Food brands ‘raised prices faster than their costs rose’; Saudi Arabia fund buys Heathrow stake – business live | Food & drink industry

The share price of Halfords Group has fallen by 18% after the motoring and cycling retailer warned it was seeing signs of a UK consumer slowdown with a “challenging” market for new bikes.

The London-listed company said it had seen volatile trading patterns and “some market softening in our discretionary big-ticket categories, which has been reflected in slower LFL [like-for-like] sales growth.”

The market for bikes in particular was “challenging and below expectations due to well documented consumer environment”, Halfords said.

Investors are on the look-out for any signs of weakening consumer appetite, as rising interest rates add to difficulties for households hard-pressed by inflation.

Halfords still managed to increase its revenues by 14% to £874m in the half year to 29 September compared with the same period last year, but that was mostly thanks to strong growth in its car services business. Retail sales rose by only 3.2%.

Graham Stapleton, Halfords’s chief executive, said:

Despite the challenging and volatile trading environment and slower than expected recovery in some of our markets, we have made a good start to the year, with substantial sales and profit growth, and increased market share across the business. At the same time, we supported our customers through the ongoing cost of living crisis by delivering great value – when they need it most.

In the face of continuing economic uncertainty, we remain fully focused on optimising every element of the business, and I’m particularly pleased with the very strong performance of Autocentres, where we are delivering significantly improved returns. In light of this, we are accelerating capital investment in the garage services operating model and customer experience in 10 towns in the balance of this financial year.

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Food brands in the UK have pushed up their prices by more than costs increased, the UK’s competition regulator has said after examining the sector in response to concerns about “greedflation” adding to the cost of living crisis.

The Competition and Markets Authority (CMA) said that “three-quarters of brands that provided comparable data have increased their unit profitability during the recent period of high food price inflation”, in a report published on Wednesday.

The regulator added that “in most cases, shoppers can find cheaper alternatives”, suggesting it does not have concerns over unfair competition.

However, the regulator said that this was not the case in the baby formula market. It will look at whether “ineffective competition in the baby formula market could be leading to parents paying higher prices”.

It also said it will look at the impact of loyalty scheme pricing by supermarkets.

Sarah Cardell, chief executive of the CMA, said:

Food price inflation has put huge strain on household budgets, so it is vital competition issues aren’t adding to the problem. While in most cases the leading brands have raised prices more than their own cost increases, own label products are generally providing cheaper alternatives.

The picture is different when it comes to baby formula, with little evidence that people are switching to cheaper products and limited own label alternatives. We’re concerned that parents may not always have the right information to make informed choices and that suppliers may not have strong incentives to offer infant formula at competitive prices.

Saudi Arabia buys 10% of London Heathrow airport

Saudi Arabia’s powerful Public Investment Fund (PIF) has paid £1bn for a stake in London’s Heathrow airport, as infrastructure group Ferrovial sells a quarter of the business.

Ferrovial late on Tuesday said it had agreed the sale of a quarter of London Heathrow, which it has owned for 17 years, for £2.4bn.

The Saudi PIF will take 10%, while European private equity group Ardian will buy 15%.

The agenda

• 9:30am GMT: Bank of England consumer credit (October; previous: £1.39bn; consensus: £1.5bn)

• 9:30am GMT: Bank of England mortgage approvals (October; prev.: 43,328; cons.: 45,000)

• 10am GMT: Eurozone economic sentiment (November; prev.: 93.3; cons.: 93.7)

• 10am GMT: Eurozone consumer confidence (November; prev.: -16.9; cons.: -16.9)

• 10:30am GMT: Competition and Markets Authority chair at House of Lords committee

• 1pm GMT: Germany harmonised inflation preliminary year-on-year (November; prev.: 3%; cons.: 2.6%)

• 1:30pm GMT: US GDP second estimate (Q3; prev.: 4.9% annualised; cons.: 5%)