C&C to take €25m hit from system upgrade issues, David Forde to step down as CEO: C&C Group has said it has encountered “significant challenges”, in terms of time, cost and customer service, in the implementation of a complex Enterprise Resource Planning (ERP) system upgrade in its Matthew Clark and Bibendum (MCB) businesses in Great Britain, as it announced chief executive David Forde was to step down. It said that the implementation process has taken longer and been “significantly more challenging and disruptive than originally envisaged”, with a consequent material impact on service and profitability within MCB. It said that service levels had largely returned to normal levels by its pre-close trading statement of 23 March 2023, however continuing system implementation challenges, impacted by greater seasonal trading volume, saw a deterioration in service levels in April. It said that an improvement through May is being achieved by investing in material additional cost and resources, ahead of a system fix being implemented to permanently restore service to normal levels. The company said that it currently expects a one-off impact of circa €25m associated with ERP system disruption in FY2024, reflecting the cost associated with restoring service levels and lost revenue. The company said: “There is expected to be a consequential increase in working capital in FY2024, however leverage is expected to remain within the group’s stated range of 1.5x to 2.0x. Excluding the impact on MCB, C&C is currently performing in line with management expectations for FY2024 and the board is confident in the group’s medium and long-term strategy and prospects. C&C re-affirms the guidance given in its pre-close trading statement of 23 March 2023. Specifically, the group expects to report operating profit of €84m. C&C’s strong free cash flow generation, together with increased balance sheet strength will also enable a re-instatement of dividend payments to shareholders, with respect to FY2023.” The group also announced that David Forde, having navigated C&C through the challenges of the covid-19 pandemic, has informed the board that he wishes to step down as chief executive. He will cease to be a director with immediate effect but will be available to help ensure a smooth handover of responsibilities. Patrick McMahon, group chief financial officer, has been appointed group chief executive with immediate effect. Ralph Findlay, chair, has been appointed executive chair to support the management transition as McMahon will also retain his responsibilities as chief financial officer until a new chief financial officer is appointed, the process for which will commence shortly. Findlay said: “David has informed the board that he believes that now is the right time for him to step down as chief executive and to allow the business to go forward under new leadership. The board recognises and thanks David for his contribution to the group throughout a challenging period for our industry. As part of our ongoing succession planning we keep internal and external candidates for all key positions under review and we are pleased to have someone with Paddy McMahon’s skillset and knowledge of the business to step into that role.” Forde said: “It has been a privilege to lead such a great business as C&C. I am grateful to all C&C colleagues for their dedication, resilience and commitment in recent years. I wish the group all the best for the future under Ralph’s and Paddy’s strong leadership.”

Consumer confidence still on the rise: Consumer confidence in the UK has continued its steady recovery since last year’s record lows, as households have been buoyed by a stronger-than-expected economy. The Times reports that GfK’s closely watched survey of consumer sentiment rose for the fourth month in a row in May by three points to -27, extending a modest improvement since the start of the year. Consumer sentiment slumped to a record low of -49 after Russia’s full-scale invasion of Ukraine last year when energy prices and inflation spiralled. The 2,000 surveyed participants were more optimistic about all parts of their personal finances, from their outlook over the next 12 months to their ability to make major purchases. Joe Staton, client strategy director at GfK, said the survey reflected “a stronger underlying financial picture across the UK than many would think”. Staton said: “It’s good to see further improvement in how people view their personal finances in the next 12 months with a robust five-point jump to -8. This measure most keenly reflects our hopes and fears for the coming year and it underpins our ability to spend on goods and services that drive our economy.” Consumer spending has been better than most forecasters expected this year, as government subsidies to cap energy bills and strong employment growth has helped support demand across the economy. Linda Ellett, UK head of consumer markets, retail and leisure at KPMG, told the newspaper the rising cost of rents and borrowing would dictate household spending behaviour for the rest of the year. “Essential costs continue to dictate whether consumers need to take steps to save money elsewhere in their budget,” Ellett said. “For example, so far this year, a third of consumers that KPMG surveyed say they have switched to cheaper retailers. Certainty about essential costs has and will continue to dictate savings and spending plans for the rest of 2023. One third of consumers with savings that KPMG spoke to say they are using them to help meet their essential costs. But among the remaining two-thirds, appetite exists to make major purchases during the rest of this year.”

Food prices will soon overtake energy in driving UK inflation: The rising cost of food will overtake the price of energy as the driving force behind inflation over the summer, hitting poorer households the hardest, a leading thinktank has forecast. The Guardian reports grocery bills that had rocketed by almost 20% during the past year would continue to increase, replacing energy prices that were expected to begin falling over the next few months, the Resolution Foundation said. The thinktank said it was not clear that politicians were prepared for another year of food price rises or that “policy debates have caught up with the scale of what is going on”. Official figures released next Wednesday are predicted to show that the annual rate of inflation fell in April by about two percentage points from the 10.1% figure for March. Food prices usually fall in the summer as UK crops replace more expensive imports. But factory gate prices for milk, meat and other foods has accelerated, in some cases by more than 50% year on year. The Resolution Foundation’s report, Food for Thought, says food prices are expected to contribute “more to overall inflation than energy” in the months ahead. “Between March and September 2023, food prices are expected to contribute around two percentage points to inflation each month, while the contribution of energy prices is set to fall from three percentage points to less than one,” the report estimates. Lalitha Try, one of the report’s authors, said: “Everyone realises food prices are rising but it’s less clear that the scale of the increases has been understood in Westminster.” She added: “What rising food prices have in common with surging energy bills is that they pose a greater challenge to lower-income households, who spend a higher proportion of their income on food – 15%, compared with 10% for the highest-income households in 2019-20. As a result, the effective inflation rate for the poorest 10th of households was almost 50% higher compared with the richest 10th of households in March.”

Fast-food apps like Deliveroo and Uber Eats should display calories on menus: Fast food delivery apps should display calorie-counts and healthy food options to help tackle obesity, new research suggests. The Daily Mail reports that displaying healthier foods more prominently and making small portions the default option on apps like Deliveroo, Just Eat and Uber Eats slashed takeaway calories by up to 15%. Regularly used by 25 million UK adults, experts said the small tweaks to online ordering could have a significant impact on obesity. Dr Filippo Bianchi, from the Behavioural Insights Team – known as the ‘nudge unit’ – innovation agency Nesta and colleagues from the University of Oxford, carried out research involving 24,000 adults using a simulated delivery app and compared the results to a control app. One trial, involving 6,000 people, put them into groups where they were given either a small portion, a small portion that was branded as ‘regular’ and ‘extra small’ portion size option. The control group were able to order whatever they liked, with meals typically containing 1,411 calories, with those given smaller meals typically consuming 177 fewer – 12.5%. A second trial, involving more than 9,000 adults, used four interventions that repositioned foods and restaurants to make lower-calorie options more prominent on the app. They found the app with healthier food options were listed at the top of menus and lower calorie restaurants at the top of the restaurant selection page, saw in a 15% calorie reduction per order. This cut typical calorie intake from 1,382 to 1,173, typically, according to the findings published at the European Congress on Obesity in Dublin. “Our findings suggest that simple interventions could help people select lower-calorie options on delivery apps without the need to remove less healthy options,” Dr Bianchi said. “This doesn’t mean that we always have to swap pizza for a green salad – even initiatives that make it easy to make small changes to what we eat could help to slowly reduce obesity, if delivered at scale.”

Vinoteca to close Birmingham site: Wine bar, shop and restaurant concept Vinoteca will close the doors to its debut regional site in Birmingham at the end of this month, almost a year after first opening. The company said the move is in answer to difficult trading conditions during and post-pandemic, which has had a huge impact on leisure operators across the country. The challenges of a much-changed economic landscape over the past 12 months of rising costs, inflation, spiralling energy charges and regular train strikes have proved too great for a site which Vinoteca had hoped to continue to grow over the coming years. Vinoteca director Charlie Young told the Express & Star: “It is with great sadness that we have had to make the very difficult decision to close the doors at Vinoteca Birmingham and are heart-broken to be leaving the incredible Paradise development and a city we have grown to respect and admire.” Director Brett Woonton, added: “We would like to thank all our loyal staff and customers who contributed to Vinoteca Birmingham over the past year.” Vinoteca Birmingham was the only regional location for the group and the most recently opened. The remaining five locations in London are not affected and will continue to trade as normal.