Consumer (confidence & net income), WFH, state aid, BrewDog & other:

A DAY IN THE LIFE:

So, restrictions will ease further this week and, with the prospect of a lockdown fortunately receding, the likelihood of me having to shave all my hair off and dye the stubble black is similarly reduced.

The above being one of my ‘lockdown regrets’. I mean, when else am I going to get the chance and, if we could re-run 2020, not that anyone would really like to do so, it’s one of the things Langton could have and maybe should have done.

That, alongside learning a hatful of languages, clearing out the shed and the rest but, as with most regrets, it’s not worth dwelling on.

Anyway, Hull City bagged a second win in the league over the weekend. So welcome to another full, five day week. Normality is making its presence felt as we have our first dentist appointment in two years to look forward to tomorrow. Still, on to the news:

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PUBS & RESTAURANTS:

Consumer (confidence & spending power):

The GfK confidence numbers on Friday looked bad but, as GfK will always be the first to admit, they are backward looking & the direction of travel is much improved.

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A number of observers have pointed out that, although the UK jobs market could be said to be exceptionally robust, the level of pay rises, at 4.2%, are still insufficient to cover the increase in prices. As such, the consumer squeeze is on and the hospitality industry’s customers may have less money to spend on non-essentials going forward.

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Working from home:

This is a hot topic with many and varied calls from government and some parts of industry for workers to get back to the office from this Wednesday, 26 January.

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The family market:

KAM Media has commented on the hospitality market for families saying that they are ‘very good for business [and] pre-pandemic, they made up 57% of restaurants’ revenue.’ KAM says ‘there are 7 million households in UK with kids between 0-14 years old and they eat out (with kids) 2.1 times per week, spending just under £40 each time on average. This equates to £4,500 on family dining per household, per year. That’s a sizeable amount for our industry.’

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Covid restrictions in Scotland are being eased from today.

State aid.

The Telegraph reports that business secretary Kwasi Kwarteng is telling councils to speed up the distribution of emergency Covid grants worth £253m. He is reported to have ‘written to the dozen worst-offending council leaders to admonish them for their slow progress’ and to tell them to get a move on.

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The World Heart Federation (WHF) has said one glass of wine a day is not good for you in a challenge to ‘the widespread notion that drinking moderate amounts of alcohol can decrease the risk of heart disease’.

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Aldi has discontinued its deliveries on Deliveroo, instead opting to focus on its own home shopping service as consumers return to stores in greater numbers.

The Vietnam Coffee and Cocoa Association (Vicofa) wants to double  the value of Vietnam’s coffee exports to $6bn by 2030 by increasing the proportion of processed coffee it exports, including instant brands, from 10% today to at least 25% by 2030. Vicofa said ‘The Europe-Vietnam Free Trade Agreement (EVFTA) has opened up great opportunities for the domestic coffee industry. In the future, the ministry will develop its projects on exporting agricultural products to the EU, including coffee.’

Covid restrictions in Wales have been further eased. Marston’s, which has a number of properties in the Principality, will update on trading tomorrow.

COMPANY & OTHER NEWS:

A documentary made by the BBC (to be aired tonight) and highlighted in The Guardian and The Times will feature former BrewDog staff shining a light on the beer brand’s workplace culture, one that was said to be a culture of intimidation.

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The MCA reports that Peach Pubs, a 20 site gastropub company, saw LfL sales up 21% in the six months to 2 January compared to 2019. In the five weeks of Christmas and New Year, Peach was up 3.1% on 2019. Peach managing director Hamish Stoddart said ‘Of course, we do benefit from Londoners working from home in contrast to our city peers. We suffered from 23,000 cancellations, but then had walk-ins of tables of four and six which often replaced big parties. Omicron isolation amongst the team ran at 10-15%.’

Restaurant operator Corbin & King, which owns The Wolseley and The Delaunay alongside other outlets, is reported to have filed a motion in the High Court to stop its majority owner, Minor Hotels, calling in a £35 million loan. This would have forced the company into insolvency.

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Hostmore is set to open its first ‘Fridays and Go’ quick-service restaurant in Scotland, located on Reform Street, Dundee. Depending on its success, a further 30 QSR sites could open across the UK in the next three years.

Insight company HDi reports that it has ‘seen enormous growth in demand for their data insight since the beginning of the pandemic.’ It says its ‘insight comes from tracking day to day spending on over 10 million UK debit and credit cards within almost 180,000 uniquely identified hospitality venues, apps and websites.’

John Lewis has said that it will pay its staff full sick pay for Covid-related absences, even if they are not vaccinated. It believes that not to do so would be to discriminate against them.

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LEISURE TRAVEL & HOTELS:

Austria has joined Switzerland in relaxing Covid entry rules for British travellers, with double-jabbed or recovered travellers being able to enter the country with a PCR test – valid 72 hours – or proof of a booster jab received at least 120 days after the second shot without the need to quarantine.

Dalata Hotel Group has opened its second hotel in Manchester, a £45m luxury four-star Clayton Hotel Manchester City Centre located on Portland Street. The 18-storey hotel has 329 rooms. 

Eurostar is adding one extra service in the week and two services on Fridays and Sundays to its London to Paris line. The move comes after the relaxation of restrictions by the French government for UK travellers visiting France.

STR reports that U.S. hotel occupancy was below 50% (it was 48.8%) for a second straight week last week. But it says ‘higher rates pushed hotel revenue per available room up 9% from the previous week.’

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OTHER LEISURE:

Lockdown darlings, Peleton & Netflix have both seen their share prices crumble over recent trading sessions. Whether one might last and the other prove to be more faddy is a real lift question being asked by the owners of billions of dollars’ worth of equity in both companies.

ByteDance, owner of TikTok, reports revenue up 70% YoY to $58bn in 2021. In 2020, the Beijing-based company’s total revenue grew by over 100% to $34.3bn. The slowdown in  growth comes as China tightens its regulation of big tech companies.

Moody’s reports that moves by the Government of Macao to release ‘key aspects of its proposed gaming law amendment bill’ is credit positive as it removes a degree of uncertainty. Moody’s says ‘this proposed bill will benefit rated gaming companies operating in Macao, including Las Vegas Sands Corp.’

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FINANCE & MARKETS:

The Institute of Economic Affairs says that, with inflation now at 5.4%, it is interesting to note that the money supply has increased by ‘double-digit’ percentages over the last couple of years. It says that this could be a harbinger of more rapid inflation to come.

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Sterling weaker at $1.3546 and €1.1967. Oil price up at $88.45. UK 10yr gilt yield down 5bps at 1.17%. World markets weaker on Friday with London set to open down around 17pts as at 7am.

RETAIL WITH NICK BUBB:

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