UK grocery sales hit record; Brexit and Covid-19 weigh on markets – as it happened

Graeme Wearden

from on 2020-12-08 15:55 (#5BC4F)

England's November lockdown boosted supermarket sales, with turkeys, alcoholic spirits, Christmas puddings and festive lights in demand

Latest: Record month for supermarkets as Christmas starts early
Sales of cream liquors and turkeys surge, but mince pies in decline

Earlier:

4.57pm GMT

One more thing.... car maker Honda has warned that it may be forced to temporarily halt production at its British factory, where it builds the Civic car, due to transport-related delays that could leave it short of parts.

Reuters has more details:

Whilst a number of measures are being taken to mitigate any disruption, there could be a temporary pause to production to enable any supply issue to be resolved," the company said in a statement.

Spokesmen for the company did not immediately say whether the issue was related to Brexit.

#Honda has confirmed production at its plant in Swindon could be disrupted as soon as tomorrow, due to congestion at ports causing a possible shortage of parts. Reflects how serious problems at Felixtowe, London Gateway and Southampton are becoming.

3.52pm GMT

Right, time for a recap.

Britain's supermarkets have enjoyed their busiest month ever, as the English lockdown prevented people eating and drinking out last month. Sales of Christmas food and drink also surged, as families got into the festive spirit (and spirits) early.

NEW: INEOS owned by billionaire Brexit backer Jim Ratcliffe officially end plan to build new Grenadier car in UK in Bridgend will be built in Hambach, in France, it announces...

Risk appetite is waning as the coronavirus continues to deliver staggering numbers across the US and as Senate Majority Leader McConnell continues to show no signs of warming up to a bipartisan $908 billion stimulus package.

US stocks are softer, but optimism is sky-high that Pfizer's vaccine will get the greenlight later this week, after the FDA staff report confirmed the vaccine is highly effective with no safety issues. The report also showed that the vaccine starts to work 14 days after the first dose.

3.23pm GMT

Ineos, the UK chemicals giant, has decided to build its new 4x4 off-road vehicle in France, dashing lingering hopes that it might be made in Wales.

The company has bought a factory from Mercedes-Benz in Hambach (east of Metz, close to the border with Germany).

We can confirm today that we have acquired the manufacturing facility at Hambach from Mercedes-Benz. Manufacturing at Hambach ensures we remain on track to meet our plans to deliver the Grenadier to customers in early 2022. Full statement: https://t.co/a2RKd98O32 pic.twitter.com/NHf1lSWXxP

One of Europe's most modern automotive manufacturing sites, it is home to a highly experienced and capable workforce, has an excellent track record amongst Mercedes plants for the quality of its output, and recently benefited from a major investment to enable the production of larger vehicles.

#Ineos has confirmed it will start building its Grenadier Landrover tribute in France next year. It has bought the Smart plant at Hambach from Daimler. There was a time when they talked about building it in Bridgend 1/2

Ineos says the site's location on the French-German border, only 200km from Stuttgart, gives excellent access to supply chains, automotive talent and target markets. " Which Bridgend, presumably, can't match...

2.54pm GMT

Wall Street has opened, without much fanfare.

The main indices are slightly lower in early trading, amid worries over the escalating Covid-19 pandemic (with Dr Anthony Fauci warning yesterday that the situation could worsen further in January)

2.39pm GMT

November was the biggest month ever for UK grocery sales with shoppers spending almost 11bn as the return of lockdown in England drove supermarket purchases of food and alcohol.

Sales of turkey and alcohol were up by just over a third and festive light sales soared 238% in November, according to analysts at Kantar, as shoppers brought forward preparations for Christmas and began treating themselves at home while pubs and restaurants were closed.

2.18pm GMT

The eurozone's recovery from this spring's slump was a little less vigorous than first thought.

Eurostat has revised down its growth estimate for July-September across the euro area to +12.5%, down from +12.6% last month (and an initial estimate of 12.7%).

France (+18.7%), Spain (+16.7%) and Italy (+15.9%) recorded the sharpest increases of GDP compared to the previous quarter. These countries were also among the highest decreases in the second quarter.

Greece (+2.3%), Estonia and Finland (both +3.3%) and Lithuania (+3.8%) had the lowest increases of GDP. Except for Greece, which registered a decrease of 14.1%, these other countries also had less pronounced declines during the second quarter.

Euro area #GDP +12.5% in Q3 2020, -4.3% compared with Q3 2019 https://t.co/AMnwbMACxw pic.twitter.com/8c16oCgVBB

#Eurozone #GDP growth of 12.5% quarter-on-quarter in third quarter helped by strong rebounds in #consumer spending (up 14.0% q/q) & investment (up 13.4% q/q). Net #trade strongly positive as exports (up 17.1% q/q) outgrew imports (up 12.3% q/q). Government spending up 4.8% q/q https://t.co/bwy9RMbp3k

1.54pm GMT

Our Politics Liveblog has full details on the UK-EU agreement on the Northern Ireland protocol, which has lifted the pound back to $1.337 -- flat on the day.

1.37pm GMT

Sterling is now recovering its earlier losses, after the UK and EU announced they have reached an agreement in principle on all issues" relating to the implementation of the Brexit withdrawal agreement.

This isn't a breakthrough on the free trade deal - but it is at least an encouraging signal of cooperation.

Pleased to announce that thanks to hard work, @michaelgove and I have reached an agreement in principle on all issues re the #WithdrawalAgreement implementation. This will ensure it is fully operational as of 1 Jan, incl. the Protocol on Ireland/NI https://t.co/RaWNEVbxrt pic.twitter.com/1OCjapNd3F

Delighted to announce agreement in principle on all issues in the UK-EU Withdrawal Agreement Joint Committee. Thank you to @MarosSefcovic and his team for their constructive and pragmatic approach.

I will be updating Parliament tomorrow.https://t.co/xtJ25h6ymu pic.twitter.com/OKYPLxV0jZ

UK and EU have agreed all issues on UK/NI protocol - in principle, confirms then UK will withdraw controversial clauses from Internal Market bill https://t.co/NcvIGEz5Xy

Again, doesn't make all the issues with the deal disappear, but a big step forward in improving atmosphere btw the 2 sides - govt also confirms it won't put the spiky parts the EU hated in the Taxation Bill

Note too though, we don't have the detail in black and white on what's actually been agreed

1.27pm GMT

Here's another chart showing the fall in US small business confidence:

Led by a plunge in short-term expectations. small #business optimism in the U.S. economy decreased in November, with the NFIB index falling 2.6 points to 101.. This was in line with expectations and above the historical 47-year average. Six of the 10 index components declined. pic.twitter.com/qqffxtct7x

1.02pm GMT

The pound is likely to trend higher over the short term, Latitude Investment Management's Freddie Lait tells @annaedwardsnews and @mattmiller1973 https://t.co/2ip0tqF4Xk pic.twitter.com/gBzC10SB0e

12.44pm GMT

Over in America, small firms are getting more anxious about the economic situation.

The US small business confidence index has dropped to 101.4 for November, down from 104 points in October.

NFIB first survey post election. Notable difference vs. post 2016 election when optimism about the economy soared, now it has significantly declined. This is not a political message, but a signal of the reopening temporarily stalled, while hire plans anticipate pent up demand pic.twitter.com/0g4qvPNpF0

U.S. Small-Business Optimism Declines by Most in Seven Months, 101.4

- NFIB index drops 2.6 points on virus surge, election outcome
- Labor demand remains firm, fueled by strong consumption pic.twitter.com/ThUV9SD6Ts

12.36pm GMT

There's not much sign of Christmas cheer in the markets today, as investors fret about Brexit and the pandemic.

After an underwhelming morning, the main European indices are all the red, pulling the Stoxx 600 down by 0.6%.

Despite the positive news that Britain has started to rollout a vaccine, global markets have continued their underwhelming performance this week as economic factors and rising infections still weight heavily on sentiment.

Europe is also shrugging off vaccine news as Brexit returns to the agenda. Investors are concerned that the UK and EU are unlikely to reach a compromise with the final time limit almost reached .

12.19pm GMT

The pound is still being bogged down by Brexit worries, down nearly 0.5% today against the US dollar at $1.331 and the euro at 1.099.

That's still high than yesterday morning's tumble, when there were reports that Britain was about to walk away from the trade deal talks.

Yeah, of course. We're always hopeful but you know there may come a moment when we have to acknowledge that it's time to draw stumps and that's just the way it is."

Pound traders who were jolted by the reality that the U.K. could leave the EU without a trade deal are rethinking their positions https://t.co/IEfifn0Dcm pic.twitter.com/mfDVTp092E

12.11pm GMT

Over in parliament, MPs on the Business, Energy and Industrial Strategy Committee have been hearing about the problems facing British businesses when the Brexit transition ends:

Ian Wright of @Foodanddrinkfed just told the BEIS committee that 43% of surveyed members who supply Northern Ireland said they were not going to do so in the first 3 months of next year. Clear why NI biz groups see the situation as so desperate. pic.twitter.com/kdpXrvYQKF

Ian Wright of the @Foodanddrinkfed has told @CommonsBEIS that 43% of his members who normally supply Northern Ireland won't continue to supply to NI in the first three months after the end of the transition period.

If you are still trying to negotiate a deal 14 days before it is supposed to come into effect then even the most brilliant communication is not going to work...You would need a Vulcan mind-melt to make it work," - Ian Wright,@Foodanddrinkfed, holding it together in front of MPs

11.50am GMT

In the energy sector, industry regulator Ofgem has given the go-ahead for energy networks to plough at least 40bn into the green revolution.

It will also allow them to make higher returns on their investments, after companies threatened an unprecedented rebellion against its plans to save homes 20 a year on their bills.

Ofgem's plans, set out on Tuesday, will halve the savings energy bill payers can expect over the next five years to 10 a year after softening the crackdown on company profits it proposed over the summer.

The regulator has given the green light for investments in electricity grid upgrades, which are paid for through energy bills, to climb by a fifth compared with its earlier proposals, which sought to limit spending to 25bn.

11.31am GMT

Speaking of Christmas... a third of people have already completed their festive shopping, according to a new survey from the Chartered Institute of Marketing (CIM).

This is serious news for many retailers. The high street was struggling before the pandemic, with many retailers reliant on the critical Christmas period for their sales. If seven million fewer people are going to be hitting the shops this December, then it could be devastating for shops that depend on Christmas footfall.

It's a particular concern for smaller and specialist retailers, who even with a good online offering, will have been drowned out during the lockdown by the marketing spend of the bigger brands."

11.10am GMT

Over in Germany, investor morale has picked up as people anticipate Covid-19 vaccines will be approved and start to be rolled out soon.

Economic research institute ZEW reports that its gauge of economic sentiment for Germany jumped sharply this month, from 39 points to 55 pints.

#Germany's #ZEW Index better than expected, signaling further upside for the German #DAX Index. pic.twitter.com/YIRww4uemL

The announcement of imminent vaccine approvals makes financial market experts more confident about the future.

The ZEW Indicator of Economic Sentiment increased significantly in December despite the still high numbers of new coronavirus infections. This is most likely due to the announced forthcoming COVID-19 vaccine approvals."

10.13am GMT

Neil Wilson of Markets.com says the grocers are clearly benefiting from the Covid-19 restrictions:

With little to do, restaurants shut, and Christmas parties cancelled, grocery sales are resilient - Kantar reports 11.3% year-on-year growth in the 12 weeks to Nov 29^th, and 13.9% growth last month alone.

November turned out to be the biggest month ever for the UK supermarkets. In the 12 weeks to the end of last month, Tesco sales rose 10.4%, Sainsbury's +10.8%, WM Morrison +13.7% and Asda +7.7%, with the sector seeing inflation of 1.4% over the month.

10.09am GMT

People have gone early and gone hard' on Christmas shopping at the supermarkets this year, says consumer journalist Harry Wallop:

Proof that Brits have gone early & gone hard on Christmas. Figs from supermarkets (for month to 15Nov vs last year):
+238% more spent on Xmas lights
alcohol spend +33%.
Turkey spend +36%
[via @Kantar_UKI]

Of course supermarket boom in sales of Xmas goodies during month to 15Nov hugely helped by closure of a lot of hospitality and non-essential shops.
Alcohol sales +33%. Much of growth came from spirits, with sales of cream liqueurs more than doubling vs 2019.
Via @Kantar_UKI

9.30am GMT

The latest Covid-19 restrictions and lockdown has proved extremely lucrative for the UK's supermarkets.

Take-home grocery sales rose by 11.3% during the 12 weeks to 29 November 2020, the fastest rate of growth since August.

Take-home sales during the past four weeks increased by 13.9%, as eating and drinking out of home was restricted by the English national lockdown.

UK grocery sales spike with early Christmas cheer: Take-home grocery sales rise by the fastest rate since August over the most recent 12 weeks: https://t.co/YXapdVZ5TU #GroceryMarketShare pic.twitter.com/xPkBTvSuJt

The three days before non-essential retail and hospitality closed on 5 November were especially busy, with grocery sales that week up by 17%. November as a whole saw shopper frequency hit its highest level since the beginning of the pandemic, suggesting more confidence among people going into stores.

Those factors contributed to November being the single largest month ever for the supermarkets, with 10.9bn spent over four weeks. December's numbers are likely to surpass that again, and we expect spend to be close to 12 billion in the month ahead, around 1.5bn more than last year."

8.58am GMT

As well as Brexit and Covid-19, investors are watching for signs of progress towards a new US stimulus package.

Congress is poised to pass a stopgap funding measure that will avert a government shutdown and provide lawmakers more time to negotiate an emergency coronavirus stimulus legislation amid deepening economic pain.

Negotiations over a $1.4tn catch-all spending package are playing out alongside bipartisan efforts to pass long-delayed Covid-19 economic relief.

8.44am GMT

Oil is under a little pressure this morning too, with Brent crude dropping 0.5% to $48.55 per barrel.

Traders have turned to focus on the pace of the vaccine rollouts virus, and the virus's merciless spread over the short term, while the increased probability of stretched or fresh lockdowns cloud the near term horizon.

8.23am GMT

Britain's FTSE 100 index has dipped at the start of trading, down 16 points or 0.25% at 6539.

Intercontinental Hotels is the top faller, down 2.4%, followed by banks HSBC (-2.3%) and Standard Chartered (-1%).

8.08am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Though an in-person meeting was taken by some as a positive sign, along with the fact the two sides are still talking, a UK government source said to journalists that "Whilst we do not consider this process to be closed, things are looking very tricky and there's every chance we are not going to get there."

#Brexit progress continues to disappoint as the EU and UK remain deadlocked on fish, trade and governance, and dispute settlement negotiations.

With a Wednesday deadline, #BoJo offered as a concession to remove illegal clauses from the internal bill.

Of course, the Brexit soap opera remains a key talking point, though still, little reliable or substantial information about the negotiations has been released.

UK Prime Minister Boris is on his way to Brussels for talks with his counterpart Ursula Von Der Leyen, with the market likely to remain jumpy going into tonight's trade as market participants await a definitive answer on the trade pact.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/