Amazon’s audacious decision to snap up Whole Foods (more of below) tore into the share price of many UK retailers this afternoon – and on the day Tesco announced an appreciable rise in like-for-like sales too. Tesco shares cracked, down 4.58% to 171.95p while Sainsbury’s shares fell 4.15% to 251.50p.
Morrisons shares though held firm, even rising 1.29% by 4.30pm, helped by its existing Amazon relationship. The FTSE 100 ended Friday 36 points higher at 7,455.63 with Worldpay Group and DCC seeing 3.53% and 3.39% gains. There was strong support too for Mondi and St James's Place, up 3.28% and 2.78%.
As to currencies the euro was up 0.47% to 41.1195 while the pound hovered just under the 1.28 handle at $1.2792. Quite a tough week for currencies – a US Fed rate rise, more President Trump Congress drama, plus a tail-off in the ECB's QE program. With Brexit negotations starting next week, expect more GBP/USD pair volatility.
- UK FTSE 100 7,455.63 +0.60%
- Dow 21,320.86 -0.18%
- S&P 500 2,424.78 -0.32%
- Nasdaq 6,132.97 -0.53%
- Nikkei 225 19,943.26 +0.56%
- DAX 12,726.94 +0.27%
- CAC 40 5,247.20 +0.56%
- Gold 1,256.80 +0.18%
- Oil WTI 44.63 +0.40%
Olympics Committee cancels fast-food order
It’s an end to the International Olympics Committee (IOC) and McDonald sponsorship pairing. The two have pulled out of their deal a full three years ahead of the contact end-date. McDonalds will still have a presence at next year’s Pyeongchang winter Olympics, with some marketing rights though.
“As part of our global growth plan, we are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities,” McDonald’s Global Chief Marketing Officer Silvia Lagnado said. It’s thought the IOC is not anticipating a replacement immediately.
Calls to ban the relationship between sport and junk food sponsorship have been rising in recent years as obesity and diabetes numbers have risen. Olympic-themed advertising stateside will stop immediately. McDonalds has sponsored the Games since 1968.
Amazon swallows Whole Foods
It’s a big mouthful but not a problem if you’ve deep pockets: Amazon has snapped up organic specialist Whole Foods for a massive £10.7bn. The move is a sure sign of the online retail giant’s determination to enter the grocery market in a huge way.
For the natural foods player it looks an adroit move. Organic food has been picked up by most mainstream retailers and market growth is more limited compared to a decade ago.
The sell to Amazon, says Whole Foods co-founder John Mackey, is the chance “to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”
Chris Beauchamp, IG, told the BBC: "If we thought the supermarkets in the UK had trouble with the emergence of the German discounters, it is as nothing compared to the ramifications of Amazon’s expansion into grocery." Amazon’s share price was up 3.24% at $995.38 at 4pm this afternoon.
Breaking news: BA cabin crew are to strike in July for up to two weeks. The move has been backed by union Unite and runs from 1-16 July.