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Supermarket price inflation edged up to 2% in the first month of the new year according to the latest Grocer Price Index – but there is wide disparity across the big four, with Tesco price rises swelling the overall figure.
Tesco has now experienced the highest level of inflation across the big four in each of the past seven months, but it goes further than that, reaching levels not seen since April 2012, at 3.8% in the month to 1 February.
According to The Grocer Price Index, collated from over 60,000 individual and unweighted SKUs across the big four, inflation at Tesco has been running at 3.4%-3.8% since August even as it has tailed off at rivals. Sainsbury’s recorded inflation of 1.2%, down from its 2017 high of 2.1% in November, while Asda and Morrisons recorded annual price rises of 1.1%, both down from highs of 2.8% in October.
Averaging out inflation across the big four, the GPI figure for the month to 1 February stands at 2% - a slight uptick from 1.9% last month but down on the 2.9% recorded in October.
On a month-on-month basis the GPI rose 1.1% last month, with a 4.4% monthly rise in the price of alcoholic drinks helping drive the figure upwards.
Despite recent inflation, the overall GPI remains 2.9% lower than the peak of supermarket prices reached in May 2014.
Morning update
This week’s edition of The Grocer also has the story that online takeaway service Appetise has turned to the crowd to raise £500,000 for a battle against Just Eat, which dominates the £7bn market.
The business, backed by New York fund manager Bergen Capital and former Arsenal MD Keith Edelman, plans to use the cash for marketing in Birmingham, where it hopes to prove its model can deliver ahead of a second larger funding round for a city-to-city expansion.
Also in this week’s edition, healthy snacking startup Well & Truly has bagged £400k in capital from female-focused funding network AllBright. Plus the news broke last night that three factories and nine hundred jobs are facing the axe as part of a major restructure of 2 Sisters Food Group’s poultry business.
See thegrocer.co.uk/finance for details
On the markets this morning, the FTSE 100 looks set for another rough ride after opening down a further 0.4% to 7,141.1pts.
Amogst the early fallers are Majestic Wine (WINE), down 2.6% to 425p, PayPoint (PAY), down 1.2% to 844p and Imperial Brands (IMB), down 1% to 2,658p.
Early risers include Glanbia (GLB), up 2.2% to €14.12, Applegreen (APGN) up 1.6% to 511.1p, Ocado (OCDO) up 1.3% to 480.9p, TATE & Lyle (TATE), up 1.1% to 609p and Booker (BOK), up 1% to 223.8p.
Yesterday in the City
The global stocks sell-off continued yesterday, with the FTSE down another 1.5% to 7,170.6pts. Its losses have now reached 6.6% over the past two weeks and 4.4% over the past week.
Once more, international fmcg groups with significant global revenues suffered as the pound rose on the back of more bullish interest rate comments. British American Tobacco (BATS) fell 3.2% to 4,497.5p, Imperial Brands (IMB) dropped 2.8% to 2,684p, Associated British Foods (ABF) dropped 2.6% to 2,598p, Coca-Cola HBC (CCH) fell 2.6% to 2,232p and Reckitt Benckiser (RB) lost 2.1% to 6,400p.
Tate & Lyle (TATE) slumped 7.8% to 602.2p after announcing investment behind long-term development will hold back profits at its specialty food ingredients division in the second half.
Other fallers included Britvic (BVIC), down 4.2% to 675p, McColl’s (MCLS), down 3.7% to 258p, C&C Group (CCR), down 2.4% to €2.87 and Greencore (GNC), down 2.1% to 188.7p.
A huge exception to the downbeat trend was Compass Group (CPG), which reported that organic revenues increased 5.9% in the three months to December 31 and upgraded the market’s full-year sales expectations. The shares surged 5.3% to 1,513p on the news.
It was also a comparatively strong day for the supermarkets given the overall market slump. Sainsbury’s (SBRY) rose 1.7% to 246.2p, Marks & Spencer (MKS) rose 0.4% to 289.7p, Ocado (OCDO) and Tesco (TSCO) were flat at 474.9p and 202.4p respectively and Morrisons (MRW) lost just 0.4% to 216.9p.
Other stocks defying the slump included Hotel Chocolat (HOTC), up 2.3% to 327.5p, Just Eat (JE), up 2.1% to 803.6p, Finsbury Food Group (FIF), up 1.3% to 114p, Greene King (GNK), up 1.3% to 508.8p and Dairy Crest (DCG), up 0.8% to 559p.
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