Carlsberg Britvic is celebrating its official launch today (17) following the completion of the deal for Carlsberg Group to acquire Britvic plc.
In a landmark moment in the history of Carlsberg Group and the British drinks industry, today (17) marks the official launch of Carlsberg Britvic – the new company uniting Carlsberg Marston’s Brewing Company (CMBC) and Britvic’s UK business.
Carlsberg Britvic’s strong national footprint brings together CMBC’s breweries and leading in-house secondary logistics operation – with 15 depots servicing customers across the UK – with the dynamic packaging and production capabilities of Britvic.
The business is now the largest multi-beverage supplier in the UK, making the UK Carlsberg Group’s largest market by revenue in the world.
Across soft drinks, beer, and cider, Carlsberg Britvic is home to many iconic and popular brands. Its compelling soft drinks range includes well-known names such as Pepsi MAX, 7UP, Tango, Robinsons, J2O and Fruit Shoot, through to fast-growing breakthrough brands including the plant-powered Plenish range and Jimmy’s Iced Coffee.
These leading soft drinks brands will now sit alongside the Group’s flagship Carlsberg Danish Pilsner, as well as 1664, Birrificio Angelo Poretti and Brooklyn Brewery beers, as well as leading British ales such as Hobgoblin, Pedigree and Wainwright.
Paul Davies, formerly CEO of Carlsberg Marston Brewing Company, will take up the position as CEO of the newly formed Carlsberg Britvic in the United Kingdom, effective 17 January 2025.
Davies said, “This is a historic moment for everyone across our unique combined multi beverage business, I am immensely proud to have the opportunity to lead this new company, featuring so many iconic brands and so many dedicated and talented people.
"As we look to the future together, Carlsberg Britvic will demonstrate the important values that underpin our dedication to our customers, our consumers, our people and our planet.
“Carlsberg Britvic combines the fantastic qualities of both businesses and our shared ambition to grow the UK beverage category through our unique proposition across soft drinks, beer and cider.
"We are all eager to build a successful future together as we create new opportunities, integrate our operations and continue to deliver excellent choice, product quality and service to our customers.
“On behalf of everyone at Carlsberg Britvic, I would like to thank all those whose effort, commitment and passion have made today possible.”
Davies began his Carlsberg career in Marketing with Carlsberg UK in 2007 and has subsequently held the positions of VP Marketing and VP Sales for Carlsberg Sweden, and VP Craft & Speciality for Carlsberg Group in Copenhagen.
In January 2019 he was appointed Managing Director of Carlsberg Poland, where he was also Chairman of the Polish Brewers Association.
Davies is supported in his role by the new Carlsberg Britvic Executive team.
The new company will combine the strong shared values of CMBC and Britvic, maintaining ambitious targets in areas such as sustainability and equity, diversity and inclusion, while also delivering the highest standards of customer service and quality.
Accompanying the official launch, Carlsberg Britvic will be revealing its new corporate identity next week, which will be rolled out across the business as part of the integration of its operations in the UK.
The UK retail sales volumes fell by 0.3 per cent in December 2024, with food stores experiencing a significant 1.9 per cent decline, according to the latest Office for National Statistics (ONS) figures.
Falls in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months with a 4.4 per cent surge, and department stores that saw a modest 1.2 per cent increase.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, expressed concern about the lackluster Golden Quarter. “Despite record-breaking sales for some retailers over Christmas, plus the later than usual Black Friday event, it was a disappointing end to 2024 for the sector…. Many retailers had little choice but to launch their Boxing Day discounting early to maximise sales and clear as much stock as possible ahead of the seasonal slowdown in January.”
Baker noted that while year-on-year retail sales (excluding fuel) rose by 2.9 per cent due to weak figures from December 2023, the absence of a "golden" Christmas boost could leave many retailers struggling.
“Retailers are resilient, but the constant bombardment of challenges means many are in ‘fight or flight’ mode which impacts pricing, people decisions, strategic investment and future growth,” she warned.
“While the longer-term economic outlook is one of cautious optimism, the hope is that consumer confidence continues building. Once this happens, shoppers should return to the high street and provide a boost to retail spending, which the sector is pinning its hopes on.”
Economist Thomas Pugh of RSM UK pointed to stagnation in the broader economy as a key factor. “The weakness in retail sales volumes in December suggests that the stagnation which has gripped the UK economy since the summer continued into the final month of the year. Admittedly, the ONS seasonal adjustment process around Black Friday can play havoc with the retail sales data at this time of year, but even averaging November and December to take account for that, retail sales volumes dropped.”
However, Pugh identified a potential bright spot in discretionary spending, highlighted by the rise in clothing sales. Looking ahead, he anticipates a gradual rebound in consumer confidence driven by wage growth and possible interest rate cuts, although he cautioned that cautious consumers might opt to save rather than spend.
“An interest rate cut in February should help consumer confidence and incomes rebound. But the risks are clearly building that cautious consumers choose to save rather than spend increases in income, raising the risk of weaker growth continuing through the first half of this year,” he said.
Silvia Rindone, EY UK&I Retail Lead, highlighted the challenges and disparities within the sector.
“Despite the overall mixed results, several food retailers saw record sales in December driven by growth in premium own-label products as consumers opted to splash out over the festive season,” she noted.
“Today’s figures demonstrate the growing divide between retailers who have adapted to changing market conditions and those who have not. The latter are increasingly falling behind as consumers become more selective about their spending.”
The rise in online spending, up 1.5 per cent in December, also reflected the evolving shopping habits of consumers. Rindone stressed the importance of retailers investing in their capabilities and understanding customer needs.
“Despite supressed consumer confidence, many retailers are delivering strong sales and volume growth. These are driven by clarity of their proposition, a deep understanding of their customers’ needs and excellent operational skills. Retailers that have failed to invest in their capabilities or proposition are more likely to be struggling and its unlikely consumer demand will increase quickly enough for many,” she said.
The Non-Domestic Rating (Multipliers and Private Schools) Bill, that could introduce a permanently lower business rates multiplier for convenience stores, passed its third reading in parliament on Wednesday (15) evening, with the Commons voting 341 to 171 in favour of the Bill.
The Bill seeks to make a number of changes to the way that business rates are calculated, including a permanently lower rate for retail, hospitality and leisure businesses with a rateable value of under £500,000.
The small business multiplier is currently set at 49.9p, while the standard non-domestic rating multiplier is set is 54.6p. The 75 per cent business rates discount for retail and hospitality businesses that was introduced after the pandemic is being reduced to 40 per cent in April, resulting in increased costs for thousands of retailers.
In evidence given to the Bill Committee in December, ACS urged MPs to set the new lower rate for retailers at 20p less than it is currently (utilising the full extent of the powers of the Bill) so that it can have a tangible impact and save retailers up to thousands of pounds on their rates bills.
During the Third Reading debate last night (15th January), both Government and opposition MPs praised the work of ACS in campaigning for rates reform.
In the debate, Sureena Brackenridge MP (Labour) said, “For years, high streets have been forced to compete unfairly with massive online retailers and retail parks, but the Bill will ensure that the largest online retailers, supermarket chains and distribution warehouses finally pay a fairer share.
"The Association of Convenience Stores has said that these changes will save small stores money that can be used directly to hire more staff, install new CCTV, and invest in the future.”
Convenience store body Association of Convenience Stores (ACS) has welcomed the progress of the bill.
ACS chief executive James Lowman said, “Retailers have had very little to look forward to recently, with increases in employment costs and reductions in their business rates discounts putting pressure on the viability of stores across the country.
"The progress of this Bill marks some good news for our sector, which would benefit from a lower rates multiplier and enable more stores to invest in the long term. We urge the Government to ensure the new multipliers are set at a level that would offset the cost of reduced business rates relief and unlock investment in villages, parades, and high streets.”
ACS has also submitted a response to the Government’s consultation on Transforming Business Rates, highlighting the importance of a business rates system that prioritises competitiveness for retailers.
This approach supports their vital role in serving communities while fostering investment, growth, and the continuation of essential services. The submission can be read here.
Two-thirds of retail leaders respondents say they will raise prices in response to increased NI costs while food inflation could hit 4.2 per cent by the end of 2025, a leading retailers' body has said citing a recent survey.
British Retail Consortium (BRC) today (15) released the findings of a survey of CFOs (Chief Financial Officers) at 52 leading retailers, revealing significant concern about trading conditions over the next 12 months.
Sentiment languished at a concerning -57 with 70 per cent of respondents “pessimistic” or “very pessimistic” about trading conditions over the coming 12 months, while just 13 per cent said they were “optimistic” or very “optimistic” (17 per cent were neither optimistic nor pessimistic).
The biggest concerns, all appearing in over 60 per cent of CFO’s “top 3 concerns for their business” were falling demand for goods and services, inflation for goods and services, and the increasing tax and regulatory burden.
When asked how they would be responding to the increases in employers’ National Insurance Contributions(NICs) (from April 2025), two-thirds stated they would raise prices (67 per cent), while around half said they would be reducing ‘number of hours/overtime’ (56 per cent), ‘head office headcount’ (52 per cent), and ‘stores headcount’ (46 per cent). Almost one third said the increased costs would lead to further automation (31 per cent).
The impact of the Budget on wider business investment was also clear, with 46 per cent of CFOs saying they would ‘reduce capital expenditure’ and 25 per cent saying they would ‘delay new store openings.’ 44 per cent of respondents expected reduced profits, which will further limit the capacity for investment.
This survey comes only a few weeks after 81 retail CEOs wrote to the Chancellor with their concerns about the economic consequences of the Budget. The letter noted that the retail industry’s costs could rise by over £7 billion in 2025 as a result of changes to employers’ NICs (£2.33 bn), National Living Wage increases (£2.73bn) and the reformed packaging levy (£2 billion).
The Budget is not the only challenge retailers are facing, with weak consumer confidence and low consumer demand also an issue. As part of the survey, CFOs offered their forecasts for the year ahead. These suggest that shop price inflation, currently at 0.5 per cent, will rise to an average of 2.2 per cent in the second half of 2025. This would be most pronounced for food, where inflation is expected to hit an average of 4.2 per cent in the second half of the year.
The forecast for sales was more muted. While sales growth is expected to improve on the 2024 level of just 0.7 per cent , at just 1.2 per cent this would still be below inflation. This means the industry could be facing a year of falling sales volumes at the same time as huge new costs resulting from the Budget.
Helen Dickinson, Chief Executive at the BRC, said, “With the Budget adding over £7bn to their bills in 2025, retailers are now facing into the difficult decisions about future investment, employment and pricing.
"As the largest private sector employer, employing many part-time and seasonal workers, the changes to the NI threshold have a disproportionate effect on both retailers and their supply chains, who together employ 5.7m people across the country.
“Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable that consumers will bear some of the burden.
"The majority of retailers have little choice but to raise prices in response to these increased costs, and food inflation is expected to rise steadily over the year. Local communities may find themselves with sparser high streets and fewer retail jobs available. Government can still take steps to shore up retail investment and confidence.
"Business rates remain the biggest roadblock to new shops and jobs, with retailers paying over a fifth of the total rates bill. The Government must confirm the planned reforms will make a meaningful difference to retailers’ bills and that no shop will end up paying more.”
Britain's annual inflation rate unexpectedly fell to 2.5 per cent last month, official data showed Wednesday, easing some pressure on the Labour government faced with economic unrest.
Analysts had forecast no change in the Consumer Prices Index (CPI) from the 2.6 percent figure in November.
The latest reading from the Office for National Statistics (ONS) comes one day after chancellor Rachel Reeves was forced to defend the government's handling of the economy following a recent sharp runup in state borrowing costs and a hefty drop in the pound.
"Inflation eased very slightly as hotel prices dipped" after rising in December 2023, noted Grant Fitzner, chief ONS economist.
"The cost of tobacco was another downward driver, as prices increased" less than a year earlier, he added.
"This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023," Fitzner said in the release.
Wednesday's data showed also that on a monthly basis, CPI rose 0.3 percent in December, down from 0.4 percent a year earlier.
The ONS added that core CPI - excluding energy, food, alcohol and tobacco - increased by 3.2 percent in the 12 months to December, down from 3.5 percent in November.
Reeves told parliament Tuesday that the government needed to "go further and faster" in its bid to kickstart economic growth in the face of UK markets turmoil.
The chancellor of the exchequer, in the role for just over six months following Labour's election win, faced a renewed call to resign by the main opposition Conservative party during a heated exchange.
Prime Minister Keir Starmer has given his full backing to Reeves.
UK 10-year bond yields, a key indicator of market confidence, reached last week the highest level since the 2008 global financial crisis.
That puts fiscal pressure on the government and could force it to cut spending and further hike taxes.
Reeves' maiden budget in October included tax rises for businesses - a decision blamed for Britain struggling to grow its economy in recent months.
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A customer shops in the fruit aisle inside a Sainsbury’s supermarket, in Richmond, West London, February 21, 2024
Britain's big retailers, including Tesco, Sainsbury's, M&S and Next, say they are stepping up their drive for efficiency through automation and other measures, to limit the impact of rising costs on the prices they charge their customers.
As the UK economy struggles to grow, the new Labour government's solution is a hike in employer taxes to raise money for investment in infrastructure and public services, which has prompted criticism from the business community.
Retailers have said the increased social security payments, a rise in the national minimum wage, packaging levies and higher business rates - all coming in April - will cost the sector £7 billion a year.
Concerns of the wider economic impact sent retail share prices sharply lower this week and drove up government borrowing costs.
In the retail sector, larger players have more scope to adapt and are cushioned by previous healthy profits, but analysts have said smaller players could find themselves under severe pressure.
Clothing retailer Next said it faced a £67 million increase in wage costs in its year to end-January 2026, but still forecast profit growth.
It reckons it can offset the higher wage bill with measures including a 1 per cent increase in prices that it said was "unwelcome, but still lower than UK general inflation". It can also increase operational efficiencies in its warehouses, distribution network and stores, the company said.
CEO Simon Wolfson said more automation was inevitable across the sector.
"With any mechanisation project you're always looking at a pay-back on it - you're saying 'what's the saving versus the cost of the mechanisation, or AI or software'," he told Reuters.
"If the price of the mechanisation doesn't go up, but the price of the labour it saves does go up, it's going to mean that more projects can be justified."
More robots?
Baker and food-to-go chain Greggs last year opened a highly automated production line at its Newcastle, northeast England, site, meaning it can make up to 4 million more steak bakes and other products each week from its current 10 million.
Tesco, Britain's biggest supermarket, is also increasing automation and will open a robotic chilled distribution centre in Aylesford, southeast England, this year.
No. 2 grocer Sainsbury's is encouraging more shoppers to use its SmartShop handheld self-scanning technology.
Even though Tesco faces a £250m annual hit from the hike in employer national insurance contributions alone, CEO Ken Murphy said it would cope.
Having navigated the Covid pandemic, supply chain disruption and commodity and energy inflation, he said Tesco was used to dealing with rising costs by finding savings elsewhere.
Finance chief Imran Nawaz said Tesco's "Save to Invest" programme was on track to deliver £500m of efficiency savings in its year to February 2025, having delivered £640m in 2023/24.
"As we look ahead it's clear it's going to be another year where we'll need to do a stellar job," Nawaz said, singling out savings from better buying by Tesco's procurement organisation, in logistics, in freight, and in cutting waste.
Sainsbury's, facing an additional £140m national insurance headwind, is similarly targeting £1bn of cost savings by March 2027.
Clothing and food retailer M&S, facing £120m of extra wage costs, said it aimed to pass on "as little as possible" to consumers.
One of the biggest names on the British high street, the 141-year-old retailer is in the middle of a successful turnaround programme and believes it can continue to grind out further savings, modernising its distribution and supply chain.
"My summary is: big job, but lots in our control and we've got to be ruthlessly focused on costs in these next 12 months," CEO Stuart Machin said.
"We talk a lot about volume growth, because the more we sell, the more that offsets some of these cost pressures."
Ian Lance, fund manager at Redwheel, one of M&S's biggest investors, said the firm was likely to be able to weather the cost challenges better than most. "They have an exceptionally capable management team and a product offering which is clearly resonating with consumers for its quality and value," he said.
But for many smaller players raising prices is the only option.
A British Chambers of Commerce survey of 4,800 businesses, mostly with fewer than 250 staff, found 55 per cent planned price increases - potentially hampering the fight to contain inflation and grow the economy.
And for some, more drastic action may be required.
British discount retailer Shoe Zone has said the additional costs of the budget meant some stores had become unviable and would be closed.