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March 30, 2020

As Greencore gets punished, is it time for UK stock market suspension, too?

Greencore's shares tumbled after a coronavirus-affected trading update. Isn't it time manufacturers, particularly those keeping the UK fed, got a helping hand?

By Dean Best

Greencore’s shares tumbled today (30 March) after a coronavirus-affected trading update. Simon Harvey asks if it’s time manufacturers, particularly those keeping the UK fed, got a helping hand.

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  • What impact is inflation having on UK retail sales?
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  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

It’s not only suppliers to the foodservice market feeling the pinch from coronavirus as ‘non-essential’ businesses like cafes and restaurants are forced to close to curb its spread, but also some manufacturers serving retailers, too, despite more people eating at home.

Ireland-based convenience food producer Greencore, which makes private-label sandwiches, salads and chilled snacks for the UK market, said today (30 March) it had experienced a “marked reduction” in demand for “food-to-go” products at the retail level and has had to put some workers on leave, supported by the country’s government job-retention scheme.

Greencore said orders for other “convenience” foods – the company’s portfolio also takes in ready meals, soups and sauces – are holding up but the company has taken the sensible option of suspending financial guidance and has asked investors to disregard any previous indications over performance, with a wave of other companies no doubt to follow.

Not only is it difficult to provide accurate assumptions over future performance in this unprecedented environment but it’s also pretty futile given the severe disruption and turmoil from Covid-19 and the uncertainties that now abound.

More importantly, it would be timely for some drastic measures from regulators to protect food manufacturers, and those in other industry segments, from the current sell-off in stock markets. While Greencore suspended its guidance today, a general suspension of trading would surely be well-received, too?

An already vexed general public are seeing their hard-earned retirement savings whittle away for reasons beyond their control, while companies are seeing their valuations plummet. Greencore was punished today by its open approach, with its shares down almost 6% at the time of writing, while the FTSE-100 index was little changed.

The London Stock Exchange had already recognised the risks by asking members not to publish financial results more than a week ago. And with a global recession a foregone conclusion at this stage, isn’t it time that manufacturers, particularly those keeping the country fed, got a helping hand?

After all, it will be these same companies, hopefully if they are still around, which will be called upon to support a recovery once coronavirus has been beaten.

Related Companies

Free Whitepaper
img

What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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