Britons bruised by a cost of living crisis will not start spending strongly again until the new Labour government sets out its tax and spending plans, and interest rates fall further, the boss of supermarket Sainsbury's has said.
According to chief executive Simon Roberts, despite falling inflation, higher wages, and solid employment levels, UK shoppers remain nervous about spending on bigger ticket items.
"Discretionary markets continue to be difficult," said Roberts, a more than 35-year veteran of the UK retail sector who has run Britain's second-biggest supermarket chain since 2020.
"Consumers inevitably are wanting to be clearer about what's going to happen next and for that reason we see a continued caution in discretionary spending," he said.
Recent surveys have shown UK consumer confidence has plunged in the wake of Prime Minister Keir Starmer's warnings about the state of the British economy and the likely need for tax increases in an Oct 30 budget, prompting fears about trading in the run-up to Christmas.
Sainsbury's has a more than 15 per cent share of Britain's grocery market, trailing only Tesco but a quarter of Sainsbury's sales are from non-food products versus about 7 per cent for Tesco, making it more vulnerable to a broader downturn.
"We need to see interest rates continue to come down because that directly impacts household spending. I think clarity in the budget, one way or another, is helpful," Roberts said, on a tour of Sainsbury's revamped flagship superstore in Cobham, south west of London.
Despite the economic uncertainty, Roberts is confident Britons will still splash out on food and drink at Christmas.
"What we've seen over the last three or four years through the pandemic and the inflation crisis, Christmas has been a time when people in the end want to be together with their friends and family and loved ones.
"There's absolutely no complacency at all in our business. We've had three strong Christmases and we're preparing for a fourth one to come."
He said Sainsbury's was well placed to benefit from what he saw as the big consumer themes for Christmas - more people dining at home rather than eating out, time-poor consumers preferring one shop for all of their food and general merchandise needs, and a focus on value.
Under Roberts, Sainsbury's has benefited from a strategy to match discounter Aldi's prices on over 650 essential items and provide better offers for members of its popular Nectar loyalty scheme, financed by cutting costs. He has stepped up product innovation and moved to improve quality, availability, and customer service. Its shares are up 16% over the last year.
The CEO said it was critical the government came through on its promise to fundamentally reform business rates, noting Sainsbury's pays almost as much tax on its properties as it makes in operating profit.
To support and champion independent wholesalers, a brand new buying group title The Wholesale Group has been created and will officially launch on Jan 1 2025.
Described as "the buying group for the future" and "home of the independent wholesalers" The Wholesale Group will be led by joint managing directors Tom Gittins and Jess Douglas with Martin Williams and Coral Rose as co-chairs. The Wholesale Group will bring together the members of Confex and Fairway Foodservice to create the new group.
The Wholesale Group represents more than 12 per cent of UK wholesale and has £4.47bn annual turnover. The group will boast of 253 depots across the UK, serving more than 349,000 customers.
“Put simply, this is the buying group that the sector needs,” said Gittins.
“The Wholesale Group will be the only UK buying group to offer an extensive retail and foodservice range and expertise, alongside logistics efficiency via central distribution. It has an award-winning foodservice own brand supported by bespoke, coordinated member marketing and retail member support. And there are no membership fees and every member receives a share of the profits. We are delighted to launch The Wholesale Group as we know it is the solution for the independent wholesaler.”
Douglas adds, “The sector has changed dramatically and it is crucial that we do things differently to accommodate these changes for both our members and suppliers, and The Wholesale Group will lead the way. Driven by data and technology and with a crystal-clear focus on service, it will be the largest delivered buying group, the largest foodservice buying group and the second largest retail buying group in the UK.”
Rose states, "For our supplier partners, The Wholesale Group provides an efficient and powerful route to market through enhanced scale and capability.
“For our members, it is clear that Confex and Fairway have long held similar cultures and ethos, focused on celebrating and championing family businesses with members at the heart of everything we do. By coming together, we retain this member-centric approach but are even stronger, while building for the future.”
“While the foundations of The Wholesale Group are built upon years of expertise and specialist knowledge of the sector, this is a buying group created for the future,” said Williams.
“This is the solution for the independent wholesaler. It will provide something no other group can, and this will enable us to become the genuine home of independent wholesalers. We look forward to an incredibly exciting future.”
Things have had a shake-up at SPAR Milnthorpe with the launch of an Ann Forshaw’s Milk Shed, the new vending machine offering up fresh whole milk and flavoured milkshakes.
The machine has been placed adjacent to the SPAR store and Shell forecourt on the A6. It is dispensing gently pasteurised and non-homogenised milk fresh from the dairy in 500ml or one litre servings, competitively priced at £1 and £1.60 respectively.
Milkshakes are available too at £1.80 for a 500ml size or £2.80 for a one litre serving, and are in five mouthwatering classic flavours of Chocolate, Strawberry, Banana, Vanilla, and Salted Caramel. A sixth Limited Edition milkshake flavour will always be on rotation to complement the core range. At launch this week it is Mint, and this will be replaced by White Chocolate flavour on Friday 15th November.
All the milkshakes use natural flavourings and colourings where possible and do not contain the ‘Southampton Six’ food colours which have been found to have an adverse effect on activity and attention in children. Customers will also have the option to purchase Milk Shed branded reusable glass bottles at £1.80 for a 500ml or £2.20 for a one litre size, enabling repeat, plastic free purchases.
Recyclable cardboard cups and paper straws offer a free and an environmentally friendly alternative. SPAR Milnthorpe’s Milk Shed will be operational 24-hours a day, and it becomes the third Ann Forshaw’s Milk Shed to launch.
The original Milk Shed concept was launched at Ann Forshaw’s Alston Dairy at Longridge, near Preston, in February of this year. After an incredibly successful launch, SPAR Padiham Road in Burnley became the first SPAR North of England store to receive one in September.
Fiona Drummond, Company Stores Director at James Hall & Co. Ltd, owner of SPAR Milnthorpe, said: “This is the first Milk Shed to launch at one of our forecourt sites, and we are thrilled to bring our Milk Shed offer to Milnthorpe which we believe will be a real asset for the community.
“It is such a simple but effective concept. Our high-quality fresh milk is very competitively priced, and the milkshakes are delicious treat and suitable for all ages with the conscious decision to utilise natural flavourings.”
Ann Forshaw’s and its associated Alston Dairy was acquired by the James Hall Group of Companies in December 2022. James Hall & Co. Ltd is a fifth-generation family business which serves a network of independent SPAR retailers and company-owned SPAR stores across Northern England six days a week from its base at Bowland View in Preston.
In a significant escalation in backlash to plans announced by Chancellor Rachel Reeves, farmers are threatening to target ports and disrupt supermarket supply chains to protest against Labour tax rises, states a recent report, claiming that there are plans to withhold produce and livestock in a bid to trigger food shortages,
The Chancellor placed a 20 per cent inheritance tax on farmers’ assets worth more than £1 million in her first Budget. Previously, tax breaks designed to allow family farms to pass down the generations were exempt from the divisive 40 per cent duty.
According to The Telegraph, some farmers are now openly discussing plans to take a more radical course of action. The discussions are understood to be taking place among farmers who have previously organised tractor “go-slows” on roads as well as protests in February which saw 5,000 farmers gather at the Senedd to voice dissent over environmental targets.
“They will block every port in the UK if they have to,” the report quoted an insider. “[This] could be a possibility to slow down the supply in the supermarket. The Government and supermarkets need to realise the control we have as farmers. The good thing with that is you have farmers everywhere so you can cover all the ports.”
Tom Bradshaw, president of the National Farmers Union (NFU), said that his members felt “betrayed” by Labour government.
“I had a meeting with farmers this week and they are absolutely irate,” he said. “If they hadn’t said they weren’t going to do it, there would still be dismay but not the sense of betrayal. Anyone living longer than five years is thinking, will a future government do something different? The leader of the opposition has said they will overturn it.”
The NFU has organised a lobbying event later this month in Parliament where members will hold meetings with their MPs – but the union declined to back a mass demonstration in the capital on the same day, telling its members that unless they have registered for the parliamentary event they should stay away.
There are also reports of plans for a co-ordinated “sewage strike” in a move that risks causing chaos for water-treatment companies and creating a mountain of waste.
Clive Bailye, the founder of the Farming Forum, the UK’s biggest agricultural online forum, said that some farmers were looking at other actions, “from not taking sewage sludge to not letting food leave the farm or sending livestock to market”.
“I can see produce being withheld.”
He said that although they were “very worried about going to prison” he felt his position as founder of the Farming Forum put him in a strong position to help, adding: “We know we need to do something but we are not sure what it will look like yet. But I’ve got thousands of messages from farmers asking me how, when, where.”
A government spokesman said, “With public services crumbling, a £22 billion fiscal hole inherited from the previous government and 40 per cent of Agricultural Property Relief going to the 7 per cent of the wealthiest claimants, we made a difficult decision to ensure the relief is fiscally sustainable.
“Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3 million without paying any inheritance tax – this is a fair and balanced approach.”
Post Offices handled £3.69 billion in cash deposits and withdrawals in October, reaching the highest monthly amount since July when a record £3.78 billion was handled over the counter, shows new figures released today (11).
Personal cash deposits totaled £1.52 billion which was up 2.2 per cent month-on-month (£1.49 billion, September 2024) and up almost 15 per cent year-on-year (£1.32 billion, October 2023). October 2024 was only the third time personal cash deposits have exceeded £1.5 billion in a single month (previously July and August 2024).
Business cash deposits totaled £1.21 billion which was up almost 4% month-on-month (£1.16 billion, September 2024) and up almost 8% year-on-year (£1.12 billion, October 2023). October 2024 was only the second time business cash deposits have exceeded £1.2 billion in a single month (previously July 2024).
Personal cash withdrawals totalled £928 million which was up 6.6% month-on-month (£871 million, September 2024) and up 13% year-on-year (£821 million, October 2023). The amount withdrawn over the counter was just below the record amount withdrawn in a single month set in December 2023 (£930 million).
Ross Borkett, Post Office Banking Director, said, “Our figures indicate that demand for cash is as strong as ever as people rely on cash to budget, particularly in the run-up to Christmas, and businesses rely on it to survive a volatile trading environment. Postmasters and their teams play a vital role in supporting small businesses to trade by providing a convenient and secure location to deposit their cash takings with many branches open long hours and some at weekends.”
Post Office Cash tracker data – October 2024
Cash deposits value (business & personal)
MOM%
YOY%
Cash withdrawals value (business & personal)
MOM%
YOY%
Total cash deposits & withdrawal value for October 2024
As at 16 October, 88 hubs have been opened in partnership between Cash Access UK and the Post Office. 168 Banking Hubs have now been announced by LINK with further openings planned for later this year.
Family members and employees of post office branch owners who were not considered eligible to make claims over the Horizon IT scandal may be allowed to apply for compensation, postal minister Gareth Thomas told the inquiry into the scandal on Friday (8).
During the hearing, Thomas stated that the government has been looking into the “gaps” in the eligibility criteria for those wanting to make claims under the four redress schemes being administered by the Post Office and the government.
“[Employees and counter assistants] are one of the gaps in the compensation process,” said Thomas. “We are actively looking at what we can do to address those gaps. As indeed we are looking at family members affected very badly by the Horizon scandal and cannot claim compensation either. It was one of those issues identified as being very significant.”
The current schemes exclude applications from family members and assistants at branches because only the person with a direct contract with the Post Office is eligible to apply as managers and counter assistants at branches have a contract with the owner-operator, not the Post Office. And while many branches are run by family teams, not all members have the contract with the Post Office.
Thomas also said that if claimants to the existing schemes can file by Christmas he is confident that payouts can be made by the end of March, the unofficial deadline sought by the leading campaigner Sir Alan Bates.
“Officials have been talking to claimants’ lawyers and looking at potential timings of those claims coming in,” he said. “If claims come in by Christmas we will be able to have made offers of paid financial redress by the end of March.”
Thomas however stressed that no date has been set for a deadline for final applications to be received.
Thomas also said that the government intends to publish a green paper next year to get nationwide views on the future governance options for the Post Office including the ownership of the 11,500 branches. He added that former minister Kevin Hollinrake held “constructive” talks with Post Office workers about ultimately transferring ownership through mutualisation.
“It is difficult to be anything other than concerned about culture in the Post Office,” Thomas said on Friday (8). “There has been some early conversations with stakeholders … about how to change that governance and also look at improvements to culture going forward. We are thinking we will publish a green paper next year to invite wider views about the future of the Post Office.”