Today, we look at how hard the pandemic has hit Morrison's profits, how April's trade breakdown is causing worries among wholesalers due to Brexit and how Britain's consumer spending has got steadily higher through March. Enjoy!
Britain's consumer spending has climbed throughout early March
The people of the UK have accelerated the pace of spending after a drop at the start of this year when Britain went back into this third lockdown that we're all thoroughly enjoying. A look at the analytics based on credit and debit card purchases have been handled by the Clearing House Automated Payment System (CHAPS) has risen by 10% during the week of March 4th this month, which allows it to stand at 83% of its average during February. It was predicted that the UK economy would shrink by around 4% during the first 3 months of 2021 before the inevitable recovery period during the easing of lockdown “ so this news appears to be a pleasant surprise. Spending on staple goods and wares typically rise around the turn of the month and the latest reading has stated that 120% of February's 2020 average sales, a huge rise in profits that very few saw coming. This possibly reflects how people are cooking for themselves more rather than eating out and relying on take away menus more than usual.
Pandemic hits Morrisons profits hard
Morrison's have confirmed that whilst its sales have benefitted from a growing demand in their supermarkets over the last 12 months, the profits have taken a major dive from the costs that were related to operating its business during the pandemic. Over the past year, the supermarket giants pre-tax before exceptional have nosedived by 50.7% to around £201 million after facing £290 millions of extra expenses, which includes covering for staff bonuses, worker absence, higher costs of distribution and more seasonal waste. Morrisons also opted to return £230m of business rates relief. It should be noted though, that the group's like-for-like sales have gone up over 8.6% over the period that was well above the 0.8% growth from the year previous. This happened after trade was boosted by the change to eating at home for most of us and when schools and offices were shut. Total revenue, however, was all the way up 0.4% to £17.6 billion!
April trade breakdown feared by major wholesalers due to Brexit
Many British retailers have been advised to secure their core fresh and chilled goods line by next month since wholesalers and trading bodies have warned of the upcoming border regulations that could cause availability issues to various product lines. As of the first of April, any goods that are of animal origin including milk, meat and eggs are going to require additional checks as they enter the UK from the EU for the first time under these new regulations. The Federation of Wholesale Distributors and Scottish Wholesale Association (SWA) have stated that this could impact availability and advised retailers to stock up accordingly before the deadline sets in an uncertain future for British supermarkets begins.