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Ahead of its annual general meeting today, ABF has said its outlooking for the current financial year remains unchanged but that the volatility of input costs has begun to ease.

At its annual results on 8 November, ABF said it expected significant growth in sales for the whole group, but that adjusted operating profit would be lower than the financial year just closed.

This morning ABF reiterated that expectation, with chairman Michael McLintock stating: “Our outlook for the full year is unchanged. We continue to expect further significant input cost inflation, but the volatility of our input costs has diminished.”

The overall profits drop will be driven by Primark, given it decided not to implement further price increases on the autumn/winter and spring/summer ranges because of the reduction in consumer disposable.

However, Primark’s trading in this financial year has been “encouraging”.

“We are on track to open 27 new stores this financial year, ten of these opening in the run-up to Christmas, and to date we have opened six new stores, including one today in Angers, France,” he said.

Its food business is expected to post aggregate profit ahead of its last financial year, despite further margin erosion due to additional inflation in input costs, which it expects to recover through pricing over the course of the year.

Its financial results for the year to 17 September saw group revenue increased to £17bn, an increase of 22% over the previous year, while adjusted operating profit rose to £1.44bn, an increase of 42% at actual exchange rates and of 38% at constant currency.

ABF is down 0.3% to 1,650p this morning.

Morning update

The British Retail Consortium has published its latest annual Payments Survey, which reveals cash usage fell to just 15% of all transactions.

As stores closed for lockdowns and the public was advised to use contactless payments, cash payments dropped to a new low of 15% from 30% in 2020, while 82% were made on credit or debit cards (up from 67% in 2020).

More than four-in-five card transactions were made using debit cards, with the rest made up of credit and charge cards.

As a proportion of total money spent, cash accounted for just 8% of consumer spend (down from 15%), while credit cards rose slightly to 23%, and debit cards rose significantly to 67% (up from 59% in 2020).

The rise in the use of card payments in part reflects the increase in online shopping in 2021, when 48.6% of non-food items were purchased online. This figure has fallen to 39.9% in the first 11 months of 2022, as more people returned to the high street as the pandemic eased.

The BRC argued: “Cash remains vital for many people, particularly vulnerable groups who do not have access to other payment methods. However, the decline in cash has made it harder for many firms to use cash efficiently – increasing the costs associated with handling physical money.

“Government will need to look at solutions to ensure it remains a viable payment option for consumers.”

While card usage soared, so did the costs associated with accepting these payments. Retailers incurred costs of £1.3bn just to accept card payments from customers in 2021. Debit cards, which accounted for the majority of transactions, saw scheme fees rise by 28% compared to 2020, and total merchant service charges increased by 12%.

“Amidst a backdrop of mounting costs from rising energy prices, rising commodity prices, rising transport costs, a tight labour market, and other supply chain disruption, these excessive card fees add further cost pressures to retailers,” the BRC said.

The BRC said it, along with other business groups, has long been calling for intervention on anti-competitive practices in card payments in order to protect British businesses.

BRC Hannah Regan, payments policy advisor, said: “With the public in and out of lockdown and cash usage discouraged last year, over 90% of retail spending used debit or credit card. With card usage soaring, already hard-pressed retailers had to pay huge sums to accept these payments. We need urgent intervention from the Payments Systems Regulator and the Treasury to stop card schemes from abusing their dominant market position.”

On the markets this morning, the FTSE 100 is down 0.1% to 7,463.5pts.

Risers include Virgin Wines, up 3.6% to 72p, McBride, up 3.1% to 20.6p and Ocado, up 2.8% to 694.4p

Fallers include Bakkavor, down 4.6% to 91.1p, Science in Sport, down 1.6% to 14p and Naked Wines, down 1.5% to 103.9p.

Yesterday in the City

The FTSE 100 fell for the fifth day in six yesterday, dropping 0.2% to 7,472.1pts.

Grocery fallers yesterday including Kerry Group, down 5% to 83.9p, McBride, down 4.8% to 20p, Hilton Food Group, down 3.5% to 500p, British American Tobacco, down 3.1% to 3,305p, Naked Wines, down 2.6% to 105.5p and AG Barr, down 2.5% to 510p.

Risers included SSP Group, up 3.6% to 230.8p, Tesco, up 1.1% to 230.9p, THG, up 1% to 60p, Coca-Cola Europacific Partners, up 0.7% to 50.5p, Nichols, up 0.7% to 1,087.5p and Hotel Chocolat, up 0.3% to 146.5p.