BUSINESS LIVE: Metro Bank deposits dip; TRG bidder pulls out; Persimmon lifts build target

British grocery inflation has fallen below 10 per cent for the first time since July 2022, according to fresh data that will provide some relief for consumers as they enter the key Christmas shopping period.

Market researcher Kantar said annual grocery inflation was 9.7 per cent in the four weeks to 29 October, down from 11 per cent in last month’s report.

‘While the drop … is positive news and something of a watershed, consumers will still be feeling the pinch,’ Fraser McKevitt, head of retail and consumer insight at Kantar, said.

‘We’re only seeing year on year price falls in a limited number of major categories including butter, dried pasta and milk.’

Associated British Foods has forecast ‘meaningful progress’ in its new financial year, driven by a strong recovery in the margin of its Primark fashion business thanks to lower material and freight costs, and a big improvement in its sugar business.

The group, which reported profit growth of 5 per cent for 2022/23, anticipates further growth in Primark’s sales in the 2023/24 year, driven by some 1 million square feet of new retail space and ‘modest’ levels of like-for-like sales growth.

It said lower material and freight costs should result in a ‘substantial recovery’ in Primark’s gross margin and overall it expects Primark’s adjusted operating profit margin to recover strongly from the 8.2 per cent made in 2022/23.

‘At this early stage we believe that the adjusted operating profit margin will be above 10 per cent with further improvement dependent on levels of consumer demand,’ it said.

One of Unilever’s biggest backers has welcomed the shake-up at the consumer goods giant under its new boss.

Last month chief executive Hein Schumacher told investors the company would be dialling down its woke agenda to focus on the bottom line after years of under-performance.

Persimmon is set to build more homes this year than previously forecast, even as elevated mortgage costs and a prolonged cost-of-living squeeze keep buyers away.

The FTSE 250 firm now expects to build 9,500 homes in 2023, above its August forecast of 9,000 units, as it pointed to improved sales since the start of October.;

Dean Finch, chief executive, said

‘While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period.

‘The Group’s national network of outlets providing a high-quality product at a range of attractive prices is a crucial strength in this market.’

The owner of PizzaExpress Wheel Topco will not make an offer for The Restaurant Group, citing current market conditions.

‘Wheel Topco confirms that, due to market conditions, it does not intend to make an offer for TRG,’ the company said in a statement.

Metro Bank deposits shrank another 5 per cent in the third quarter, but the troubled lender told investors the increase in outflows prior to last month’s capital raise had now returned to ‘more normal ranges’.

The bank revealed a £325miliion capital raise in October and a £600million debt refinancing, after urgent talks to bolster its balance sheet.

Deposits as at 30 September stood at £15.61billion, down from £16.37billion a year earlier.