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UK retail sales volumes slumped by 1.6% in August 2022, continuing a downward trend since summer 2021 as inflation and economic uncertainty hits consumer spending.

The Office of National Statistics said the headline drop in sales volumes reflected the ongoing recovery of hospitality post-Covid and also rising prices and the cost of living.

All main sectors (food stores, non-food stores, non-store retailing and fuel) fell over the month, which last happened in July 2021 when all legal restrictions on hospitality were lifted.

Food store sales volumes fell by 0.8% in August 2022, which leaves them 1.4% below their pre-coronavirus levels in February 2020.

Supermarkets’ sales volumes fell by 0.9% over the month, while specialist food stores (such as butchers and bakers) fell by 1.9%. Alcohol and tobacco stores rose by 6.3%.

The ONS said that food retailers have highlighted that they are seeing a decline in volumes sold because of increased food prices and cost of living impacts.

Non-food stores sales volumes fell by 1.9% over the month because of falls in each of its sub-sectors: other non-food stores (-2.8%), department stores (-2.7%), household goods stores (-1.1%) and clothing stores (-0.6%).

Non-store retailing (predominantly online retailers) saw a sales volume drop of 2.6% in August 2022, albeit sales volumes remain 24.4% above their February 2020 levels.

The proportion of retail sales online fell to 25.7% in August 2022 from 26.3% in July

Automotive fuel sales volumes fell by 1.7% in August 2022, which is 9% below their February 2020 levels.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown commented: “This is markedly worse than forecasts of a 0.5% fall, and indicates rising prices and the cost of living crisis is stopping consumers from reaching for their purse when it comes to extra spending. There is also the possibility these figures suggest the UK is already in recession.”

Oliver Vernon-Harcourt, head of retail at Deloitte, added: “Retailers, who are also battling rising costs, may be revising expectations ahead of the critical Golden Quarter, with ongoing uncertainty amongst consumers around how much they will be able to spend over the coming months.

“In this case, it may get worse before it gets better. However, the festive period will be an opportunity for retailers to showcase the best they have to offer to attract consumer spending.”

Morning update

Naked Wines founder Rowan Gormley is to return to the business in an advisory capacity.

The former-CEO and material shareholder has been appointed as an advisor to the board as it finalises its revised operational and financial plans for the business.

The company will announce these revised plans during the week commencing 17 October.

The position of Board adviser is unpaid and is expected to last for a period of two to three months. Gormley will represent the views of shareholders and advise the board accordingly.

Gormley, who stepped away from his CEO role in early 2020, currently owns 2.1m shares in the group, comprising 2.9% of its issued share capital.

Darryl Rawlings, chairman, commented: “We wanted shareholder involvement in our ongoing operational and financial planning process. I welcome Rowan providing his insight to us because his operational familiarity with the business and his viewpoint as a shareholder will provide a unique and valuable perspective to the board as we position Naked for long-term sustainable growth”

Yesterday afternoon Greencore announced it has appointed Leslie Van de Walle as a non-executive director and chair designate, joining the board on 1 December 2022.

Van de Walle will succeed the present chair, Gary Kennedy at the conclusion of Greencore’s AGM in January 2023.

Kennedy, who has been executive chair since 2021, chair since 2013 and a non-executive director since 2008, will retire as chair and from the board on the same date.

Van de Walle is currently chair of Euromoney Institutional Investor and is a non-executive director of HSBC UK Bank.

His executive career included serving as CEO at Rexam, and as executive VP of global retail at Shell. He also brings many years of food industry experience and knowledge from previous senior management positions at Danone, Cadbury Schweppes and United Biscuits, where he served as CEO.

Gary Kennedy, executive Chair, commented: “Leslie brings a wealth of non-executive and Chair experience across multiple sectors including food. I know that he will provide the Board with strong and effective leadership and that he will be a great support to our incoming CEO, Dalton Philips, who has been involved in the process and welcomes Leslie’s appointment.

“It has been a privilege to work with so many talented colleagues at Greencore for nearly fifteen years, as we transformed the Group into a leader in the UK convenience food sector. I have every confidence that the Group has the capabilities to continue to lead and grow in its markets in the years ahead.”

Van de Walle added: “I am excited to be joining Greencore at such an important time for the business. Strong progress has been made in driving revenue growth and improved profit conversion against the backdrop of a very challenging economic and food industry environment. I am looking forward to working with Dalton, his executive team and the Board to advance this further and to create superior value for stakeholders.”

Science in Sport has appointed Daniel Lampard as chief financial officer with effect from 19 October 2022.

Lampard is currently the CFO of Unbound Group, an omnichannel direct to consumer business. Prior to this, he was CFO of DTC at Glanbia Performance Nutrition.

Previous roles include Director of Finance at AO World and senior finance roles at Manchester Airport Group.

He will succeed James Simpson, who has now left the group. Greg Edwards has been appointed interim CFO until Lampard commences his role on 19 October 2022.

Stephon Moon, CEO, commented: “I am delighted to welcome a CFO of Dan’s calibre to the group. His sector-specific experience in performance nutrition and deep insight of online businesses will substantially strengthen the executive management as we move into our next growth phase.”

On the markets this morning the FTSE 100 is down 0.2% to 7,268.4pts.

Risers include McBride, up 5.7% to 24.3p, Domino’s Pizza Group, up 1% to 247.6p and Tate & Lyle, up 1% to 719.4p.

Fallers include Glanbia, down 5% to €12.11, Naked Wines, down 4% to 87.4p and WH Smith, down 3.4% to 1,417p.

Yesterday in the City

The FTSE 100 fell back another 0.4% to 7,251.2pts yesterday.

THG crashed 18.4% to a new all-time low of 40p after the online retail group grew revenues strongly in the first half, but profits were hit by absorbing some inflationary price increases.

Hilton Food Group plunged 28.3% back to 675p after warning profits will be below expectations due to current economic headwinds.