The Grocer – 13 January 2018

Get the full story at thegrocer.co.uk 13 January 2018 | The Grocer | 11

“Super Thursday” proved anything but super for

the grocers this week after Tesco and Marks &

Spencer both undershot City expectations.

In fairness to Tesco, those expectations were

fairly lofty after Tuesday’s market share data

showed it significantly outpaced its big four con-

temporaries over Christmas. The supermarket’s

2.3% third quarter like-for-like growth in the UK &

Ireland and 3.4% growth in like-for-like food sales

appeared solid enough. However, ongoing weak-

ness in general merchandise and lost tobacco

sales following the collapse of Palmer & Harvey

dragged festive like-for-likes back to just 2%

growth – well under consensus estimates of 2.8%.

Tesco’s shares fell back 4.1% on Thursday

morning to 203.2p after what SocGen called a

“disappointing Christmas... despite easy comps.”

Broker Jefferies was more charitable, greeting a

“solid” update, but warned: “The key message

today is a slowing rate of UK volume gains... More

generally the margin rebuild has been relatively

modest in recent semesters in the UK.”

There were fewer signs of encouragement for

M&S, which plunged 6.3% on Thursday to 303.5p

after its trading update showed weakening sales

trends in both food and general merchandise.

Total food revenues did rise by 3.6% to £1.7bn in

the 13 weeks to 30 December, helped by new store

openings, but this represented a like-for-like sales

fall of 0.4% while total group sales for the quar-

ter slipped 0.1% to £3.2bn. Liberum commented:

“The success of the turnaround strategy remains

uncertain, with the backdrop of significant struc-

tural pressures persisting.”

Morrisons shares jumped 2.9% to 233.4p on

Tuesday after its 2.8% rise in group like-for-like

sales over the 10 weeks to 7 January were well

ahead of City expectations. Sainsbury’s rose 2.2%

on Wednesday to 253.9p after lifting its annual

profit expectations thanks to higher synergies

coming from its Argos acquisition, despite a 1.4%

slump in third-quarter general merchandise sales

dragging back its 2.3% boost to grocery sales.

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Edward Devlin
Luxury milkshake brand
Mr Sherick’s Shakes has
succumbed to cost pres-
sures and ceased trading.
Founder Andrew
Sherick, who spent 22
years as a buyer at Marks
& Spencer, 15 on the
food side, launched the
startup in 2013.
The ‘super premium’
range of Mr Sherick’s
Shakes came in five fla-
vours and retailed at the
top end of the market
(£1.99 for a 250ml bottle).
Sherick turned to the
crowd to fund growth,
raising £279k on the
Crowdcube platform in
May 2015. The fundrais-
ing valued the fledg-
ling business at about
£1m. He used the cash
to increase listings,

Mr Sherick’s Shakes

appoints liquidator

amid cost pressures

build awareness and

boost manufacturing

capabilities.

Following its launch

in Selfridges, the brand

expanded into Waitrose,

WH Smith, House of

Fraser, Booths and cater-

ing giant Compass.

It also won own-label

contracts with Aldi and

M&S, with wins with

Morrisons and Asda set

to go live in 2018.

Sales had grown

from £46k in the first

year of trading to more

than £1.2m in 2016/17.

However, the challenges

of the dairy market

squeezed margins and

put pressure on cashflow.

Mr Sherick’s appointed

Opus Restructuring

as liquidator on 13

December 2017. “All the

team at Mr Shericks Ltd

are absolutely devas-

tated the business had to

be liquidated,” Andrew

Sherick told The Grocer.

“We desperately

needed to lower our costs

and did not achieve that

with our manufactur-

ing partner. However,

we hope this is not the

end for our product and

we are looking at all

opportunities.”

Mr Sherick’s Shakes sold at

£1.99 for a 250ml bottle

Buckfast has been boosted

by sales push in England

Sales of Buckfast have hit
new heights but Brexit
has eaten into profit mar-
gins, according to the
tonic wine maker’s newly
filed financial accounts.
Annual accounts for
owner J Chandler & Co
for the year to 31 March
2017 show a 3.1% rise in
sales to £43.2m on top of
an increase of over 15%
in its previous year.
This slowdown is
partly due to sales in the
previous financial year
having been boosted by
customers stocking up
ahead of a March 2016
duty rise. But J Chandler

Buoyant sales for Buckfast but

Brexit delivers hit to margins

forecasts this overall

growth trajectory to con-

tinue in its current finan-

cial year, with director

Jonathan Sharp expect-

ing a “modest” turnover

increase in 2017/18.

However, he noted that

the bottom line would

continue to be affected by

the weakness of sterling.

Pre-tax profits for the

year rose by over 21%

to £4.3m, but this was

largely driven by almost

£1m of interest income.

Operating profits fell

3.3% to £3.4m and oper-

ating margin slipped

from 8.4% to 7.8%.

Before the 2015/

financial year, Buckfast’s

sales had been relatively

stable at £36m-£39m

before a focus on expan-

sion outside its tradi-

tional Scottish base into

England helped boost

revenues to over £40m.

TESCO & M&S SHARES

Dates: 11 January 2017 – 11 January 2018

400

350

300

◼^ M&S

(^250) ◼^ Tesco
200
150
J F M A M J J A S O N D J
2017 2018
MARGIN PRESSURE
We desperately needed to lower our costs and did not
achieve that with our manufacturing partner – Andrew
Sherick, founder, Mr Sherick’s Shakes