Broker RBC said yesterday that it expected disposable income to be squeezed by a weaker jobs market and higher inflation next year, which would weaken till receipts. It meant that the Canadian broker favoured higher quality merchants, such as M&S, and online retailers and was cautious about companies likely to experience a squeeze in same-store sales and margins. RBC instead told investors to buy Associated British Foods because of the potential store expansion of Primark. (The Times £)

The post-referendum plunge in sterling, combined with surging cotton prices and the rising UK living wage will drive a 3 per cent rise in retail prices next year, RBC predicts. They suggest this “will prove difficult to pass onto consumers who have become used to price deflation in the sector”. (The Financial Times £)

After the collapse on Mondelez’s efforts to buy Hershey the former’s share price went up as analysts said they think Mondelez’s acquisitive chief executive Irene Rosenfeld has better options. The company is heavily focused outside the US and some investors were not particularly excited about buying a rival that was far more American at a time when consumer tastes were changing. However, The FT warns Mondelez “could become a target itself”. (The Financial Times £)

The failure has highlighted the power Hershey’s charitable trust wields in rebuffing unwanted interest. The trust, which controls 81% of the company’s voting rights, was set up by Hershey’s founder more than a century ago to fund a school for underprivileged children (The Telegraph). The failure of the $23bn cash and shares offer illustrates the difficulty that any corporation would face with a bid. (The Times £)

British consumers have recovered some of their swagger after a run of better than expected economic figures calmed nerves following the Brexit vote (The Guardian). Record low interest rates, falling consumer prices and high employment levels have caused the largest collapse on record in Britain’s saving habits (The Times £).

Amazon has finally launched its Dash physical instant purchase buttons in the UK, bringing one-push buying of nappies, toilet roll, dishwasher tablets and washing powder to a washing machine to the market. (The Guardian, The Telegraph)

Supermarket giant Tesco has been stricken by short sellers gambling that its shares would suffer later this year. Short-sellers – investors betting that shares will fall rather than rise – have piled into the retailer amid concerns a turnaround led by chief executive Dave Lewis is stuttering. (The Daily Mail)

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