Down the aisle
Muted growth
Data from research group Kantar Worldpanel has shown sales at food retailers rose by a meagre 0.1 per cent to £25.4bn in the 12 weeks to 24 April compared with the same period last year. The 1.1 per cent growth reported last month seems to have been a blip due to the earlier Easter as such robust trading has not continued. Out of the big four, Sainsbury's fared the best even though sales fell marginally by 0.4 per cent, but Asda fared the worst with sales dropping 5.1 per cent to £4.07bn. As ever, the cut-price German rivals Aldi and Lidl continued to gain market share.
Predictions curbed
Euro malaise
Low oil prices and a global economic malaise seem to be overpowering the eurozone's kitchen sink approach to monetary policy. The European Commission has trimmed its growth projections for the bloc, stating inflation will only rose to 0.2 per cent this year, down from a 0.5 per cent forecast in February and a 1 per cent prediction in November. It seems markets will have to wait to see if the move by European Central Bank president Mario Draghi to push the bank's deposit rate to -0.4 per cent, offer banks cheap short-term loans and eye corporate debt purchases will work.
Protective Shell
Dividend held
Two months' financial contribution from recently acquired BG couldn't prevent an 89 per cent first-quarter decline in income at Royal Dutch Shell (RDSB). The supermajor, which maintained its quarterly dividend of 47¢ per ordinary share, also expects capital costs of just $30bn (£20.7bn) this year, 10 per cent less than it had planned while buying BG. That acquisition has also increased gearing to 26.1 per cent - more than double Shell's borrowing level this time last year, although chief executive officer Ben van Beurden said the deal will bring synergies faster and "at a lower cost than we originally set out". Shares fell 2 per cent in spite of the earnings and revenue beat. For more on Shell, listen to our special podcast.
Smoker's cough
Warnings remain
EU regulations forcing tobacco companies to dedicate 65 per cent of their brands' packaging to health warnings were upheld this week by the European Court of Justice. The judges ruled such warnings were "appropriate and necessary" to reduce smoking. A ban on menthol cigarettes was also upheld because their flavour was aimed at attracting smokers who would otherwise be put off the habit. The court's statement said the rules "protect consumers" against the risks of smoking and do "not go beyond what is necessary in order to achieve the objective pursued".
Gold rally
Sparkling form
The precious metal broke through $1,300 per troy ounce this week, marking a 15-month high for the commodity. Investment experts may disagree about whether gold has a place in a portfolio, but the fact it is up more than a fifth in the year to date suggests it might have been handy to have some exposure in recent months. Weak inflation expectations, a waning of the dollar's strength and a growing view that the US Federal Reserve will remain dovish on policy are all helping. The fact Australia cut rates this week will also have helped.
Mortgage madness
'100%' loans return
Looking back it was perhaps a sign that things had gone too far, but the 100 per cent mortgage has returned - sort of. Barclays made the headlines this week with its '100 per cent' offer, but a family member must set aside 10 per cent of the purchase price in cash for three years in return for interest, meaning it is actually more like a 90 per cent loan-to-value product. Debt specialist TwentyFour Asset Management said the parents' cash shielded the bank and that it was likely "paying less on the deposits than they are generating on the loan".
Get a round in
JDW buybacks
Discount pub chain JD Wetherspoon has said it will buy back up to £60m shares in its 2017 financial year on top of its heavy activity already this year. The group's year-to-date purchase of £37.3m of shares is its largest buyback since 2007, when it repurchased £77m-worth of shares. Like-for-like sales at the group improved in its third quarter update, but margins remain under pressure. Management cited the rise in August last year of the rate hourly staff get paid as the cause, but the introduction of the national living wage in April is unlikely to ease this pressure.
