Asda rationing some fruit and vegetable sales after widespread shortages
Grocery chain Asda is rationing sales of some fruit and vegetables after a bad harvest in southern Spain and north Africa led to gaps on supermarket shelves.
Asda, the UK’s third-largest grocer, has begun limiting purchases to three of each product across tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries.
Bloomberg has more details:
Other retailers may follow suit after cold weather in key agricultural locations disrupted harvests, with the impact expected to last for weeks.
Shoppers in the UK have been posting pictures on social media of empty shelves in vegetable aisles across multiple supermarkets.
Grocers become more reliant on imports around this time of year, particularly from sunnier places such as Spain. British horticultural production normally only starts in late March or April and domestic supplies have already been hit by labor shortages and the higher cost of energy and fertilizer.
There have been several reports of empty shelves at other UK supermarkets in recent days, for example:
The National Farmers’ Union has warned that farmers have been hit by rising costs, labour shortages, bird flu and post-Brexit changes to support payments, creating “volatility, uncertainty and instability” across the industry.
NFU President Minette Batters warned today that:
“The fact remains, volatility, uncertainty and instability are the greatest risks to farm businesses in England and Wales today.
Critically, those consequences will be felt far beyond farming; they will be felt across the natural environment, and in struggling households across the country,”
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My colleague Sarah Butler reported last night that unseasonable weather, storms in the Mediterranean and a cut in crops planted in heated glasshouse was leading to shortages in supermarkets.
She wrote:
Two big importers said they were managing to fulfil contracts to their main supermarket clients but had been forced to lower quality specifications, find alternative sources of supply or offer a limited range of options since the chilly weather started in January.
Industry insiders said availability of produce is down by between 30% and 40% on some crops. Wholesale prices have also shot up, adding to inflation in stores as well as empty shelves.
The harvest of peppers was down 70% in Spain and cucumbers by up to 50% in the country’s Almería region, according to the catering supplier Reynolds’ latest crop report.
The high cost of energy has also hit fruit and vegetable production in Europe, making it more expensive to heat greenhouses.
Nigel Jenney, chief executive of the Fresh Produce Consortium, has told the BBC “There’s been a myriad of individual factors”, such as:
“Weather, fuel costs, packaging and distribution costs, energy costs.”
Andrew Opie, director of food and sustainability at the British Retail Consortium, which represents UK supermarkets, says:
“Difficult weather conditions in the south of Europe and northern Africa have disrupted harvest for some fruit and vegetables including tomatoes.
“However, supermarkets are adept at managing supply chain issues and are working with farmers to ensure that customers are able to access a wide range of fresh produce.”
Tomato shortage hits UK after bad weather
Bad weather in Europe and Africa is leading to shortages of tomatoes and some other popular vegetables.
The UK relies on countries such as Morocco and Spain for tomatoes during the winter.
But in Morocco, growers have struggled with cold weather, heavy rain and floods.
Suppliers have been hit by ferry cancellations, which have affected lorry transport.
Spanish crops have also been affected by bad weather in the past three or four weeks.
Asda rationing some fruit and vegetable sales after widespread shortages
Grocery chain Asda is rationing sales of some fruit and vegetables after a bad harvest in southern Spain and north Africa led to gaps on supermarket shelves.
Asda, the UK’s third-largest grocer, has begun limiting purchases to three of each product across tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries.
Bloomberg has more details:
Other retailers may follow suit after cold weather in key agricultural locations disrupted harvests, with the impact expected to last for weeks.
Shoppers in the UK have been posting pictures on social media of empty shelves in vegetable aisles across multiple supermarkets.
Grocers become more reliant on imports around this time of year, particularly from sunnier places such as Spain. British horticultural production normally only starts in late March or April and domestic supplies have already been hit by labor shortages and the higher cost of energy and fertilizer.
There have been several reports of empty shelves at other UK supermarkets in recent days, for example:
The National Farmers’ Union has warned that farmers have been hit by rising costs, labour shortages, bird flu and post-Brexit changes to support payments, creating “volatility, uncertainty and instability” across the industry.
NFU President Minette Batters warned today that:
“The fact remains, volatility, uncertainty and instability are the greatest risks to farm businesses in England and Wales today.
Critically, those consequences will be felt far beyond farming; they will be felt across the natural environment, and in struggling households across the country,”
Downing Street has played down the prospect of tax cuts in the Budget following the surprise monthly surplus recorded in January, warning that there was still “significant uncertainty and volatility”.
The Prime Minister’s official spokesman said that the government’s “overall focus on reducing the debt remains”, telling reporters:
“It’s important to understand the context. You would expect to see a surplus in January because of the timing of self-assessment receipts.
“The only January deficit since 2015 was in 2021 during the height of the pandemic.
“So we shouldn’t place too much emphasis on a single month’s data.
“Borrowing remains at record highs and there is significant uncertainty and volatility which poses clear risks to the fiscal position.”
Walmart, the world’s largest retailer, is concerned that cautious spending by consumers could pressure profit margins – especially as interest rates keep rising.
Following its financial results today, chief financial officer John David Rainey told Reuters:
“There’s still a lot of trepidation and uncertainty with the economic outlook. Balance sheets are continuing to get thinner, savings rate is roughly half of what it was at a pre-pandemic level and we’ve not been in a situation like this where the Fed is raising at the rate that it does,”
“So, that makes us cautious on the economic outlook because we simply don’t know what we don’t know.”
Over on Wall Street, hypermarket chain Walmart has disappointed investors with its latest financial results.
Walmart has predicted a drop in earnings this year, with adjusted earnings expected to be betweem $5.90 to $6.05 a share. Walmart also reported adjusted earnings of $6.29 per share for 2022 today.
The company made total revenues of $611.3bn last year, up 6.7%, with 7.3% growth in the final quarter of 2022.
Chief Financial Officer John David Rainey says Walmart are “being cautious with the macroeconomic outlook,” explaining (via Bloomberg) that:
“There’s a lot of unpredictability around what’s happening, what will be the effect of Fed tightening on the consumer balance sheet, what is the effect of the declining savings rate.”
Shares in Walmart have dropped 4% in pre-market trading, despite president and CEO Doug McMillon insisting the retailer is “well-positioned to start this fiscal year.”
McMillon says:
“We’re excited about our momentum. The team delivered a strong quarter to finish the year, and as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year. We built momentum in the third quarter and that continues.
TUC: government running out of excuses on public sector pay
Jeremy Hunt is facing calls for a higher pay increases for public sector workers, after the UK racked up a surprise surplus of over £5bn in January,
The TUC General Secretary Paul Nowak warns that the public sector will continue to lose workers unless staff are given a fair pay deal.
“The government is running out of excuses.
“Jeremy Hunt must come out of hiding and help break the deadlock on public sector pay.
“After 13 years of pay cuts and pay freezes, nurses, teachers and millions of other public servants are at breaking point.
“If ministers don’t provide a fair pay settlement, the staffing shortages crippling our schools, hospitals and other frontline services will just get worse.”
More here:
UK factories report falling output and orders in February
The CBI has dampened the optimism over the UK economy this morning, by reporting that manufacturing output and orders have dropped.
The CBI’s latest healthcheck on UK factories has found that a net balance of 16% of manufacturers reported a drop in output volumes in the three months to February. This shows the fastest fall in manufacturing output since September 2020.
That’s down from -1% in the three months to January, and “a significant disappointment to last month’s expectations of +19%,” the CBI says.
The February CBI Industrial Trends Survey found that output volumes fell in the three months to February, and at the fastest pace since September 2020. Output is expected to rise moderately in the three months to May. #ITS pic.twitter.com/dkhysCvYH0
— CBI Economics (@CBI_Economics) February 21, 2023
Today’s Industrial Trends survey also shows that:
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Output fell in 11 out of 17 sectors in the three months to February. The decrease in output reported this quarter was largely driven by the motor vehicles & transport equipment, chemicals and paper, printing & media sectors.
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Total order books were reported as below “normal” in February, to a similar extent as in January (-16% from -17%). This was broadly in line with the long-run average (-13%). Export order books were also seen as below normal and to a greater extent than last month (-27% from -22%). This was below the long-run average (-18%).
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Expectations for average selling price inflation in the three months ahead were the lowest since May 2021 (+40%, from +41% in January), having declined steadily from the multi-decade highs seen in early 2022 (+80% in March 2022). But they remained well above the long-run average (+6%).
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Stocks of finished goods were seen as adequate in February, with the balance broadly similar to January (+9% from +12%).
Minister: need to make work more attractive
MPs on the BEIS committee are now questioning business minister Kevin Hollinrake about the government’s strategy to get over-50s back into work.
Jane Hunt MP says there are two cohorts to target; firstly, highly skilled older workers who, if they were highly paid, could afford to retire early, and secondly over-50s with ill health.
Hollinrake says that there is an international crisis of a shortage of workers, rather than a shortage of jobs.
The jobs crisis is “twice as bad in the US”, he suggest, with ten million vacancies and only five million people looking for work.
UK has fantastic record of low unemployment which is ‘exacerbating’ the issue, Hollinrake continues, with a jobless rate of 3.7% compared to 6.2% in the EU.
He agrees there has been a significant rise in economically inactivity since Covid, with an additional 500,000 people out of the labour force, and suggests that one solution is to make the workforce a more attractive place to be.
One way is through more flexible working – Hollinrake says the government is supporting a private members bill [brought by Labour MP Yasmin Qureshi] which will allow workers to request flexible working from day 1 in a job.
Second, the government is increasing the national minimum wage, which will have a “knock-on effect” through the wages system.
Weakest January for house sales recorded since 2015
House sales have got off to the weakest start to the year since 2015, HM Revenue and Customs (HMRC) figures today show.
The number of house sales taking place in January 2023 was 11% lower than the same month a year earlier, PA Media report.
Across the UK, an estimated 96,650 transactions took place, which was 3% lower than in December 2022.
It was the lowest number of house sales recorded for the month of January since 2015, when 94,150 transactions were recorded.
Jeremy Leaf, a north London estate agent, said:
“The fall in this key bellwether for the market seemed almost inevitable as it reflects the decline in not just the number but pace of sales which we saw in our offices immediately following the mini-budget and the resultant sharp rise in mortgage costs.
“Confidence takes a long time to build and can disappear very quickly, but it is slowly growing in response to reductions in those mortgage rates and inflation, as well as continuing employment stability.”
Lucian Cook, head of residential research at estate agent Savills, said:
“Given what has happened to mortgage approvals, the numbers still point to a market where equity rich and cash buyers have the upper hand, while first-time buyers and mortgaged buy-to-let investors bear the brunt of higher mortgage costs.”
Some 1,029,580 house sales have taken place in the financial year to date, between April 2022 and January this year, according to HMRC.
This is lower than the 1,154,360 house sales which took place over the same period a year earlier but higher than the 872,200 sales taking place between April 2020 and January 2021, in the early months of the coronavirus pandemic.
Royal Mail international services reinstated after cyberattack
Royal Mail international services have been reinstated at Post Offices, after the postal operator was hit by a cyber attack last month.
The Post Office has announced that customers can now send both letters and parcels again from today from its sites.
Neill O’Sullivan, Post Office managing director for Parcels and Mails, says the disruption has hurt postmasters:
“Postmasters have been the innocent victims of this faceless crime, unable to support businesses and consumers wishing to use their expertise to get parcels sent abroad.
For many small businesses, Post Offices are an integral part of their business set-up and this has been a challenging time for them too. We have worked day and night in partnership with Royal Mail to reinstate all international services via our branch network.”
Postmasters will now receive a new fixed payment for each international item they handle.
Back in 11 January, Royal Mail announced that a cyber incident was preventing it handling international mail or parcels.
On the 19th January, Post Offices were able to accept and sell postage for Letter and Large Letter sized items internationally through Royal Mail, but this excluded the sending of goods internationally.
Last month it emerged that Royal Mail had rejected an “absurd” ransom demand for $80m (£67m) from hackers linked to Russia.
UK’s over-50s worker shortage isn’t down to golf courses, MPs hear
Jeremy Hunt is wrong to suggest that over-50s need to get off the golf course and return to work to help tackle the UK’s worker shortage, MPs have been told this morning.
The Business, Energy and Industrial Strategy Committee has begun its session on the UK labour market this morning, and cited Hunt’s comments last month that older workers should continue to make a contribution to the economy, rather than just going to the golf course [in this interview with The Times].
Lucy Standing, co-founder of Brave Starts – which supports mid and late career professionals – tells the committee she agreed that older people should work.
“Every marker of succesful ageing is associated with people who think they have a sense of purpose,” Standing says.
But, she suggests the chancellor should be helping by reforming the jobs market, to make it easier for older people to return to work.
Standing explains:
Do I feel they are busy on a golf choice out of choice? I would say absolutely not.
I would say to Jeremy Hunt, if you want people to get off the golf course, or out of the yoga room, or drinking coffee, or whatever it is he thinks we’re doing, I would suggest why doesn’t he start leading the way>
There are several barriers holding older people back from the labour market, Standing explains – such as a lack for flexible jobs, outdated recruitment practices, and very few programmes to help people with career changes.
Tony Wilson, director of the Institute for Employment Studies, tells the committee that the number of 50-65s who say they’ve taken early retirement is now slightly lower than before the pandemic, having grown sharply early in the pandemic.
Many who retired early in the pandemic did so in relative financial comfort, compared to previous decades, with private pensions and savings to live off. Those people probably won’t come back to the labour market, Wilson predicts.
But there are many millions more older workers who would like to return to work, but have long-term health problems, or caring responsibilities – or simply don’t know what the right job is, or can’t find it, he says.
So, it’s not “massively helpful” to talk about the issue in terms of golf courses and coffee shops, Wilson explains.
Instead, he says “we should be talking to people about how we help them achieve what they want, that’s often to be back in decent work that is flexible, local and supportive”.
Plus, thinking about designing policy to support employers, and reshaping public policy.
Wilson concludes:
I don’t think the issue is golf course membership, or time spent on golf courses.
This morning, Resolution Foundation warned that Britain risks ending the decade with the lowest rates of workforce participation in almost 30 years unless the government takes urgent action to reform childcare and help people with health conditions.
Pound jumps as UK companies return to growth
Sterling is rallying in the foreign exchange markets, as traders react to news that UK companies are growing this month for the first time since last summer.
The pound has jumped by over half a cent to hit $1.211, the highest since last Wednesday.
The City will be calculating that stronger economic growth increases the chances of further Bank of England interest rate rises to cool inflation.
This morning’s UK PMI readings “dramatically exceed expectations”, says Daniel Mahoney, UK Economist at Handelsbanken:
The UK Composite Output Index registered at 53, far higher than market predictions of 49 and a 4.5pp increase from January’s print. This is the first time the index has come in above 50 (which indicates private sector expansion) since July 2022.
The UK services PMI is also comfortably in expansionary territory at 53.3, up from 48.7 in January, although the flash manufacturing PMI came in at 49.2, indicating marginal contraction.
Such figures may indicate that forecasters are too downbeat about the UK economy, Mahoney adds:
We will, of course, have to await further data releases to make firm conclusions, but there is no doubt that these much better than anticipated PMI readings could signal that forecasters are currently being too downbeat on short-term growth prospects for the UK economy.
And while it is welcome that the UK economy may be proving more resilient than expected, there is evidence in this release that inflation from the services sector could be especially stubborn, which may indicate that the Bank of England has to tighten monetary policy further.
