AEP, PFD, TATE: Stocks to watch as Brits cut back on food spending

Highlights

• Stringent restrictions are being set on food purchases by 63.4% of UK households ahead of price cap hike, suggests a recent study.
• Discretionary income of households is currently under higher pressure as compared to last year.
• Poorer households are suffering more as they spend a disproportionately higher amount of their total income on food and fuel.

Ahead of October’s energy price cap hike, UK households have started cutting back on the amount of money they’re spending on buying food. According to a study carried out by digital tech wallet HyperJar and economic research company Retail Economics, stringent restrictions are being set on food purchases by 63.4% of UK households as the ongoing cost-of-living squeeze is worsening.

While inflation is rising and the income of households is falling, Brits are worried about their food budgets being impacted. Food and fuel bills have been spiralling lately and with the energy prices rising in October, Brits would have to carefully balance their needs of staying warm and filling their belly.

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In general, consumer spending has taken a hit with rising prices. The tracker also unveiled that over the coming months, 29.6% of households are expecting to put a limit on their overall spending. Discretionary income of households is currently under higher pressure as compared to last year as after the lifting of the pandemic-related restrictions, work-related expenses have skyrocketed amid the soaring inflationary pressures.

In comparison with last year, four out of five Brits are coping with double-digit falls in the cash available for buying non-essential items after paying for their necessities. The rising food and fuel bills have hit the poorer section of the society harder as they spend a disproportionately higher share of their total income on these items.

Over 70% of UK households are planning to cut back on eating out to restrict their spending. Taking these developments into account, UK investors can keep an eye on the following food-related stocks. 

Anglo-Eastern Plantations plc (LON: AEP)

The shares of the British palm oil and rubber producer, Anglo-Eastern Plantations plc, were rallying by 0.23% at 11:45 AM (GMT+1) on Tuesday and were trading at GBX 892.00. Currently offering an annual dividend yield of 0.5% to its investors, the company has a positive EPS of 0.80. The market cap of AEP stood at £352.76 million as of 26 July with it boasting a positive one-year YTD returns of 49.66% and 23.89%, respectively.

Premier Foods plc (LON: PFD)

The leading UK-based food manufacturer’s, Premier Foods plc, shares on Tuesday plunged by 0.70% at 11:50 AM (GMT+1) and were trading at GBX 114.20. Currently, with a market cap of £992.66 million, the EPS of PFD was a positive 0.13. As of 26 July, the company has provided positive returns to its shareholders over the last year with both one-year and YTD giving returns of 3.77% and 2.10%, respectively. 

Tate & Lyle plc (LON: TATE)

The British provider of food and beverage items, Tate & Lyle plc, shares were up by 0.25% at 11:55 AM (GMT+1) on Tuesday and were trading at GBX 800.00. Currently offering an annual dividend yield of 2.9% to its investors, the company has a positive EPS of 0.51. The market cap of TATE stood at £3,204.84 million and it falls under the FTSE 250 index. As of 26 July, it has provided positive returns to its shareholders on a YTD basis at 3.62%.