Smaller Order Sizes Hit Ocado as Prices Rise: The London Rush

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The 15% increase in food prices reported by the British Retail Consortium may not surprise anyone who has been shopping in supermarkets recently. The figures show accelerating prices this month, with food being hit hardest as fruit and vegetables fell into short supply. British supermarkets have been competing to keep prices lower, but the threat of discount retailers like Aldi and Lidl still looms large.

That’s reflected this morning in Ocado’s update this morning on its joint venture with M&

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Bloomberg News

Bloomberg News Charles Capel and Leonard Kehnscherper Published Mar 28, 2023  o  3 minute read

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A delivery driver for Ocado Group Plc prepares groceries for delivery to an apartment in London, U.K., on Tuesday, Sept. /p p29, 2020. Covid-19 lockdown enabled online and app-based grocery delivery service providers to make inroads with customers they had previously struggled to recruit, according the Consumer Radar report by BloombergNEF.
A delivery driver for Ocado Group Plc prepares groceries for delivery to an apartment in London, U.K., on Tuesday, Sept.

29, 2020. Covid-19 lockdown enabled online and app-based grocery delivery service providers to make inroads with customers they had previously struggled to recruit, according the Consumer Radar report by BloombergNEF. Photo by Hollie Adams /Bloomberg

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(Bloomberg) — The 15% increase in food prices reported by the British Retail Consortium may not surprise anyone who has been shopping in supermarkets recently.

The figures show accelerating prices this month, with food being hit hardest as fruit and vegetables fell into short supply. British supermarkets have been competing to keep prices lower, but the threat of discount retailers like Aldi and Lidl still looms large. That’s reflected this morning in Ocado’s update this morning on its joint venture with M&S, revealing falling basket sizes and higher selling prices.

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Here’s the key business news from London this morning:

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In The City Diageo Plc: Ivan Menezes, the CEO of the alcoholic drinks maker, will retire after ten years leading the company, and will be replaced by the current COO Debra Crew.

  • Menezes joined the company when Guinness Plc and Grand Metropolitan Plc merged in 1997, and has served as CEO since July 2013

Ocado Group Plc: The company’s retail joint venture with Marks & Spencer Group Plc reported a fall of 7.5% in average basket size in the first quarter, offset by price increases.

  • The company, which experienced rapid growth during the pandemic, said order frequency had returned to pre-Covid levels

Bellway Plc: The homebuilder said higher mortgage rates and the end of Help-to-Buy contributed to a 43.8% decrease in its private reservation rate in the first half of the year.

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  • Easing mortgage rates, as well as a seasonal increase in activity has improved customer demand this year

GSK Plc: The company’s endometrial cancer drug Jemperli posted strong results in a trial, a sign it could become the top seller the British pharmaceutical giant is predicting. In Westminster Prices in UK stores rose at the highest rate on record this month in a sign that the cost-of-living crisis is far from over. The British Retail Consortium said shop price inflation accelerated to 8.9%, a fresh peak for an index that started in 2005, and an increase from 8.4% in February.

Food price increases hit 15%, as fruit and vegetables fell into short supply. Bank of England Governor Andrew Bailey, meanwhile, said interest rates will probably remain below the highs seen before the financial crisis, his latest hint that the UK central bank may be near an end to its quickest series of hikes in three decades.

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Barclays Plc’s chairman has described the recent slew of Epstein allegations against Jes Staley as “serious and new,” the lender’s first update on the matter since its former chief executive officer left the bank more than a year ago. Richard Branson was long a force to be reckoned with in the booming private space business. The British serial entrepreneur’s second space foray,  Virgin Orbit, strapped rockets under the wing of a jumbo jet to launch satellites on their flight path, complete with mission monikers like “Start Me Up” that reflect his distinctive blend of business and bravado. But following a serious misstep in January, the once high-flying enterprise is on the brink. Looking Ahead 

Clothing and homeware brand Next Plc is among the companies due to update the market tomorrow. The retailer’s sales are likely to fall as shoppers continue cut back on discretionary spending and prices keep rising, says Bloomberg Intelligence’s Charles Allen. Next’s bottom line is also taking a hit form higher wage, energy and technology costs, according to Allen. 

For a more considered take on the UK’s economic and financial news, sign up to Money Distilled with John Stepek.

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