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Even amid a week away from the office, one could not fail to be aware of our industry making headlines, not least Tesco's (to-be-expected) drop in half-year profits.
That the UK's largest retailer reported a 12% fall in first-half earnings was not a surprise, given its profit warning in January. The retailer has invested GBP1bn in revitalising its UK operations and CEO Philip Clarke insisted the group’s efforts were beginning to pay off, pointing to a 0.1% rise in underlying sales during the second quarter, which halted an 18-month sales slide.
However, such a small increase in like-for-likes indicates severe pressure on underlying volumes and LFLs fell 0.9% in last year's second quarter. Even Clarke admitted Tesco will need more time to win over consumers. Moreover, Tesco's problems aren't just limited to the UK. Legal changes in South Korea hit Tesco's profits in what is its largest market in Asia, earnings in Europe fell and its loss-making US venture Fresh & Easy is under scrutiny.
On the same day as Tesco's first-half update, UK rival Sainsbury's published its latest trading figures. Many analysts said Sainsbury's first-half sales beat the City's expectations, its performance a marked contrast to Tesco's travails.
Nevertheless, not everyone in the Square Mile was impressed. "When we strip out inflation, growth in convenience and growth in the internet, LFL volumes are down over 3% in the core estate. This may mean that Sainsbury is not in as bad a position as its competitors, but ultimately this rate of volume decline will present major problems," Investec analyst Dave McCarthy said.
Meanwhile, in Germany, the world's fourth-largest retailer Metro Group issued a profit warning, blaming a "worsening" of conditions in Europe for its decision to cut its EBIT forecast for 2012. In many ways, it is non-food that is Metro's main problem, although there is uncertainty and continued speculation over the future of its Real hypermarkets outside Germany. Metro has already promised it will reveal its plans for Real next month.
Last week saw just-food on the ground in Washington D.C. at a conference held by US food manufacturers association the GMA and retailers group the FMI. The conference focused on sustainability and the fact the industry associations for US food manufacturers and retailers jointly held the event suggests they know how important it is for both sides of the sector to work together to alleviate its impact on the environment.
Our contributing editor Ben Cooper was in attendance and filed the key news and views from the event, which you can find here. The event was well received by a number of attendees. Robert ter Kuile, senior director for environmental sustainability and global public policy at PepsiCo, said bringing manufacturers and retailers together was "critical" and "very beneficial".
This week, just-food will be in London, reporting from the IGD's annual convention, which has a line-up including CEOs from Tesco, Sainsbury's and Marks and Spencer and senior executives from Heinz, Unilever and Amazon.
Next week, we will be in Brussels as Europe's food industry body FoodDrinkEurope discusses how the sector can play its part in driving economic recovery on the Continent (and, no doubt, attendees will reflect on the challenge they face in growing their own businesses).
And, of course, it has been mentioned before in recent editorials but, later this month, just-food will be at the huge SIAL trade show in Paris. Last week, we started our daily diary featuring exhibitors at the event and this will continue up until the start of the show. If you are a SIAL exhibitor, email us for the possibility of having your news and new products featured in our diary.
Until next time...