Inflation ‘may be easing more quickly than first thought’: Inflation may be easing more quickly than first thought, the Office for National Statistics (ONS) has found. New calculations show that the core inflation rate fell to 6.8% in July from 6.9% in June and from a peak of 7.3% in May. The new modelling indicates that underlying price pressures are easing, raising the chances of the prime minister delivering on his promise to halve the headline rate of inflation to about 5% by the end of the year, reports The Times. Last week, the ONS said that core consumer prices inflation had held steady at 6.9% in July, surprising analysts and the Bank of England. Headline inflation fell sharply to 6.8% from 7.9%. James Smith, an economist at ING, the Dutch bank, said the latest analysis was “tentatively good news”, while Yael Selfin, chief economist at KPMG UK, said that while the “new measure is pointing at a small ease in inflation, we are still some way from reaching the Bank’s 2% target”. Core inflation in Europe was unchanged in July at 5.5%, while in the US it fell to 4.7%. Restaurant prices over the past decade were the best rule of thumb for the general inflation rate of the British economy, the ONS said, mainly because they were highly responsive to energy, rent and wage bills. The ONS reported last week that restaurant prices jumped by about 9% in the year to July 2023, down from 9.1% in June and a peak of 11.4% in February. The Bank’s rate setting monetary policy committee has emphasised that it needs to see services inflation fall before pausing interest rate rises. This rate jumped to 7.4% in July from 7.2% in June. Headline consumer prices inflation is expected to fall to about 5% by the end of the year.

Russian Domino’s franchisee set to close branches and file for bankruptcy: The franchise owner of Domino’s in Russia has signalled it will close its branches there as it announced it will place the business into bankruptcy. DP Eurasia said it would end attempts to sell the pizza chain’s shops in the country due to an “increasingly challenging environment”, reports the BBC. Many Western firms have cut ties with Russia since the invasion of Ukraine and introduction of economic sanctions. But some, including Domino’s, have faced criticism for not exiting. DP Eurasia has 171 Domino’s Pizza shops in Russia. It owns 68 of the sites, while 103 are franchised to local operators. DP Eurasia said in a London Stock Exchange announcement that it had decided its subsidiary in Russia, DP Russia, should file for bankruptcy rather than seek a buyer. “With the increasingly challenging environment, DP Russia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DP Russia as a going concern and, inevitably, the group's presence in Russia,” it said. The firm previously said it was “evaluating its presence in Russia” following sanctions being imposed. As well as owning Domino’s franchises in Russia, DP Eurasia has master franchise rights for the brand in Turkey, Russia, Azerbaijan and Georgia. The Russian economy has been targeted by a raft of sanctions since the outbreak of war in Ukraine in February 2022. Many companies that are household names decided to close their operations in the immediate aftermath of the invasion. Pressure was also mounted on big brands such as McDonald’s and Coca-Cola to act. There has also been ongoing criticism for the ones which have continued business. Unilever is one company that has defended its decision to keep operating in Russia, arguing that it is “not straightforward” as its operations would be taken over by the Russian state if it abandoned them. It has been claimed that the firm was contributing £579m to the Russian economy annually. Domino’s Pizza Inc, the American multi-national business and master franchisor, told the BBC that through its subsidiary companies, it stopped providing “any support for the Russian market in early 2022”.

Cake Box ‘on track to deliver year-on-year revenue growth’ following H2 6.8% lfl sales increase, non-executive chairman steps down: Cake Box, the specialist retailer of fresh cream cakes, has said it is “on track to deliver year-on-year revenue growth” following a 6.8% like-for-like sales increase in the second half of its financial year. The company said: “The group is on track to deliver year-on-year revenue growth, in line with market expectations. Looking further ahead, with a strong balance sheet, underpinned by a highly cash generative business model, the recent investment in professionalising the group’s functions and its baking and distribution facilities along with the strengthened sales and marketing functions, the group is well positioned to deliver shareholder value in the short- to mid-term.” It comes as the group reported franchisee store like-for-like sales increasing 6.8% for the first 17 weeks of the financial year ending 31 March 2024. This is an increase from 5.4% like-for-like sales growth for the first 11 weeks of the new financial year reported at the group’s FY23 results in June. It said: “The group has continued to maintain tight cost control and taken proactive action to minimise the inflationary impacts on its input and administrative costs. There have been some improvements in input costs to the group, with fresh cream prices decreasing in the first quarter of the year. Cake Box remains mindful of significant inflationary pressures that still exist on its franchisees and customers across the country and therefore has passed on part of this cost reduction to franchisees to help strengthen their margins. The group continues to have a strong balance sheet and had cash as at close of business on 30 July 2023 of £7.9m, prior to paying the proposed final dividend for FY23 of 5.5 pence per share, amounting to an upcoming cash outflow of £2.2m on 29 August 2023.” A new website has also gone live, with “positive feedback and encouraging early results”, as the group looks to focus on increasing its marketing strategy. It has opened a further seven new franchise stores since the beginning of the new financial year and now trades out of 212 franchise stores, as of 30 July 2023. Meanwhile, after more than five years as the non-executive chairman of Cake Box, Nilesh Sachdev has informed the board of his intention to step down in November 2023 to concentrate on his growing commitments outside of Cake Box. “The board would like to thank Nilesh for the pivotal role he has played in helping guide the company since its IPO on AIM in June 2018 and will initiate a recruitment process to appoint his successor,” the group said. Sachdev added: “Cake Box is fantastic business that has grown significantly since our IPO over five years ago. I am proud of what we have achieved, building a company that now has over 100 franchisees including a large number of female franchisees running their own businesses. We have a strong leadership team who I am confident will continue our growth in the years to come.”