Reasons to be Cheerful. By Dr. Clive Black

April 27, 2021 2:53 pm
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The United Kingdom has been through the mill since early 2020, a time remember when there was relief that the country had a Government with a majority to govern after chronic paralysis and procrastination since the EU-UK referendum.

The Wuhan bug ruined Boris’ honeymoon

However, there was no real honeymoon period as Government became consumed not by Brexit but the pandemic that made its way by aeroplane from Wuhan to these shores. The death toll from Coronavirus, which now exceeds one eighth of a million Britons, is a national tragedy of such deep magnitude. The wider fall out has also been immense for the wheels of both commerce and Government.

The British Government was subsumed by the pandemic and clear deficiencies in policy making and culture within the state, including the Civil Service, became apparent; deficiencies that will be the focus of future investigation, no doubt, and on which necessary change should ensue. Whilst so, the cavalry emerged, thankfully, in the form of Kate Bingham who delivered a world class vaccination programme that has provided an avenue for recovery in more ways than one.

The pandemic shadow for the British food system

For the British food system the pandemic has been immense, driving retail as the Food & Beverage channel was considerably impeded, structurally changing online grocery retail participation and determining a major contraction of the casual dining sector. Within the food system, key workers across the piece became national heroes, unlike teaching unions and can’t do, won’t do bodies like the General Practitioners trade association too. And so hygiene, bio-security, rose up the priority list and is likely to be a key legacy for the industry at all interfaces, so likely to drive further automation.

Heroine Kate Bingham

The aforementioned vaccination programme is allowing the British food system to emerge from the crisis mentality. Commencing with the necessary return to schools, mobility levels started to rise, so reducing the amount of time many folks were spending at home and increasing demand for Food-to-Go lines (e.g., sandwiches and snacks). The re-opening of non-essential retailing and the outdoor F&B channel further raises mobility, so reducing home meal occasions too. Hence, the F&B channel is starting to crank up its engine and accompanying supply chain whilst the supermarkets face into tough pandemic elevated comparatives.

Fragility and positivity

Looking ahead, there remain considerable uncertainty and fragility around the pandemic; mutations, the vaccines’ robustness and scope for a fourth wave. Whilst this is so, the appliance of science continues, for example oral pills to combat Coronavirus, and the domestic vaccine production capacity also builds, so reducing dependence upon a nasty European Commission. Hence, new resources and learnings provide a little bit more confidence that full lockdowns can perhaps be avoided; in this respect the right to a foreign holiday versus the responsibility to protect our kin could be a live summer debating matter over a glass of Rose in the UK for sure, maybe further afield too.

“…there are grounds to look forward with strong optimism for those that have survived, lower capacity helping pricing power. The supermarkets will experience lower like-for-like sales volumes until spring 2022, but also much lower Covid operating costs…. an improved mix as we consume fewer staples and the benefit of a profitable online channel”

Surging activity

For the UK economy the mood music has brightened enormously in just a matter of weeks. From the depth of January, when chins were on the floor, April sees virtually all economic indicators improving and very strongly so. Business confidence is rising, aided by the Chancellor’s capital investment tax breaks, all sectors are seeing rising activity levels albeit from low bases, whilst the housing market is now booming. All this is starting to feed into consumer confidence and so household expenditure, noting that there is c£150-200bn of cash sitting earning nothing in bank accounts, some of which will be spent.

Strong economic growth is ahead

The Governor of the Bank of England told me this month that he now expects the UK economy to reach pre-pandemic levels of activity before Christmas 2021 if there are no more major shocks. That is an amazing expectation, suggesting exceptionally strong summer economic growth with more to come in 2022. Indeed, such are the growth expectations in the USA, where Biden has printed money like there is no tomorrow, that bond markets are flashing about rising inflation, which leads to chatter about the ending of quantitative easing and even the possibility of rising interest rates.

F&B to enjoy the summer at the top-line, supermarkets at the bottom-line

What times eh! For the food system, particularly F&B, there are grounds to look forward with strong optimism for those that have survived, lower capacity helping pricing power. The supermarkets will experience lower like-for-like sales volumes until spring 2022, but also much lower Covid operating costs (c700m for Tesco UK), an improved mix as we consume fewer staples and the benefit of a profitable online channel. The two-year sales stack for UK grocery is also notably higher than it would have been without Covid.

So, without tempting fate, let us all hope that the vaccine derived improvements lead to a more prosperous, healthier and happier summer for us all.

In managing these evolving market conditions, in Coriolis there is an agile, experienced and adaptable team to deliver operational and financial improvement.


Dr Clive Black

Senior Advisor, Coriolis Consulting


April 2021

How may Covid condition the UK food system in 2021? by Dr. Clive Black

March 4, 2021 12:19 pm
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A year ago we were being introduced to an invisible entity that supposedly emerged from a Wuhan market that has totally transformed the lives of the British, including over one hundred thousand fatalities. To have predicted the events of the past year in early March 2020 would have been the stuff of modern day fantasy.

How many times did we see the word ‘unprecedented’

However, but three weeks on from the beginning of March last year the UK would be in a national lockdown whilst in-between the supermarket shelves would be cleared out by panic buyers; rationing had to be introduced. The industry’s employees would gain key worker status, many supermarket check-out staff putting their lives on the line from a sense of duty – teaching unions may like to take note – whilst unprecedented demands would be placed upon the supply chain, not seen for the vast majority in their life times.

One year on and the UK remains in lockdown, with a road map suggesting that the key will come out and fully open the doors for people on midsummers’ day. Those keys, however, will only come off the rail if mutant variants remain suppressed and hospitalisation and fatality rates continue their current downward trend. There will no doubt be further twists and turns to this most remarkable story.

Comparatives are likely to distort 2021

And for the food system, the industry at the heart of the pandemic, what of 2021? Well, notable adjustments are likely to be evident whilst some of the developments witnessed in 2020 will be with us for good. Most evidently, from mid-March the British supermarkets face into material sales headwinds, given the spike in demand encountered last year. Thereafter, sales momentum is likely to ebb and flow to last year’s tune, with comparatives easing through the summer months and ‘eat out to help out’, before rebuilding through the autumn and winter.

In early 2020, Shore Capital Markets was forecasting that the value of the British grocery industry would grow by c2.0% in the year ahead, c1.5-2.0% in 2021. As it turns out, the UK Grocery market grew at c7.5% in 2020, about 6.5% of which was volume, nearly four times Shore’s expectations. Accordingly, for 2021 it is reasonable to anticipate a decline in value, c2.0%, with volumes weaker still, maybe 3.0-4.0% after taking into account inflation and mix; in 2022 value growth should again be positive, maybe c2.0% again.

All in all for grocery, Covid has brought elevated sales but also costs too, c£850m in the case of Tesco UK in its FY2021. So, whilst the supermarkets face into weaker sales momentum in 2021, its mix, costs and cash flow comparatives should remain very positive as the economy unlocks and people move. From a mix perspective, it is also reasonable to anticipate that the demand for staples may ease back as more Food-to-Go is consumed with students and workers once again on the move.

“In early 2020, Shore Capital Markets was forecasting that the value of the British grocery industry would grow by c2.0% in the year ahead, c1.5-2.0% in 2021. As it turns out, the UK Grocery market grew at c7.5% in 2020, about 6.5% of which was volume, nearly four times Shore’s expectations.”

The return of a smaller F&B channel?

On top of the comparatives, if the British unlocking programme comes through as planned, then demand for the beleaguered Food & Beverage (F&B) channel should correspondingly rebuild. Whilst so, that channel is expected to be 20-30% smaller than the pre-pandemic days, capacity that is likely to benefit supermarkets, whilst supporting pricing and so gross margins in the out of home market.

Quite how the F&B channel evolves remains to be seen. Quick Service Restaurant (QSR) players like McDonalds have transformed their digital capabilities through the pandemic, now emerging as a much more able click and collect operator. Many restaurants have also become takeaways in effect and it will be interesting to see how many return to their sit down roots. Sadly, the pandemic will probably account for many independent cafes, public bars and restaurants, with the Casual Dining segment a particular victim, albeit this was a segment with too much capacity and pre-existing vulnerabilities.

The importance of working from home

The new dimension to the British labour process and so its food system will be working from home. It feels like home working is here to stay, which should boost supermarkets and the online channel in particular, noting that most web based grocery shopping is store picked. Whilst the comparatives for online shopping are particularly challenging, c100% for some, an expanded market with many households still concerned about bio-security is likely to mean no going back to c7% pre-pandemic participation. A key question for the sector is will the move into online grocery profitability be competed away or are the structural gains here to stay?

What we see in the last year is evident elsewhere in British consumer markets, many years of organic change experiencing a concertina process into just one. The legacy of Covid-19 though can be expected to persist well into future years through its reshaping of lifestyles and behaviours.

What of biosecurity, sustainability and well-being? 

More enduring questions, therefore, revolve around the future shape and mix of the British food system, its channels and segments, plus whether or not biosecurity, sustainability and well-being have also gone through a metamorphosis as a result of the last year.

The shadows of Covid can be expected to be long, all of which makes the sunshine of St David’s Day and the crocuses and snow drops of 2021 all the more special.


Dr Clive Black

Senior Advisor

Coriolis Consulting


March 2021.

The year ahead…? by Dr. Clive Black

January 19, 2021 10:49 am
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If P45s were issued to forecasters for the effectiveness of their predictions, there would be few around at the start of 2021. Few, if any, were walking the wet markets of Wuhan in late 2019 to gain the inside track on what was the defining development of 2020 and perhaps the current decade.

I for one had never heard of the term Coronavirus before early 2020. And yet just ten weeks into the year the British supermarkets shelves were stripped of goods, notably loo roles, with the major chains introducing rationing. What a year in-between, quite unfathomable developments that have elevated the sales for the mainstream grocers, propelled demand for online food delivery and decimated the food systems of central business districts and travel hubs.

The scars of the Coronavirus pandemic will last well beyond 2020 for the British food system and so what should we be looking for as factors to condition the New Year?

At the start of last year the world was worried, (for a little while until bat bug from the east travelled to Europe, seemingly the first port of call was the skiing resorts of Italy), about the scope for Iran and the USA to do something foolish. Twelve months on, the crazy outgoing President of the USA decided to give the green light to smashing up his own capital rather than Tehran, ahead of his childlike departure from the White House.

It will be interesting to see what new President, Joe Biden, brings to international food systems. Will the sustainability and green agendas go up the priority list under his time in office, and what about Kamala Harris, who may be the President by the time the next election comes around in 2024? What, therefore, of US agriculture; how will Mr Biden see trade with China, the EU and the UK, bearing in mind that along with Mr Obama he suggested that the UK would be at the back of the line for a trade deal with the USA?

Such macro-machinations matter to the food system because China is one of the most influential markets on the planet, its stock piling of wheat is suspected to be the single most important factor behind the commodity’s current price elevation. What does Mr Biden think of the Sino-EU accord; will that bring him closer to Boris? And then there is US-UK trade, where food standards were the key sticking point, will there be movement on the ground on this matter; I sense not.

“…the food system has clearly become part of the nation’s infrastructure, which is likely to condition a wide spectrum of government policy on its organisation development in the future.”

Back on this side of the pond, the UK has sort of left the EU, an ‘agreement’ that has been chaotically implemented, with far too little time to digest and prepare for the new administrative arrangements. M&S shelves in Ireland and France are bare, Scottish fishermen fume and the food hauliers to Northern Ireland have Michael Gove’s condescending mush on many a dart board.

One could almost think that he waited until about two days before implementation day so that he could squirm away from any justifiable flack. In 2021 the food system of the British Isles, the UK and Ireland, never mind Continental Europe, where up to now the majority of the c40% of imported goods are sourced, needs to come up with workable ways and means, not just leaving it to the industry to sort out. At the same time, British farmers and growers, plus manufacturers need to open the dialogue with government about the future with respect to food security, optimal sourcing for the next decade taking the planet into account, including the rain forests and the high seas, as this all increasingly matters.

Trump, Brexit, and, oh yes, Coronavirus. Let us hope that we are in the darkest before the dawn territory on this terrible disease that has taken over one hundred thousand Britons, the deepest scar of all, whether they had pre-existing conditions or not. The virus sustains the aforementioned distortions to the industry and with lockdown 3.0 likely to last until the end of March, maybe Easter in April, the Food & Beverage channel must remain in hibernation and the supermarkets busy with online and offline demand.

Hopefully, the vaccination, where to be fair the British Government deserves considerable credit, will gradually release society from the constraints of Coronavirus for once and for all; although I do wonder if this will mirror the flu in needing annual jabs and so the state’s desire to develop domestic vaccination manufacturing capabilities; not trusting globalisation. It is unlikely to be the start of Q3 though before full scale lifting of restrictions will come through. So what will have changed since the pandemic started for the UK food system?

Well, the Food & Beverage channel will be a whole lot smaller with many casual dining chains downsized plus cafes, public houses and restaurants closed. The corollary of this reduced capacity can be expected to be higher prices and less promotional activity. Whilst so, working from home is likely to be the key mechanism driving the food system and so those Food & Beverage establishments in suburbs are likely to perform better than those in the aforementioned central business districts and travel hubs; if the average person works two days a week at home, that is a 40% reduction in commuting and office occupancy.

In the suburbs supermarkets and neighbourhood stores will be coming to terms with tough sales comparatives from spring 2021 (cost and cash flow comparatives are favourable), so stores with smaller baskets but maybe more visits, and so some trade will be lost to a return to the commute for some and the re-opening of the on-trade. However, the two-year sales stack for 2020 & 2021 will be stronger than we thought at the start of last year, whilst the online channel participation will have structurally moved to the right (7% to c15%), with no going back, so constraining the market access of the German discounters in the process; it took a bat bug from Wuhan to stymie the advance of Aldi.

More substantively, perhaps, the food system has clearly become part of the nation’s infrastructure, which is likely to condition a wide spectrum of government policy on its organisation development in the future; just as we saw the French prohibit the bid by Couche-Tard for Carrefour on food security grounds.

The British food system should be very proud of its work in 2020 and society should take a moment when rightly applauding and commending NHS workers to think about the butchers in major halls, the check-out workers, the lorry drivers and the like, folks that put teaching unions to shame, for their real contribution for feeding the nation and keeping it sane.

Predictions are clearly a mug’s game but so much has changed at the start of 2021 compared to 2020. One has to hope it is change that is for the better; if it is not too late, a very Happy New Year.

Dr Clive Black

Senior Policy Advisor

Coriolis Consulting


January 2021

That could just be a legacy year for food systems. By Dr. Clive Black

December 17, 2020 9:23 am
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What a year eh?


Twenty-twenty will be characterised by bio-security, a virus few, if any, apart from Dominic Cummings of course, had heard about as 2019 came to an end. What change it has brought, particularly for food systems, what legacies will emerge?

Of course, as 2020 comes to an end, another running sore, Brexit, has raised its uglier head again. Perhaps one of the silver-linings of the pandemic was that our deteriorating relations with the EU was removed from the limelight. Combined, Brexit and Coronavirus are a destructive cocktail.

Indeed, combined both have placed the spotlight of structural deficiencies of Britain, albeit ones that could be positively adjusted if we had a fit for purpose establishment.  Brexit and Coronavirus have tested the skills of state policy  makers, not that their tasks were easy or enviable, it should be said.

However, in the flawed assessment of the dangers of the virus in its early days, the comprehension not to lockdown care homes at first base, over-promising on testing, track and trace, ludicrous decision-making around education, chaos personified, not helped by can’t do, won’t do, don’t do, teaching unions.., and then Brexit; it has been a low score in the appraisal of the UK Government. The latter is a failure of statesmanship on both sides of the Channel too. Put together this is abject failure by Government ministers.

And then there is the Civil Service, which has been badly found out. It simply is an old boys and girls club that is not biased, it is just self-perpetuating. Cummings did some stupid things but he was right about the Civil Service going into the pandemic, and he is right about coming out. One of the reasons that the UK is so ill-prepared for the future, its Westminster politicians aside, is that we do not have enough appropriately educated, experienced and talented senior public servants around digital, green, mathematics and science in the highest echelons of policy making and the Civil Service.

Which brings one onto the subject of advisors and the media. It is hard not to rant when one considers these groupings. In fact they are linked as many eminent scientists seem drugged on being on the BBC and Sky News. It seems discretion is a dirty word for many SAGE members – (do these people not have to sign the Official Secrets Act?) – as they seek their fifteen minutes of fame, whilst the media has been destructive, unreasonably harranging Ministers and thinking the decent public do not disapprove. And then we have Sky’s Political Editor, who has pompously and aggressively been at the fore of this media approach, including to Cummings’, found culpable of breaking Coronavirus rules on a sixtieth party bash with her colleagues whilst we should not forget Niall Ferguson’s contribution to compliance. It is just rubbish.

Meanwhile, thousands of Briton’s who obeyed the rules missed the last moments of their passing  loved ones, did not see their parents, grandparents did not see new arrivals; the establishment has let us down practically and morally in so many ways.

“For the food system, the future will embrace considerable change, technological advances in every aspect of the industry will ensure that, but also in a world of enhanced bio-security, the next phases of sustainability, the never-ending advances in well-being plus perhaps notable scope for import substitution and a new agri-policy as the CAP fades away from these shores, the future will be one of great challenge but opportunity.”

So what of the legacies of 2020?

We will clearly know a good deal more next year as the impact of the vaccine takes hold and we observe the UK’s relationship with the EU. In the meantime, the British hospitality industry has been through hell. As many as 10% of the countries public houses have closed down, not to re-open anytime soon, and maybe up to 20% of the casual dining segment. That capacity reduction has implications for owners, employees, the supply chain and future prices.

For grocers, business rates aside (‘thank you Tesco’ I can hear every other supermarket boss saying), 2020 has been a year of elevated demand, the rise of online, lower promotions and new ways of operating around viral control. The big factor behind these changes, the virus aside, is working from home; and this is a major ongoing change for the industry. As I outlined before now, it means suburban food systems are structurally boosted but city centre and travel hub locations are decimated. The future though looks brighter for most supermarket groups.

All of which brings us to Brexit and the food system. Prior to the New Year, the port chaos at Dover and Felixstowe, does not augur well. Clearly there could be higher operating costs and, through decisions to prioritise key lines, less choice. How any tariff arrangements pan out remains to be seen, but clearly there could also be higher prices for certain goods with product sourcing adjustments as well. French wine, Irish beef and Danish ham markets could all adjust in their market presence in the UK in 2021, as could demand for home produced goods.

Coming back to the bug and Brexit, four final thoughts. First, there is a worrying sense of entitlement in a large part of the UK, where many folks and groups seem to think that a money tree genuinely exists. Second, the future of the UK is now a much more live political and policy issue. The Scots are angling for independence and the rest of the UK may just think; go, but not on your terms. Nicola Surgeon may be wise to move on quickly as and when Scotland becomes independent.

Third, the island of Ireland also starts to look potentially different. Elements of the Belfast Agreement could be tested in ways that its authors probably could not have anticipated. How ironic it is that Tony Blair’s open borders policy that adjusted the British labour market could be a key factor behind future challenges and change in Northern Ireland.

In the meantime, Northern Ireland is the focal point of the dysfunction of British and EU politicians. Its food system is subject to EU law, there is a border down the Irish Sea for imports from Great Britain and, bless them, the good people of the region’s food industry are understandably seething with the shallow rhetoric and, frankly, bull-shit of Michael Gove and others. I make this point as the Chairman to two fine food businesses in the region, Mash Direct and Morelli’s ice cream.

And lastly, after what will be a rise in constitutional questions for the Union, will be The Chancellor’s Budget in March, which must assuage the markets that the British are not reckless. Hence, a balanced Budget needs to be in the agenda which means, if we are all in this together, higher taxes; the triple lock, NIC for the self-employed, pension tax relief for higher rate earners, taxing Amazon et al and so it goes. If we do not then the pound could slide, with worrying implications for inflation and interest rates.

Similarly, whilst a balanced budget is important, I implore him and his gang to genuinely think strategically about what will make the UK more competitive for business in the next decade from a supply side perspective. There is a huge opportunity but also a necessity here and it embraces seizing what Brexit may deliver around policies that set the UK on a more entrepreneurial, greener, innovative and prosperous future; one where we can perhaps afford our public services.

One lives in hope but the car crash of a year for the British establishment leaves one in abject fear. For the food system, the future will embrace considerable change, technological advances in every aspect of the industry will ensure that, but also in a world of enhanced bio-security, the next phases of sustainability, the never-ending advances in well-being plus perhaps notable scope for import substitution and a new agri-policy as the CAP fades away from these shores, the future will be one of great challenge but opportunity. Whatever one thinks of 2020, it is momentous year with a long hang-over.

I wish you all a very Merry Christmas!


Dr Clive Black

Senior Advisor

Coriolis Consulting

December 2020

Covid Christmas – What Beckons? by Dr Clive Black

November 2, 2020 3:01 pm
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How will Christmas 2020 pan out for Britain’s food system?

A simple question that is not so easy to answer with the big day less than two months away.

What we do know is that it will probably be very different compared to recent times. First and foremost, the British food and beverage (F&B)  channel – cafes, hotels public houses and restaurants – faces an existential challenge. December is, traditionally, a very big month comprising lots of gatherings involving much eating and drinking.

If the ten o’clock closing time, the rule of six and limited bubble interaction remain in place then it could be a grim December and Shore Capital’s prediction of a 20-30% reduction in F&B capacity in the UK could prove to be too timid. As an aside, one has to have immense sympathy and empathy with the trade, its owners and employees, that policies where evidence has not been credibly presented has taken its legs away. Indeed, the steps taken by many operators have been truly magnificent and the public policy focus feels very questionable.

Such policy failure was at the heart of the good side of Andy Burnham’s work – albeit in trying to be Prime Minister without the mandate he overstretched himself – leading to huge suspicion, disrespect, distrust and one senses disobedience of the Government’s controls by the public, a public fed up with an incompetent State and civil service, a destructive and detached media and a scientific community that has become drugged on the limelight and frankly lost the dressing room.

“the public…(is)… fed up with an incompetent State and civil service, a destructive and detached media and a scientific community that has become drugged on the limelight and frankly lost the dressing room.”

Back to the food system, where F&B loses out, Retail is likely to gain. Not all Retail, however will be in the winner’s enclosure. The food systems around central business districts and travel hubs are likely to remain chronically short of footfall, including supermarkets and convenience stores in these locations. Hence, it is most likely that suburban supermarkets, neighbourhood stores and the online channel will see very strong seasonal demand year-on-year.

Indeed, with the online grocery channel nearly operating at full capacity, it may be wise to place Christmas orders as soon as possible, otherwise the only other remote option maybe click & collect, an activity that we see mushrooming and benefiting the profitability of the supermarkets.

If the rule of six is largely disrespected, and I for one think Victoria Derbyshire should not have apologised for saying she is having seven around at Christmas…, most of the country will be doing so.., then there could be some specific demand differences year-on-year; large turkeys and geese may not be as popular as roast joints around the festive table this year. With several million more people in the UK this year too due to travel restrictions, plus many students at home and low levels of eating out, it maybe wise not to wait until the last minute to procure the Christmas fayre.

Hence, for the supermarkets, elevated demand and good mix is anticipated in forthcoming weeks. Good mix because whilst many families will sadly struggle this Christmas, notably people who have lost income in the private sector – those on benefits, state pensions and working in the public sector are better off year-on-year – one senses that after a pretty miserable year fed up folks will have a blast this year.

Supermarket bosses and their supply chains will have a lot operationally to contend with in forthcoming weeks to effectively execute Christmas. And then there is the matter of Brexit’s next chapter a week later. What could possibly go wrong..? That, however, is a wholly different political shambles.

Dr Clive Black

Senior Advisor to Coriolis Consulting

November 2020