JDW, staffing, supply issues, confidence, Pizza Express, D&D etc.:

A DAY IN THE LIFE:

With 81 minutes gone on Saturday and the Mighty Hull City holding Middlesbrough at 0-0, there was room to hope that we would pick up another goalless point but, imagine my surprise when checking the score a little later during the wedding we were attending to find that we had won, 2-0!

And, looking around the room, which seemed to be full of people furtively checking their phones and then grinning stupidly, it was obvious that I was not the only one struggling to remember that there was a number higher than zero when looking at Hull’s goal’s scored.

So, our push for promotion has begun and, undefeated in October to date and having not conceded a goal in that month either, having propped the table up (shortly before Derby was docked points), we could still mathematically win the league and storm into the Premiership (for the 4th time) next season.

Hope, as they say, may ever be the last thing to die but, before that happens, let’s move on to the news:

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JD WETHERSPOON – FULL YEAR WEBINAR:

Following the release of its FY numbers, JD Wetherspoon hosted a webinar for analysts. The company says that it’s LfL number, down 38.4%, includes open but badly-impacted airport pubs. Food sales were down 42.2% and food was down 37.4%. Accommodation sales were down a lesser 27.1%. The company did pass on the VAT reduction to customers last July. The adoption of IFRS16 reduces profit by c£11m. There is no cash impact.

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PUBS & RESTAURANTS:

Labour shortage. CGA has commented on the staffing crisis under the title ‘hospitality leaders scramble to recruit and retain as labour shortages bite.’ It says the Q3 ‘Business Confidence Survey from CGA and Fourth reveals widespread vacancies and rising wage costs.’ It says currently around 16% of job positions are unfilled.

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Supply issues. Around half  the nation’s independent petrol stations we dry running into the weekend per the Petrol Retailers Association. The army will be helping with deliveries from today. The ONS has reported that road traffic volumes were post-freedom day lows. Minister Kit Malthouse has said that fuel shortages could last another week.

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Supply shortages due to UK being in a “period of adjustment” after Brexit and Covid says the PM. This is a) correct but b) doesn’t give much of a clue as to the continued direction of the change, its severity or the landing point for supplies.

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Reduced business confidence as the ‘directors’ Economic Confidence Index fell off a cliff in September’ per the Institute of Directors.

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Business rates. The Guardian has reported that ‘Conservative MPs in “red wall” seats have urged the chancellor to cut business rates.’ Labour policy is now to abolish the tax and overhaul the system.

Budget lobbying. Chancellor Rishi Sunak will present his budget on 27 October. The BBPA has called on him to ‘invest in pubs and brewers who have a leading role to play in the recovery.’ It says pubs ‘are a force for good for mental health and sociability, and employ a high proportion of young adults.’ The BBPA has a number of suggestions including cuts to beer duty , further rates relief and a permanently lower VAT for all food and drink sold in pubs. it never hurts to ask.

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The furlough scheme has officially ended and VAT is on its way back up but the Press has reported that chancellor Rishi Sunak is ‘drawing up plans to extend his Covid business loans scheme amid fears Britain’s economic recovery could be hamstrung by labour shortages (per the Telegraph) and a £500m figure is put on an ‘expansion of government action to tackle unemployment and support job seekers following the end of the furlough scheme’ by Sky. The chancellor will speak to the Tory Party conference today.

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Trading. S4 Labour says ‘after five consecutive weeks of positive like-for-likes, September 2021 has seen total hospitality sales increase by 8% when compared to September 2019.’ It says ‘this was driven by food like-for-likes increasing by 16%; a common pattern throughout the past two months. Drink like-for-likes were up too, however by a much smaller 1%.’

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Coffee habits. UK Coffee Week has conducted a survey & finds that 70% of UK coffee drinkers enjoy two or more cups per day with 23% saying they regularly drank three or more cups of coffee per day. Latte is most popular drink.

COMPANY & OTHER NEWS:

Pizza Express has updated on trading for the year to 5 September 2021 saying that it generated revenues of £182.5m and EBITDA of £22.2m for the period. It says it saw ‘sales outperforming the CGA Peach market tracker for every week but one since the return to unrestricted dining on 19 July 2021.’ It says it was up 3.7% against the market for the 7 weeks 19 July 2021 to 5 September 2021).

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Sky News has reported that restaurant chain D&D is close to being bought by Montecito Equity Partners. It mentions an enterprise value of c£100m.

Diageo has announced it is to invest to support growth in its tequila category. It says ‘in fiscal 21, Diageo’s tequila organic net sales grew 79% with the category now representing 8% of the company’s organic net sales. Growth was primarily driven by North America, where tequila is benefitting from its broad appeal across consumer occasions.’ It says that further ‘exciting investment in Mexico will support our future category growth to meet Mexican and international demand.’

Sky reports Oakman Inns as saying that raising VAT from 5% to 12.5% while pubs & restaurants are still recovering was ‘a risk that has probably been taken too soon.’

Propel reports that C&C Group is ‘to consider a sale of its 47% stake in Admiral Taverns, the circa 1,600-strong pub company, which recently acquired community pub company Hawthorn in a £222.3m deal.’ It says it believes that ‘no formal process has begun for the sale of C&C Group’s stake, which it acquired for £37m in September 2017, but that early discussions have taken place around a possible transaction.’

The Telegraph reports that ‘covid and Brexit are forcing Pret a Manger to reassess its reliance on an EU migrant workforce.’

Lavazza and YUM China are to push ahead with plans to open Lavazza Cafés in China. The two companies have said they will invest $200m to grow Lavazza’s premium coffee shop concept to 1,000 stores by 2025 via a joint venture.

Benugo, which operates cafes and restaurants inside public buildings, has reported full year 2020 numbers in which it shows operating losses of £10m on sales of £33.7m. The group says it felt the brunt of restrictions as it is ‘a predominantly retail focussed business.’

In the US, NRN reports that 78% of restaurant operators are now seeing a decline in customer demand for indoor dining. It says ‘this slump signals the pandemic’s impact on the restaurant industry is far from over.’

HOTELS & LEISURE TRAVEL NEWS:

The government is reported set to cut the number of countries on the UK’s red list from 54 to just nine.

Travel Weekly reports aviation leaders as saying that forecasting remains ‘impossible’ despite recent government relaxations on international travel.

Some sixteen major European airlines have said they will reimburse passengers within seven days of a cancellation. They have also said that they will convert vouchers given earlier in the pandemic into cash. EU commissioner Didier Reynders says ‘in the early phase of the pandemic, some airlines pushed vouchers on passengers. They were acting against EU consumer protection rules. That was unacceptable. Following our joint action, I am pleased that most of them have now agreed to refund these vouchers. I call on authorities to ensure that the remaining airlines also offer a money refund for such vouchers.’

Indian Hotel Chain Oyo has filed for a $1.1bn IPO. OYO is backed by SoftBank amongst other investors.

STR reports that hotel demand and occupancy is ‘ticking up’. It reports sales are closing in on 2019 numbers and adds that ‘trends indicating stronger business demand include improved performance in the U.S. top 25 markets and at group hotels in those markets.’

OTHER LEISURE:

Lounges.tv has exceeded its £950k crowdfunding target.

FINANCE & MARKETS:

The FT reports that the current supply crisis was evident months before it broke onto the front pages of the nation’s newspapers. It says that executives went to government back in June with a list of fixes, including ‘temporary visas to recruit overseas HGV drivers; action to clear the Covid-19 driving test backlog; extended driver hours; and a campaign by the government to urge retired British HGV-licence holders to get back behind the wheel.’ Better late than never as all – or nearly all of these things – have now been adopted as government policy. Government at the time said there was “a perception that the industry is crying wolf” and that the government did not want to “create panic”.

Friday’s Markit PMI manufacturing release for the UK showed a drop from 60.3 in August to 57.1 in September. This is still growth, albeit at the lowest rate since February. Markit says ‘the September PMI highlights the risk of the UK descending towards a bout of ‘stagflation’, as growth of manufacturing output and new orders eased sharply while input costs and selling prices continued to surge higher.’

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RETAIL WITH NICK BUBB:

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