A lockdown-driven boom in the UK pet population is creating huge opportunities for retailers owing to the addition of 1.5 million pets across the country, says a recent exclusive research by market-leading manufacturer Mars Petcare, which also adds that the 72 per cent of pet owners view themselves as “parents” rather than mere “owners” of pets.
As Brits sought out the mental health benefits and companionship of pet ownership during lockdown, the number of dogs and cats in the UK surged by 7 per cent year-on-year in 2020.
As revealed in Mars Petcare’s second annual petcare category report, Pet therapy: The retail opportunities of the pandemic pet boom, the surge in pet ownership is being driven by young urbanites, with 55 per cent of new pet owners living in cities and a third aged under 40.
This group is more likely to favour pedigree breeds of dogs and cats and has a particular penchant for smaller ‘toy’ dog breeds. The number of shih tzus, daschunds, pugs and chihuahuas living in the UK surged by 141 per cent, or 74,000 animals, between 2016 and 2020.
The number of pedigree cats in the country has also surged, with the British Shorthair (Britain’s most popular purebred pussy) population surging by 25.4 per cent to 1.1 million animals between 2016 and 2020. The number of Persian cats in Britain has more than tripled and Bengals are up 71 per cent.
Zoe Taphouse, Category & Market Activation Director at Mars Petcare UK, said, “Unprecedented growth in pet ownership and the shifting demographics of ownership are driving huge demand for specialist products that cater for animals’ specific needs and build closer bonds between owners and pets.
“The new generation of pet parents are spending more money on products that give animals optimum nutrition for the life stage they’re at. They’re giving pet food as much consideration as the food they eat themselves, and trends in human food and drink are being reflected in the category.”
Total sales of pet food and litter have surged by 10.8 per cent, a staggering rise worth £45m.
Mars Petcare’s Crave brand is named as the UK’s fastest-growing dog treat. Sale of its Protein Strips, Chunks and Chews dog treats up 257.2 per cent to £3.1m in the past year.
Natural Goodness range under the Cesar brand is the UK’s bestseller in premium wet dog food.
Cadbury’s has not been granted a royal warrant for the first time in 170 years after it got dropped from King Charles’s list of warrants.
Queen Victoria first awarded Cadbury with the title in 1854 which was then repeated by the late Queen Elizabeth II in 1955 who was a huge lover of the chocolate.
Following the decision, the look of Cadbury products is expected to be undergoing a significant change
Cadbury told The Sun, "Yes, practically this means that we will remove the Royal Arms from all of our packaging.
"However to be clear, there will be no change to the iconic Cadbury purple which is not by Royal appointment. Cadbury purple has been used for Cadbury chocolate products for more than a century and is synonymous with the brand, this won’t change."
The reason for sudden the removal of the royal title is not known but Cadbury is not the only company to lose such an endorsement.
Another big brand missing from the list is Unilever, which manufactures goods including Marmite, Magnum ice-cream bars and Pot Noodles.
Apart from Cadbury's and Unilever, 100 other companies had their title removed by the Monarch. Luxury chocolate maker Charbonnel et Walker Ltd has also been bumped from the list since the last under Queen Elizabeth II’s name in April 2023.
Those who have lost their warrants were told of the decision by letter, but not informed of the reason.
They have 12 months to remove any royal warrant-associated branding from their items.
The King released the list of the 400 companies that received his royal warrant this year, including includes 386 companies previously holding warrants bestowed by his mother, Queen Elizabeth II.
These range from the official 'suppliers of Martini Vermouth', Bacardi-Martini, to Command Pest Control Ltd, Dunelm for soft furnishings, Foodspeed for milk, Kellogg's for cereals, florist Lottie Longman, and McIlhenny as the official supplier of Tabasco hot sauce.
Each warrant is granted for up to five years at a time. The king first issued warrants in 1980, when he was Prince of Wales.
Some firms gained warrants for the first time, including those connected with Queen Camilla. They include hairdresser Jo Hansford and Wartski jewellers. The latter made the king and queen’s wedding rings when they got married in April 2005.
Plans to convert a vacant South Shields pub into a convenience store have been given the green light, despite objections from CAMRA beer campaigners.
South Tyneside Council’s planning department has approved an application for The Jolly Steward site in the borough’s Harton ward.
Plans from One Stop Stores Limited, a major retail convenience business, were submitted earlier this year in a bid to change part of the site at Fulwell Avenue into a retail use.
A planning application submitted to council officials described the site as a “vacant former public house” and noted the new development would create jobs, including three full-time employees and 10 part-time roles.
The development aimed to convert the pub into a retail shop with ancillary staff residential accommodation to the first floor, alterations to the building’s elevations, new ramp structures at entrances and a new air conditioning and refrigeration plant to the rear.
Proposed external alterations to the building included new windows, doors, ramps and signage, as well as “infilling” some windows and doors.
A total of 14 car parking spaces were also proposed, including three resident car parking spaces, two staff parking spaces and nine customer car parking spaces (including two disabled parking bays), along with four cycle spaces.
During a council consultation exercise on the plan, a single objection was submitted from CAMRA (Campaign for Real Ale) about the loss of the pub as a ‘community asset’ and campaigners said there was “no justification” from developers on this issue.
The CAMRA representation, included in a council report, added: “If running the Jolly Stewart as a public house is currently ‘unviable’ for the current owner, could it be viable for another operator?
“Change of use should only be considered once meaningful attempts to market this community facility as a going concern have been made, at a realistic market price, for a suitable length of time and following suitable consultation with the local community.”
A petition with seven signatories was also submitted to the council in support of the shop conversion proposal, describing the development as a “welcome addition to the wider community”.
The petition said that the proposal would “not result in a significant increase in traffic to the area due to the close walking proximity the shop’s location will provide”.
After considering the planning application and assessing it against planning policies, South Tyneside Council’s planning department approved it on 13 December.
Council planners, in a council decision report, said The Jolly Steward pub had “stopped trading and the land is no longer being used”.
Council planners noted the proposed shop would “serve a primarily local catchment” and that the gross floorspace proposed was “modest in size and reflective of the size of unit likely to be suited to a small convenience store serving a local catchment”.
The council decision report added: “It is considered that the sequential test is satisfied in this instance and that there would be no significant harm to the vitality and viability of the borough’s defined centres subject to a condition restricting the range of goods that can be sold from the premises to primarily convenience goods only.
“Furthermore, the proposal would result in the re-use of a currently vacant building and would provide social and economic benefits (such as additional jobs) to the immediate vicinity and wider borough.”
Council planners also said the plans would be acceptable in terms of design, highway safety and deliveries and that there would be no “unacceptable impacts on the amenities or privacy of the occupiers of any neighbouring properties.”
Under planning conditions, the development must be brought forward within three years.
Proposed opening hours for the shop at the site will be 7am-10pm, seven days a week.
(Local Democracy Reporting Service)
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Vino Convenience Store on Metheringham High Street
A shop in a village near Lincoln has had its premises licence revoked after police discovered an illegal worker being paid below the minimum wage.
Lincolnshire Police officers urged North Kesteven District Council’s alcohol and entertainment licensing sub-committee to revoke the licence for Vino Convenience Store on Metheringham High Street during a review on Tuesday (17 December).
The committee heard that management had been “operating in such a manner that amounts to criminal activity”.
Officers first carried out a compliance check on 21 March, where they found no evidence of a written policy to prevent alcohol sales to under-18s or staff training related to that policy.
Although management claimed in an email sent on 4 April, that outstanding issues had been resolved, a follow-up visit on 10 October, revealed otherwise.
Upon entering the store, officers questioned the Designated Premises Supervisor (DPS), who stated she had never seen a policy or received any training and was, in fact, looking after the store “as a favour”.
Police then returned to the store a few hours later that day to find a male worker and inquired about his right-to-work status.
It then transpired that he was not allowed to work in that role and that he was paid around £600 a month with no payslip for working approximately 20 hours a week.
“Our inquiries found that he arrived in the UK under a skilled working visa in health and social care and had worked for a period of time in this field. But at the time of this encounter, he no longer worked for the sponsor and had no right to work in the shop,” a representative from the force said.
Mr Sureshkanth Arumugam took over the licence for the property in October 2023 alongside Thanusha Kaliyaperumal. Mr Arumugam is also listed as the license holder for two other businesses in the North Kesteven area – Ashgrove Convenience Store in Dorrington and Crescent Store in Leasingham.
In April 2023, officers visited the store in Dorrington, where they encountered a male behind the counter whose English was poor. Following this, checks were made with the Home Office Immigration Compliance and Enforcement team, which confirmed he was an illegal worker who could have been arrested.
This demonstrated how the illegal worker found at Vino Convenience Store was “not a one-off”.
Other issues found with the store in Metheringham included non-compliant age verification signage and alcohol seen on shelves with no price markings. Officers also insisted that “recent intelligence” has found the store is selling vapes to a 14-year-old.
Ian Holland, who attended the review in support of Mr Arumugam, stated: “I’ve known Suresh for about six years now and he’s always been an excellent man.”
He claimed that he has witnessed staff in the Leasingham store checking ID for restricted items and also highlighted how the licence holder was paying for the illegal worker’s rent and food, explaining why he was only being paid £600 a month.
Mr Arumugam claimed he believed the man had the right to work there but later admitted he had “made a mistake.” He also insisted he was “verbally training” staff in selling age-restricted items.
(Local Democracy Reporting Service)
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Cocoa beans are pictured next to a warehouse at the village of Atroni, near Sunyani, Ghana April 11, 2019
Behind a record surge in cocoa prices this year, a corner of financial markets that drives the cost of chocolate underwent a seismic shift: the hedge funds that oiled its workings headed for the exit.
Confectionery prices, from candy bars to hot chocolate, are heavily influenced by futures contracts for cocoa beans. These financial instruments, traded in London and New York, allow cocoa buyers and sellers to determine a price for the commodity, forming a benchmark for sales across the world.
In the middle of last year, hedge funds - a class of investors that use privately pooled money to make speculative bets - started pulling back from trading cocoa futures because price swings in the market were raising their cost of trading and making it harder to make profits.
They accelerated their retreat in the first half of this year as cocoa prices hit a record in April, driven by supply issues in West Africa, according to Reuters calculations based on data from the US Commodity Trading Futures Commission (CFTC), which oversees the New York market, and ICE Futures Europe, an exchange that compiles figures for trading in London.
"This market became increasingly volatile," said Razvan Remsing, director of investment solutions at Aspect Capital, a $9.3 billion London-based fund that uses coding and algorithms to find trades. "Our system's response was to trim our positions."
Aspect slashed the exposure to cocoa in its Diversified Fund from nearly 5 per cent of its net asset value in January to less than one percent after April, according to a presentation reviewed by Reuters.
REUTERS
The departure of hedge funds and other speculators caused liquidity in the market to slump, making it harder to buy and sell, stoking volatility to record highs and fueling the price spike still further.
Reuters spoke to a dozen fund executives, cocoa market brokers and traders who said the retreat has left lasting strains on the market. That has resulted in greater gaps between the price at which cocoa can be bought and sold, and has prompted some industry players to seek alternative instruments, leaving a lasting impact on the sector.
This month, the number of futures contracts held globally at the end of a given trading day - a key indicator of market health known as "open interest" - hit its lowest since at least 2014, the global figures show, a sign the futures market overall has shrunk significantly. Data prior to 2014 was not available.
On Wednesday, New York cocoa futures prices topped their April peak.
The futures market is a crucial cog in the cocoa industry, allowing producers and chocolate companies to hedge their exposure to swings in the price of beans.
Futures dictate income for the farmers and low-income nations that produce the world's cocoa - the majority of which comes from Ghana and Ivory Coast in West Africa.
Hedge funds and speculators have become bigger players in commodity markets over the past two decades as the value of their overall assets has grown. But, as purely financial investors, they have no need to remain in the market at times of stress.
The impact of hedge funds' exit illustrates how reliant trading has become on these lightly regulated funds that increasingly shape financial markets. Reuters has reported this year on how hedge funds are piling into the euro zone's $10 trillion government bond market, drawing regulatory scrutiny, and on their growing sway in European stock trading.
Contacted by Reuters, the CFTC declined to comment. A representative for Britain's regulator, the Financial Conduct Authority, said that, in line with its market supervision practice, "we have been working with trading venues and participants to monitor the orderliness of the market."
Bernhard Tröster, an economist at the Austrian Foundation for Development Research (ÖFSE) in Vienna, who last year co-authored a paper on the growing role of financial actors in commodities derivatives markets, said the withdrawal of hedge funds had helped fuel the crisis in cocoa markets.
"When markets became so volatile this year, it was clear how hedge funds and other financial actors have become so important," he said.
Supply issues hit prices
Hedge funds and other speculators' share of the market peaked at 36 per cent in May 2023, the highest in at least a decade, after which their retreat began, the global data calculated by Reuters show.
Then, at the start of this year, global cocoa prices soared after top producer Ivory Coast was hit by adverse weather and disease. Number two producer Ghana fared even worse, with smuggling, illegal gold mining on cocoa farms and sector mismanagement added to the mix.
In early February, cocoa prices surpassed a previous record high set in 1977. Executives at five hedge funds told Reuters they began to withdraw as volatility grew and the cost of trading increased.
When markets become too hot, exchanges require speculators to increase the amount of collateral they put down per futures contract, raising their costs. Lawrence Abrams, president of Absolute Return Capital Management in Chicago, said the cost of trading a single cocoa futures contract soared from $1,980 in January to $25,971 by June.
High prices and volatility, combined with falling liquidity, began to affect "our system's trading and risk management decisions," Abrams said, whose fund sold out before prices peaked in April. He declined to detail how much his fund managed, citing regulatory reasons.
Ripe cocoa pods grow on a tree at a farm in Assin Foso, Ghana, November 20, 2024REUTERS/Francis Kokoroko/File Photo
Many hedge funds promise investors they will not exceed a certain amount of risk, meaning that if a certain market becomes too volatile they have to reduce their exposure.
The difference between prices offered and sought for futures, the so-called "bid-ask spread", soared following the hedge funds' withdrawal. That has made trading harder: lower liquidity and wider spreads mean traders struggle to execute large trades without moving overall prices.
"You need speculators," said Vladimir Zientek, a trading associate at brokerage firm StoneX, referring to hedge funds, which are not among his clients. "Without speculators in the market, you lose a lot of liquidity, which allows for these very wide and erratic market swings."
By mid-April, New York contracts CCc1 hit a then-record above $12,000, up three-fold from January, prompting hedge funds to sell down their positions.
"Trends don't last forever," said Remsing at Aspect Capital. "Stay too long in size and you stand to give back all your gains."
Hedge funds' share of the cocoa futures market dropped to 7 per cent in late May, its lowest in at least a decade, the global data show.
One European broker, who requested anonymity to discuss clients' trades, said that panic in the market increased in March and April as liquidity drained away.
Volatility in cocoa futures hit an all-time high in May, up five-fold from a year earlier, according to data from the London Stock Exchange Group (LSEG).
Daily average price swings that month neared $800, some 15 times the levels of a year earlier, according to a Reuters analysis of figures from market data provider PortaraCQG.
Riskier markets
For major trading houses that buy and sell cocoa beans - a group that includes Singapore's Olam, Switzerland’s Barry Callebaut, and US-based Cargill - the liquidity drain and associated price surge exacerbated the more than-$1 billion dollar hit they took on their futures positions.
The losses came earlier this year after Ghana, following a disastrous harvest in the October 2023 to September 2024 season, delayed delivery on nearly half the beans the nation had pledged to sell, upsetting cocoa traders' futures market strategies.
These traders typically use futures to lock in prices achieved for cocoa beans, or to hedge against the risk of falling prices.
But that strategy unraveled as Ghana delayed its deliveries. Traders were forced to liquidate, at steep losses, short positions for the month of expected delivery, and take new short positions.
REUTERS
The market turmoil has prompted some trading houses and producers to seek alternatives to futures.
Australian investment bank Macquarie, a big player in commodity markets, told Reuters it sold over-the-counter products to trading houses, processors and chocolate makers when cocoa volatility hit record levels this year, and demand remains high.
One major agri-commodities trader is now using such bespoke contracts, according to a source who requested anonymity citing sensitive commercial relationships. They declined to comment on the magnitude of the business.
Such products typically protect buyers against narrower price swings than is possible with futures, limiting their use, a European broker said, declining to be identified to freely discuss clients' activity.
'Cocoa tourists'
Some hedge funds have returned to the market. Along with other speculators that trade using investors' cash, they accounted for 22 per cent of futures trading this month, according to the global data. But buying and selling in the cocoa market's altered landscape has become harder.
Zientek, the trading associate at StoneX, said bid-ask spreads can now top 20 "ticks" - $200 per contract - compared to about 2-4 ticks before cocoa's rally to record highs.
"This makes larger orders tougher to execute without seeing an immediate distortion in the market," he said.
Daniel Mackenzie, managing director of Cocoa Hub, a UK-based company that sources and sells cocoa beans to artisan chocolate makers, said higher and more volatile prices were forcing small and medium-sized makers to decide between passing costs to clients or reducing product sizes.
One chocolate maker he worked with has been shuttered and another sold, he said, without providing further details.
As hedge funds exited, short-term investors such as day-traders – which buy and sell assets within a single trading day – have stayed in the market, the European broker and the broker at the agri-commodities bank said.
The cohort that includes day-traders this month accounted for 5 per cent of the market, about the same as the start of the year, the global data show.
Day-traders cannot fulfill the liquidity-provision role traditionally played by hedge funds, the two brokers said.
"I like to call them 'cocoa tourists' - they move in, hold a position for a day or two, then move out," the European broker said.
(Reuters)
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A woman enters the Selfridges department store on December 13, 2024 in London, England
The UK retail sector is bracing for a challenging but opportunity-filled 2025, according to Jacqui Baker, head of retail at RSM UK. While the industry grapples with rising costs and heightened crime, advancements in artificial intelligence and a revival of the high street offer potential pathways to growth, she said.
The latest Budget delivered a tough blow to the retail sector, exacerbating existing financial pressures. Retailers, who already shoulder a significant portion of business rates and rely heavily on a large workforce, face increased costs from rising employers’ National Insurance Contributions.
“Higher costs will also eat into available funds for future pay rises, benefits or pension contributions – hitting retailers’ cashflow in the short term and employees’ remuneration in the longer term,” Baker said.
“Retailers must get creative to manage their margins and attract footfall and spend, plus think outside the box to incentivise employees if they’re to hold onto talented staff.”
On the brighter side, falling inflation and lower interest rates could ease operational costs and restore consumer confidence, potentially driving retail spending upward.
High street resurgence
Consumers’ shopping habits are evolving, with a hybrid approach blending online and in-store purchases. According to RSM UK’s Consumer Outlook, 46 per cent of consumers prefer in-store shopping for weekly purchases, compared to 29 per cent for online, but the preference shifts to 47 per cent for online shopping for monthly buys and to 29 per cent for in-store. The most important in-store aspect for consumers was ease of finding products (59%), versus convenience (37%) for online.
“Tactile shopping experiences remain an integral part of the purchase journey for shoppers, so retailers need to prioritise convenience and the opportunity for discovery to bring consumers back to the high street,” Baker noted.
The government’s initiative to auction empty shops is expected to make brick-and-mortar stores more accessible to smaller, independent retailers, further boosting high street revival, she added.
A security guard stands in the doorway of a store in the Oxford Street retail area on December 13, 2024 in London, EnglandPhoto by Leon Neal/Getty Images
Meanwhile, retail crime, exacerbated by cost-of-living pressures, remains a significant concern, with shoplifting incidents reaching record highs. From organised social media-driven thefts to fraudulent delivery claims, the methods are becoming increasingly sophisticated.
“Crime has a knock-on effect on both margins and staff morale, so while the government is cracking down on retail crime, retailers also have a part to play by investing in data to prevent and detect theft,” Baker said.
“Data is extremely powerful in minimising losses and improving the overall operational efficiency of the business.”
AI as a game-changer
Artificial intelligence is emerging as a transformative force for the retail sector. From personalised product recommendations and inventory optimisation to immersive augmented reality experiences, AI is reshaping the shopping landscape.
“AI will undoubtedly become even more sophisticated over time, creating immersive and interactive experiences that bridge the gap between online and in-store. Emerging trends include hyper-personalisation throughout the entire shopping journey, autonomous stores and checkouts, and enhanced augmented reality experiences to “try” products before buying,” she said, adding that AI will be a “transformative investment” that determines the long-term viability of retail businesses.
The Amazon Fresh store in Ealing, LondonPhoto: Amazon
As financial pressures ease, sustainability is climbing up the consumer agenda. RSM’s Consumer Outlook found 46 per cent would pay more for products that are sustainably sourced, up from 28 per cent last year; while 44 per cent would pay more for products with environmentally friendly packaging, compared to 36 per cent last year.
“However, ESG concerns vary depending on age and income, holding greater importance among high earners and millennials. With financial pressures expected to continue easing next year, we anticipate a renewal of sustainability and environmentally conscious spending habits,” Baker noted.
“Retailers ought to tap into this by understanding the preferences of different demographics and most importantly, their target market.”