago, boosted by the Coronation but still not sustained across the month.
Paul Martin, UK head of retail at KPMG, said the grocery sector was the “fastest growing part of the consumer wallet”, which meant that consumers were “having to spend more . . . in the one area that is getting disproportionately more expensive”.
UK inflation declined less than expected between March and April, from 10.1% to 8.7%, according to official data published last month. In April, food prices rose at an annual rate of 19.1%, only marginally down from a 45-year high of 19.2% in March.
BAT's new boss commits to exisiting strategy
British American Tobacco PLC (LON:BATS)’s new boss committed himself to the existing ‘A Better Tomorrow’ strategy, saying “smokers must have access to better choices.”
In his first trading update, Chief Executive Tadeu Marroco said he was committed to the existing strategy and confident it could be executed successfully.
He said the aim was to reduce the health impact of its business through a multi-category portfolio of reduced-risk products.
“Put simply, smokers must have access to better choices. This is already a reality for smokers who have made the switch to our reduced-risk product,” he said.
“Our strategic aim is to progressively transform our portfolio by actively encouraging adult smokers to switch to less risky products, compared to smoking; a transformation delivering long-term multi-stakeholder value.”
In the first quarter, BAT increased the number of consumers of non-combustible products1 by a further 900,000 driving good revenue growth and further reducing losses of New Categories which means the firm is on track to deliver its £5bn revenue ambition in 2025, with profitability in 2024.
Outside the US, combustible brands have been performing well as we address portfolio gaps and optimise pricing.
The performance in US combustibles has been disappointing and Marroco said returning combustibles to consistent value creation is critical to its strategy in the US.
Glo has had an underwhelming start to 2023, albeit recent momentum is more encouraging, Bat said.
BAT maintained its guidance for the financial year.
AB Foods bolsters agri-food business
Associated British Foods PLC (LON:ABF) has picked up National Milk Records PLC (AQUIS:NMRP) in a £48mln deal.
The agreed cash deal, worth 215p per NMR share, will be made by the group’s AB Agri business, and
represents a 87% premium to the NMR closing price on June 5.
AB Agri is ABF's international agri-food business with a presence in more than 80 countries, employing over 3,000 people internationally.
The FTSE 100-listed firm said NMR's business is well aligned with AB Agri's objective of supporting customers across the dairy industry, helping to drive efficiency and increase productivity.
NMR said it felt the terms were “fair and reasonable,” and urged shareholders to back the deal.