A Christmas steal

This year it is not just Grinches that can go on a Christmas shopping spree without having to part with too much of their hard earned cash. Thanks to the supermarket price wars the feast, pudding and roast beast, is getting cheaper. The best value high street purveyors of turkey, spuds and brandy butter are offering their wares at double-digit percentage point discounts this year compared to last. Overall, a bargain meal for eight will cost a more than reasonable £2.53 per head, a 4.93% decline from 2014.

The deflationary effects of cost cutting by supermarkets is estimated to have dragged overall food and drink prices 2.7% lower over the year according to research by the British Retail Consortium/ KPMG Sales Monitor. The overall cost to the grocery industry is estimated at more than £1.5 billion. Good news for shoppers has been bad news for shareholders with both Tesco and WM Morrison – two of the top three listed supermarkets by market share – sharply underperforming the UK’s FTSE100 index.

The price cutting is hurting and may not be sustainable in the long run. Food prices are also volatile, depending on weather conditions, disease, pests and transport costs. The most inflationary item in our Christmas basket was Brussels sprouts. They are at a premium as many have been rotting in their fields (much to the joy of children) due to an unusually wet October. This year we can enjoy a cut price feast, but that does not mean we will avoid a nasty bout of inflationary indigestion in 2016.

 David Hooker – Insight Investment, a BNY Mellon company

This year it is not just Grinches that can go on a Christmas shopping spree without having to part with too much of their hard earned cash. Thanks to the supermarket price wars the feast, pudding and roast beast, is getting cheaper. The best value high street purveyors of turkey, spuds and brandy butter are offering their wares at double-digit … read more

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Santa’s little helpers shun shops for sofa

Retailers without a significant online offering have faced an uphill struggle so far this festive season. The two key trends visible this year in both the US and UK have been the fact that promotions are spread over a longer period than last year, and the switch to online shopping is even more pronounced.  Stores were relatively quiet on ‘Black Friday’, now deemed to be the start of the sales on both sides of the pond, while cyber traffic was up. More shoppers are increasingly choosing to shop on mobile phones too, which adds yet another dimension for retailers to consider. Alongside the consumer’s ongoing search for value, the growth of online shopping is a trend we believe will continue to grow in influence and one we think will further highlight the divergence in the sector. Online sales growth is typically less profitable for bricks and mortar retailers as it adds variable cost without diluting fixed costs. These factors underline our cautious and selective stance on the retail sector globally.

Rosie Bichard – Newton, a BNY Mellon company

Retailers without a significant online offering have faced an uphill struggle so far this festive season. The two key trends visible this year in both the US and UK have been the fact that promotions are spread over a longer period than last year, and the switch to online shopping is even more pronounced.  Stores were relatively quiet on ‘Black … read more

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Christmas Quiz: win one of five mini remote control helicopters

To enter, please answer the above questions and submit via email to Marketeye@bnymellon.com before midnight Wednesday 16th December 2015. The full terms and conditions of the competition can be found here and the competition is only open to FCA registered financial professionals resident in the UK. When entering please confirm that you accept the terms and conditions.

Valid entries must include the following:

  • Full name
  • Email address
  • I, [Full name], confirm I have read, understood and accepted the terms and conditions and agree to be bound by them.
  • Answers to all ten questions

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Your personal details will be held by the Promoter (as defined in terms and conditions) and used for the purposes of the Competition only (as defined in terms and conditions). By entering the Competition you consent to your personal details being used for these purposes.

 

To enter, please answer the above questions and submit via email to Marketeye@bnymellon.com before midnight Wednesday 16th December 2015. The full terms and conditions of the competition can be found here and the competition is only open to FCA registered financial professionals resident in the UK. When entering please confirm that you accept the terms and conditions. Valid entries must … read more

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How will commodity prices sway developed market growth in 2016?

More than a year on from the collapse in commodity prices we can see how quickly the global growth prospects of energy exporting countries – in this Australia and Canada – have been affected. We’re not witnessing any restriction in oil and gas supply or any sustained pick-up in demand or pricing – and, given the US’s newfound status as a global non-OPEC producer, nor do we expect to see any concerted action on tackling chronic levels of oversupply. Typically with commodities you see significant overinvestment followed by swift declines in pricing due to overcapacity. It’s a cycle that can last several years to play out and we’re really only at the start.

The reality for 2016 is likely to be a divergent world with different rates of growth and hence a variety of approaches to interest-rate policy. We believe developed economies will continue to expand into 2016 although at different and, on average, moderate rates. It is certainly unlikely to be an environment in which growth picks up to a point where major central banks across the globe will drastically withdraw from their accommodative monetary policy regimes.

Vassilis Dagioglu – Mellon Capital, a BNY Mellon company

More than a year on from the collapse in commodity prices we can see how quickly the global growth prospects of energy exporting countries – in this Australia and Canada – have been affected. We’re not witnessing any restriction in oil and gas supply or any sustained pick-up in demand or pricing – and, given the US’s newfound status as … read more

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