Top story

Footfall strengthened for the third consecutive month in June, according to Springboard, but the figures were boosted by the Jubilee and underlying trends point the impact of inflation on shopper behaviour.

The Springboard Footfall Monitor for June found the footfall gap from 2019 narrowing to -12.3% from -13.7% in May.

However, Springboard said this improved result was wholly due to the positive impact of the Platinum Jubilee Bank Holiday in the first week of the month, when the rise in footfall of +8.6% from the week before narrowed the gap from 2019 to just -4.9%.

Over the subsequent four weeks in June the gap from 2019 averaged -14%, worsening each week up until the final week of the month when the gap from 2019 reached -16% across all retail destinations and -19.5% in high streets.

“June’s result reinforces our view that the cost of living crisis is starting to impact consumer behaviour and constrain shopper activity,” said Diane Wehrle, marketing & insights director at Springboard.

In the short term, the overall impact on the retail sector is being mitigated by robust store sales that continued in June overall, although sales performance was more erratic than in May with shifts from a positive to negative position occurring from week to week, the first sign that consumers are starting to pull back on spending.

“Whilst store sales are undoubtedly buoyed by spending from those middle income families who had saved during Covid, we fully expect to see this spending slowing as people gear up for the increase in energy bills in October and for Christmas,” she said.

Springboard noted that the results for June continue to reflect the impact on footfall in towns and cities of hybrid working. The trend that has occurred since the start of the pandemic for footfall in smaller high streets being consistently more resilient than in larger cities continued in June.

In Central London, in June, footfall was -21% below 2019 versus just -9.9% in Outer London, and -15.8% below 2019 in large city centres across the UK versus -15.2% in market towns.

“Looking forward to the second half of 2022, in the light of the squeeze on household budgets and in the absence of a significant return to full time office working by employees, we anticipate that footfall will remain at least 10% to 15% below the 2019 level,” she said.

Morning update

On a quiet morning, C&C Group has updated the market ahead of its AGM later this morning.

The drinks producer and wholesaler said it had seen “solid” trading in the period from 1 March to 30 June.

Despite the consumer backdrop, net revenues were 6% ahead of pre COVID-19 levels for the four months to 30 June 2022, as it heads into its our busy summer trading period.

However, the group continues to operate in a “challenging inflationary environment” and “remains vigilant on the potential impacts of this on both our cost base and the pressures being faced by consumers”, which could impact future demand.

It said it has a significant proportion of manufacturing input costs fixed for 2023 and will continue to proactively manage our cost base, while assessing any necessary price increases to recover inflation pressure across the business as the year progresses.

Reflecting the continued recovery in trading, net debt to adjusted EBITDA, at 30 June 2022, fell to approximately 2.4x which represents a significant improvement from 3.4x reported at 28 February 2022.

The group is on track to achieve its leverage ratio target of less than 2.0x and assuming current trading conditions continue, return capital to shareholders in due course.

Additionally, following four years as Chair of C&C Group and 10 years on the board, Stewart Gilliland is not seeking re-election and will be succeeded by Ralph Findlay, subject to shareholder approval, at the conclusion of the AGM.

Ralph Findlay, Chair designate of C&C Group, commented: “I would like thank Stewart for his commitment and stewardship of C&C, during which time the Group has transformed into the leading final-mile distributor to the on-trade in the UK and Ireland, while navigating the business through the most challenging period in our industry’s history.

“The Group has iconic brands, a leading distribution network and a strong capital structure to sustain its future growth ambitions. I look forward to playing a role in driving the future success of the business for all our stakeholders including customers, consumers, employees and shareholders.”

On the markets this morning, the FTSE 100 has regained another 1.2% to 7,191.5pts.

Risers include McBride, up 7.8% to 17.4p,, Just Eat, up 2.8% to 1,389.4p and Naked Wines, up 2% to 173.3p.

Fallers include Coca-Cola HBC, down 2.4% to 1,792p, Science in Sport, down 2.1% to 45p and British American Tobacco, down 1.3% to 3,442.5p.

Yesterday in the City

The FTSE 100 rebounded 1.2% yesterday to recover somewhat from Tuesday’s heavy falls and end trading at 7,107.8pts.

Online stocks benefitted from the rally, with Just Eat Takeaway up 13.8% to 1,351.4p, THG, up 5.2% to 80.2p, Naked Wines, up 4.4% to 169.9p and Deliveroo, up 4.2% to 96.7p.

Other risers include FeverTree, up 7.7% to 1,305p, Glanbia, up 4.6% to €10.81, AG Barr, up 4.4% to 526p, Bakkavor, up 4% to 98p, C&C Group, up 3.6% to 186.3p, Nichols, up 3.5% to 1,200p, Greggs, up 3.4% to 1,893p and B&M European Value Retail, up 3.1% to 370.3p.

The day’s few fallers included Hotel Chocolcat, down 6% to 251p, McBride, down 3.9% to 16.2p, Marks & Spencer, down 1.8% to 135p, Hilton Food Group, down 0.6% to 990p and Coca-Cola HBC, down 0.4% to 1,837.5p.