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Greggs warns on rising prices
The boss of Greggs has warned that prices will have to rise as the bakery chain grapples with higher costs and slower sales in cities.
Roger Whiteside said the business was in “uncharted territory” as supply constraints, the war in Ukraine and sluggish recovery of consumer demand post-Covid push up costs.
“We see ourselves as value leaders in the food-to-go market, and that market has been forced to put prices up – we’re no different,” he said. “But we make sure that the gap between us and our competitors never narrows so that we’re always the best value.”
The bakery chain today reported a 27.4% increase in sales in the first 19 weeks of the year, partly because the beginning of 2021 was hampered by Covid lockdowns.
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Vodafone shares 3% higher, FTSE 100 dips
Vodafone shares are up 3% after the disclosure that Emirates Telecommunications has taken a 9.8% stake in the FTSE 100-listed group.
The “mutually beneficial” strategic investment by the former Etisalat business has been made on the eve of Vodafone’s full-year results on Tuesday. The new major shareholder declared it is “fully supportive” of Vodafone’s management and its current business strategy.
It is not seeking board representation and says it is confident about the company’s ability to “unlock value” from its business activity and other potential strategic transactions.
Vodafone shares rose 3.56p to 121.38p in a downbeat session for the wider London market as today’s weak figures from China’s economy caused the FTSE 100 index to drop 56.28 points to 7361.87.
Fallers of more than 2% included British Airways owner IAG, Rolls-Royce and Royal Mail, while credit checking firm Experian dropped 63p to 2633p after it acquired a minority stake in Brazilian fintech Mova.
The FTSE 250 index was 117.61 points lower at 19,804.28, with Dunlem among the leading fallers following a 3% drop.
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Ryanair posts loss, sees fragile recovery
Low-cost airline Ryanair today posted an annual loss of 355 million euros (£302.1 million), but said it expects a return to the black this year amid a “fragile” recovery.
Bookings have improved in recent weeks, although customers are leaving it later than usual to commit to their summer holiday plans.
There is, however, pent-up demand and Ryanair believes that peak summer fares will be ahead of pre-Covid levels. It plans to grow 2023 financial year traffic to 165 million customers, from an improved 97 million in the year to March 31 and 149 million pre-Covid.
Despite the expected recovery, boss Michael O’Leary said the impact of Covid and the Ukraine war meant it was impractical to provide “a sensible or accurate profit guidance range” to investors.
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Markets hit by weak China data
An unexpected fall in China’s industrial production rate has put markets back under pressure after the much-needed rally seen on Friday.
The 2.9% year-on-year decline represents the first decline since March 2020 and comes amid the impact of Covid lockdowns on levels of factory activity. Economists had predicted a small rise in output, albeit much slower than the 5% rise seen the previous month.
China’s retail sales, which were also released this morning, told a similar story after the bigger-than-expected 11.1% decline in April.
Michael Hewson, CMC Markets chief market analyst, said: “These numbers are unlikely to improve significantly in the coming months given that China is unlikely to alter its zero-Covid policy, given the vulnerability of its health service to too many infections, which means that after a poor first quarter, the second quarter could well be even worse.
“The poor nature of these numbers, along with the probability of how much improvement can be expected given China’s zero-covid policy, Asia markets have seen a mixed start to the week, which looks set to translate into a lower open for markets here in Europe.”
Brent crude dropped 2% to $109.60 a barrel on the China concerns, while the FTSE 100 index is forecast to open 22 points lower at 7396.
The S&P 500 was close to bear market territory before Friday’s rally, although this improvement failed to a sixth week in a row of declines.
