Shares in Whitbread frothed up yesterday as takeover and break-up talk swirled around the owner of Costa Coffee and Premier Inn. The stock rose 22p to 3948p on market rumours that some investors were set to urge new chief executive Alison Brittain to spin off Costa. Weekend press reports claimed the shareholders believed the group’s declining fortunes in the past few months had boosted the case for a break-up. (The Daily Mail)

Writing in The Telegraph, Ben Marlow says: “You have got to feel for Alison Brittain. It was never going to be easy filling Andy Harrison’s shoes at Whitbread… Brittain is expected to deliver her strategy next month. Just four months into the job, the prospect of fending off these [break-up] demands, suddenly gives her a lot more to despair of.”

Tesco has revamped its budget range of value products with a new range of own-label “farm” brands as it steps up its fight against German discounters Aldi and Lidl. The seven brands comprise 76 new lines across fresh produce, meat and poultry that will either match the price of competitors or beat them (The Guardian). Read The Grocer’s story on Tesco’s new range here.

Pets at Home announced a surprise top-level reshuffle yesterday after Nick Wood revealed that he was stepping down as chief executive to spend more time with his family. The sudden departure “raised eyebrows in the City because Wood, who joined the company in 2012, had steered its successful flotation on the London Stock Exchange two years later” (The Times £). The Telegraph notes Pets at Home reported strong sales during a Christmas period that was generally difficult for the UK’s retailers.

Casino Guichard-Perrachon has had its debt rating cut to junk status after rating agency Standard & Poor’s followed through on its threat to downgrade the French retailer. (The Financial Times £)

In wider retail, Mike Ashley admitted yesterday that Sports Direct was in trouble, blaming MPs for creating a spiral of negative publicity surrounding the company. Mr Ashley told The Times he had concerns that the sportswear retailer, which employs about 18,000 people in Britain, was losing momentum and said that he would refuse to appear before a Commons select committee in June. (The Times £)

Britain’s manufacturing sector remains mired in recession following months of weak demand from foreign customers and depressed demand at home. The CBI industrial trends survey found that factory output fell over the three months to March at the fastest pace since September 2009, marking a steep decline in the sector dating back to last summer (The Guardian). The Daily Mail said the figures are “another bruising setback for George Osborne who five years ago pledged that Britain would be ‘carried aloft by the march of the makers’ – only to see manufacturing flounder”.

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