Associated British Foods (ABF), the owner of retail-chain Primark, today (5) issued a buoyant trading update for the 16 weeks up to 6 January.
The group's grocery arm clocked in a revenue of £1,414 million for the period, with ingredients coming in at £698 million. Revenue from agriculture for the same 16 weeks raked in £572 million while sugar added its own sweetness to the figures with a revenue of £825 million.
The group's grocery unit’s sales grew 4 per cent, reflecting “good demand” across a number of its international brands and regionally-focused businesses. Its international brand businesses, which include Twinings, Ovaltine, Blue Dragon, Patak’s, Jordans and Mazzetti, accounted for approximately a third of total grocery sales.
Twinings saw “strong” sales momentum led by volume growth across its largest markets, the UK, US and France. The group noted that this reflected increased distribution, particularly in the US, strong commercial execution to strengthen in-store visibility and a significant increase in investment and focus on marketing.
Growth also benefitted from recent product launches, as ABF continued to expand its presence in the wellness category, including a growing portfolio of herbal and infusion teas.
Meanwhile, its UK-focused businesses, which accounted for approximately a quarter of grocery sales, also performed relatively well.
Allied Bakeries had a “much-reduced” operating loss compared to 2023 as a result of improved sales and operational performance. Silver Spoon delivered “strong” growth, benefitting from lower pricing and a brand refresh. The group’s Ryvita brand also made good progress, supported by recent product launches and advertising.
Adjusted operating profit margin for the Grocery segment improved to 12.1 per cent overall, driving adjusted operating profit up 17 per cent to £511m. ABF noted that the margin improvement reflected an easing in input cost pressures, strong performance in its US-focused businesses, and reduced losses in Allied Bakeries, partially offset by an increase in marketing investment.
The grocery arm was boosted easing input costs, increased investment in marketing, and new product launches. Retail, however, surpassed all the other departments by taking a whopping £3,376 million in revenue. Primark saw sales inching up 7.9 per cent in the 16 weeks, with the retail chain increasing its market share to a new high of 7.1 per cent in the 12 weeks leading up to 10 December.
Looking ahead, ABF said: "We continue to look forward to a year of meaningful progress in both profitability and cash generation, with the profitability improvement being driven by a recovery in Primark margin, a marked improvement in British Sugar profitability, and by reduced losses at Vivergo.
"We also feel more confident in the delivery of the Primark adjusted operating margin in this financial year, driven by a further improvement in product gross margin. This should insulate us well against potential additional costs of supply due to the disruption in the Red Sea, should they arise."
The government has introduced the Tobacco and Vapes Bill the parliament, which includes a proposal for a licensing scheme for retailers selling tobacco, vape, and nicotine products across England, Wales, and Northern Ireland.
This development, welcomed by industry leaders, aims to curb illegal sales and prevent youth access to these products. If passed, the licensing scheme would be supported by on-the-spot fines of £200 for retailers found selling to minors, although some industry voices have called for even tougher penalties.
The UK Vaping Industry Association (UKVIA) welcomed the inclusion of the licensing proposal, saying the step is crucial to tackling illicit sales.
“We have been consistently calling on successive governments to introduce a robust and effective industry licensing scheme,” John Dunne, UKVIA’s director general, said, noting that a well-enforced licensing programme could generate over £50 million annually to support a Trading Standards enforcement initiative.
However, Dunne expressed concern that the £200 fine would not be a sufficient deterrent for rogue traders and argued for higher penalties, especially for distributors.
The bill arrives in the wake of other regulatory announcements, including a ban on single-use vapes set for June 2025, and a new £2.20 per 10ml duty on refillable vape liquid and prefilled pods from the Autumn Budget.
Additionally, the Bill proposes broad restrictions on vape advertising and sponsorship and includes powers to control flavors, display, and packaging of vaping products.
Marcus Saxton, chair of the Independent British Vape Trade Association and group chief executive at vape retailer Totally Wicked, commended the government’s intent to enforce stricter penalties for illegal sales but warned against “regulatory overkill.”
Saxton highlighted that overly restrictive measures could undermine vaping’s role as a quit aid for adult smokers, who rely on it as a harm reduction tool.
“Excessive restrictions on the types of products that our members can provide may reduce the products’ appeal. Even worse, they may contribute to continued misperceptions about the harm of vaping relative to tobacco smoking,” Saxton said.
“Specifically, the role of flavours in supporting adult smokers to a successful quit attempt is accepted and understood by most public health stakeholders, and we believe to have been fundamental to the success of vaping in reducing smoking rates.
“Therefore, any reference to potential powers to restrict flavours is very worrying, as it threatens the government’s own goal of the UK becoming smoke free by 2030.
Dunne also noted that the government needs to “take on board the critical role that flavours play” in the success of vaping as a harm reduction tool, calling for a on restricting inappropriate flavour names, not flavours.
“We will want to understand the detail of these powers as it is imperative that the new government establishes a balanced approach to vaping policy which safeguards against the very real challenges of youth vaping and illicit products, while preserving and promoting vaping as the most successful stop smoking tool available for adults,” he added.
The Chartered Trading Standards Institute (CTSI) voiced strong support for the licensing proposal, which aligns with its call for better regulation of youth vaping. CTSI chief executive John Herriman termed the bill as a step toward reducing youth access to vape products but stressed the importance of adequately funding Trading Standards Services to enforce these new measures.
“We stand ready to support businesses to understand their obligations, and take action against anyone who ignores those obligations, as well as being prepared to take action against businesses that flaunt them,” Herriman said.
“We feel the need to stress once again that enforcement of all these measures will be enabled by proper resourcing of local trading standards services and we look forward to seeing the government’s proposals on this as the bill passes through the parliament.”
Arrival of customary "pre-festive" deals boosted food sales though overall sales suffered in October as cash-strapped shoppers stayed at home, holding off purchases amid uncertainty over the budget and fears over rising energy bills.
According to data from the British Retail Consortium and the consultancy KPMG published today (5), sales increased by 0.6 per cent compared with October 2023, less than half the three-month average growth rate of 1.3 per cent.
Food sales increased 2.9 per cent year on year over the three months to October, against a growth of 7.9 per cent in October 2023. This is below the 12-month average growth of 4.1 per cent. For the month of Oct, food was in growth year-on-year.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said that October’s "disappointing" sales growth was partly driven by half term falling a week later this yea.
"Uncertainty during the run-up to the Budget, coupled with rising energy bills, also spooked some consumers. Fashion sales took the biggest hit as the mild weather delayed winter purchases. Health and beauty sales remained buoyant, with beauty advent calendars flying off the shelves.
“After a painful Budget for retailers, the hope is it will be less painful for households in the immediate term and consumer appetite will pick up in time for the Black Friday sales and festive season. Retailers must now grapple with over £5bn of new costs announced by the Chancellor, including in Employer National Insurance, Business Rates and the uplift in the National Living Wage. Managing this will hold back investment and growth in the short term, while further squeezing already-low margins and risking inflation," she said.
Commenting on sales performance of food and drink sector performance, Sarah Bradbury, CEO at IGD, said,“In October, UK food and grocery sales saw a modest step up in growth compared to September, but this period does not include the last five days of the month, when an uptick of spending around Halloween might have been expected.
“However, the arrival of customary ‘pre-festive’ deals in categories such as wine helped boost sales in the second half of the month. Importantly - volume, as well as value growth, remained positive despite a downbeat mood in the wider economy reflecting nervousness around potential tax hikes in the government’s budget.
“Shopper Confidence continues to reflect very differing shopper experiences, with lower income households feeling much more negative than higher income households. Retailers will be hoping that measures announced in the budget, such as the uplift in the minimum wage, will give a much-needed confidence boost to lower income shoppers and that the nation is looking forward to the coming festive period with more optimism.”
Nisa Local Smithy Green, led by store owners Mitesh and his brother Hepesh Halai (affectionately known as Gaz), joined forces with Ince CE Primary School to host a fun-filled fundraising day for Talk First, a local charity supporting families and children.
Originally intended to take place outside the Nisa store, the overwhelming community interest prompted the school to generously offer their grounds, transforming the day into a larger celebration of community spirit.
The event was packed with excitement, featuring stalls, games, and a crowd-favourite Gaz getting soaked in the stocks! The collaborative efforts of the school, Talk First, Wigan Council, and the Wigan Mayor highlighted the true power of partnership within the local community.
The fundraising exceeded expectations, with more than £1,600 raised on the day. Ince CE Primary School contributed a generous £410, and Nisa Locally Smithy Green further boosted the total by matching the school's donation through their Making a Difference Locally (MADL) fund. This brought the overall amount raised to an impressive £2,421.
Reflecting on the event, Hepesh said: "A representative from Talk First called it ‘Community Partnership working at its very best!’ We couldn't agree more. This day showed what can be achieved when our community comes together for a great cause."
He extended heartfelt thanks to the school staff, volunteers, Talk First representatives, and the local dignitaries who made the day such a success. Through Making a Difference Locally, Nisa retailers support local causes by donating a percentage of sales from Heritage and Co-op products in-store, directly benefiting their communities.
Kate Carroll, Nisa’s Head of Charity, added, "This event exemplifies the incredible impact our retailers can make through MADL. We are so proud of Nisa Locally Smithy Green and the Ince community for their unwavering dedication to helping local causes like Talk First."
Forecourt operator EG Group on Friday said it has completed the sale of its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa.
The group added that the transaction proceeds will be used to repay debt.
As previously announced, following completion of the transaction, Zuber has now stepped down from his executive leadership capacity at EG Group, becoming a non-executive director.
His brother and co-founder Mohsin Issa will lead the group as sole chief executive.
EG Group has in June announced the sale of the remaining UK business for £228 million to Zuber, who will focus on leading and growing a new UK petrol forecourt and convenience retail business, including food service, to be branded ‘EG on the Move’.
“Mohsin and I have realised and surpassed our own expectations and the group is a UK success story on a global stage,” Zuber said in September, as the deal received all relevant approvals.
“Our business represents the very best standards and customer experience of leading retail brands in fuel, foodservice, grocery and merchandise. I am very proud of what we have built together and look forward to being part of the Group’s continued success.”
Mohsin added: “This is a very exciting time for EG Group and the wider sector. I am delighted to return to lead EG Group where there are many opportunities. I would like to also pay tribute to Zuber’s effective leadership, incredible contribution, dedication and commitment to EG Group.
“We embarked on this exciting enterprise journey together knowing no boundaries, moving from one site in Bury to the world class global convenience business that it is today. I look forward to continuing to work with my brother and receiving his strategic counsel as a fellow shareholder and board member on the EG Group board.”
EG has an extensive global network spanning nine international markets across the UK, continental Europe, US and Australia with more than 5,500 sites and employing about 38,000 colleagues.
The Justice and Home Affairs Committee today (5) published a letter to the Minister for Policing, Crime and Fire Prevention, Dame Diana Johnson MP, highlighting how unacceptable levels of shop theft is causing serious harm to society.
After conducting an inquiry into retail crime, the committee finds that shop theft is an underreported crime that is not being effectively tackled, leading to a devastating impact on the retail sector and the wider economy. The Committee heard that there are almost 17 million incidents of shop theft annually, with few leading to an arrest and costing the retail sector almost £2 billion last year.
The nature of the offence has evolved from individualised offending to relentless, large-scale, organised operations accompanied by unprecedented levels of violence. Shop theft is now seen as a lucrative profit-making opportunity which is being exploited by organised criminal networks.
Pointing out that there is a widespread perception that shop theft is not treated seriously by the police, the Committee recognises the need for quicker reporting systems, better data collection and intelligence sharing between police forces across the UK.
The Committee welcomes the work of Pegasus, the new national scheme to tackle organised crime in the retail sector and recommends that existing schemes such as Business Crime Reduction Partnerships (linking police and local businesses) should all be part of a National Standards Accreditation Scheme.
Outlining the conclusion, the committee called for an urgent need to phase out the term shoplifting as it trivialises the crime. The Committee supports the plan to repeal the offence of “low-value shoplifting” and supports the creation of a standalone offence of assaulting a retail worker.
Improved reporting systems are required to enable retailers to report crime to the police quickly and easily, said the committee, recommending improving mechanisms for police and criminal justice systems to recognise and record when a crime has taken place in a retail setting.
The committee has also called on for "increased funding to community-based reoffending and rehabilitation initiatives" to help divert prolific drug and alcohol addicted offenders away from further offending.
Public awareness campaigns are needed to target the stolen goods market, stated the committee while expressing support for the introduction of regulations and best practice guidance for the use of facial recognition technology by private companies.
Welcoming the committee's findings and recommendation, ACS chief executive James Lowman said, “We strongly welcome the recommendations of the Committee which are sensible measures aimed at prioritising shop theft response both locally and nationally, as well as improving reporting rates. We know that millions of incidents of theft go unreported every year because retailers feel as though nothing will be done, which is a trend that we need to reverse or risk effectively decriminalising theft. Theft is a damaging crime, committed by organised groups that are stealing to order and take advantage of people struggling with the cost of living.
“We are looking forward to continuing working with the Home Office and Police and Crime Commissioners across the country to put in place the recommendations of the report and close the gap between reported crime and the reality of the situation in local shops.”
The Lords Committee has been considering the impact of shop theft on the retail sector since the end of the last parliament, hearing from different stakeholders involved in retail, academia and crime prevention on ways to improve reporting, reduce reoffending, and improve retailers’ confidence in the police.
ACS gave evidence to the Lords Committee in September of this year, sharing the experiences of members with reporting shop theft, the challenges of reporting crime, and the perceived lack of action from the police when thefts are reported to get repeat offenders off the streets.
In the Budget last week, the Chancellor announced that it was taking action to deal with the sharp rise in shop theft, providing additional funding to tackle the organised gang that target retailers.