- According to BRC, Shop Price deflation eased to 0.8% year-on-year in August against July’s decrease of 1.2%.
- It also predicted that food prices are set to rise in the next few months due to rise in commodity prices, increased transport costs.
The trade association for retail businesses in the UK, British Retail Consortium (BRC), came out with a press release on Wednesday saying higher food prices are on the horizon. In August, the average prices in British shops were 0.8% lower than the previous year. This was a relatively smaller decline as compared to the recent months, and it represents increasing costs for stores, as per BRC. Contrary to majority of the other inflation measures, the measure of shop price inflation used by BRC is typically negative. July’s reading reflected an average price fall of 1.2%, while the annual average price decline was 1.5% over the past 12 months.
According to Helen Dickinson, the chief executive of BRC, "There are some modest indications that rising costs are starting to filter through into product prices". She added that because of delays in global shipping and scarcity of microchips, rising prices were mostly observable for electrical goods.
Due to increasing commodity prices as well as rising transportation costs due to lack of truck drivers, food prices were also to rise potentially in the upcoming months. The shortage of 90,000 HGV drivers must be handled on priority by the Government by increasing the number of HGV driving tests, offering temporary visas for EU drivers, and making the necessary changes to the funding methods for the HGV driver training.
Another reason for the rising food prices is the higher post-Brexit costs for the food imports from the European Union. The British consumers are going to suffer if the Boris Johnson government doesn’t take swift actions.
Let us look at 5 FTSE listed stocks that will be affected due to the price rise:
Wynnstay Group plc (LON: WYN)
Wynnstay Group Plc is engaged in manufacturing and supplying agricultural products across the United Kingdom. It operates via two segments, which include Agriculture and Specialist Agricultural Merchanting. Equine and small animal feeds are also manufactured and distributed by the company through wholesalers and retailers. With a market capitalisation of £105.72 million, the company is listed on the London Stock Exchange since 2004 and is also a constituent of the FTSE AIM ALL-Share index. The earnings per share is 0.28 and its 1-year return is 58.46%.
Wynnstay Group Plc’s shares were trading at GBX 524.00 at 10.00 AM on 3 September 2021.
Stock Spirits Group PLC (LON: STCK)
Headquartered in Wooburn Green, Stock Spirits Group PLC is a British alcoholic beverage business which is engaged in production and distribution branded spirits in Central and Eastern Europe. The company exports its products, which include a wide range of spirits, to around 50 countries across the globe. With a market capitalisation of £786.00 million, the company is listed on the London Stock Exchange since 2013 and is also a constituent of the FTSE ALL-Share index. Its Earnings per share is 0.14 and its 1-year return is 77.70%.
Stock Spirits Group PLC’s shares were trading at GBX 395.00 at 10.00 AM on 3 September 2021.
Devro plc (LON: DVO)
Headquartered in Chryston, Devro plc is a UK-based company, which along with its subsidiaries manufactures and supplies collagen casings across the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. The company is a world leader in this product and sells it to food manufacturers via distributors and agents. With a market capitalisation of £368.12 million, the company is listed on the London Stock Exchange since 1993 and is also a constituent of the FTSE ALL-Share index. Its Earnings per share is -0.25 and its 1-year return is 26.28%.
Devro plc’s shares were trading at GBX 223.00 at 10.00 AM on 3 September 2021.
Glanbia plc (LON: GLB)
Headquartered in Kilkenny, Ireland, Glanbia plc is a global nutrition group with operates across 32 countries. It operates via three segments, which include Glanbia Performance Nutrition, Glanbia Nutritionals, and Glanbia Ireland. The company holds a leading market position in products like cheese, vitamin and mineral premixes, and sports nutrition etc. With a significant market capitalisation of £3,701.60 million, the company is listed on the London Stock Exchange since 1998. Its Earnings per share is 0.49 and its 1-year return is 54.45%.
Glanbia plc’s shares were trading at €223.00 at 10.00 AM on 3 September 2021.
Bakkavor Group Plc (LON: BAKK)
Bakkavor Group is a multinational food manufacturing company which specialises in fresh prepared foods. With the help of its subsidiaries, it delivers and markets fresh prepared foods across the United Kingdom, the United States, and China. The London-based company was ranked 27th in the 2015 Sunday Times Top Track 100. With a market capitalisation of £670.97 million, the company is listed on the London Stock Exchange since 2017, and is also a constituent of the FTSE ALL-Share index. Its Earnings per share is 0.06 and its 1 year return is 104.91%.
Bakkavor Group Plc’s shares were trading at GBX 116.46 at 10.00 AM on 3 September 2021.