The relationship between retailers and their suppliers is to be scrutinised in the wake of the Tesco accounting scandal. The Financial Reporting Council (FRC), the UK’s auditing and accountancy watchdog, plans to make food retailing a priority sector for audit inspections this year. The FRC will “pay particular attention to the audit of revenue recognition and complex supplier arrangements” at food, drink and consumer goods manufacturers, as well as retailers. (The Guardian)
Meanwhile, the quality of UK audits is improving but there is still work to be done, the UK’s accountancy watchdog will say on Friday in its annual audit review. According to the Financial Reporting Council, 67% of audits inspected for the year ended 31 March were assessed as either good or only requiring limited improvements, compared with 60% in the previous year. (The Financial Times £)
Amazon is to expand its Elements business and start selling own-brand food in the US. The online retail giant launched its first private-label product, nappies, in December, but is now pushing into everyday food and drink products such as milk and cereal. Amazon filed for trademark protections for more than two dozen items under its Elements brand earlier this month, including coffee, soup, pasta, water, vitamins, dog food, razors and cleaning products. (The Telegraph)
There is plenty of coverage of yesterday’s results – notably the 30% revenue growth at B&M Bargains, which is “proving Southerners love a bargain too” (The Telegraph). Chief exec Simon Arora dismissed the threat of growing poundshops, noting its best-selling item is currently a £100 patio set (The Financial Times £). The Times (£) notes B&M is expected to buy a clutch of B&Q stores as Kingfisher scales back the DIY brand’s store estate.
PayPoint got the thumbs up from City analysts after surprising everyone with plans to sell loss-making parking and online payments businesses (The Daily Mail). But the firm was forced to defend its treatment of small retailers after recording growing sales and turnover soon after reducing the commission that it pays to shop owners. (The Times £)
A price war in Tate & Lyle’s Splenda sweetener business and supply havoc caused by frozen US railtracks wiped 80% off reported pre-tax profits. Chief exec Javed Ahmed admitted: “We came up short. It’s been very painful”. (The Financial Times £)
Naming and shaming supermarkets that sell chicken heavily contaminated with a food poisoning bug has yet to bring a reduction, according to a Food Standards Agency survey. Asda had the worst record, with almost 30 per cent of its chicken found to have more than 1,000 campylobacter bacteria per gram. Morrisons had the next worst record at 22% followed by Co-op at 19%. Tesco had the best score, with just under 13% of its chicken heavily contaminated in the year to February. (The Times £)
Meanwhile almost three-quarters of fresh chickens bought in UK shops have tested positive for the food poisoning bug campylobacter, according to the Food Standards Agency. It named the worst offenders last November, despite intense lobbying by the industry to prevent publication of the findings, which sent sales of fresh chicken down by about 7%. (The Financial Times £)