RTIs, inflation, services, DPEU, Pernod, cruises & more:

A DAY IN THE LIFE:

It’s interesting how speech evolves.

I mean take the words ‘full’ and ‘less’ when they are used as suffixes.

Sometimes they are opposites (or near opposites) as in useless and useful or helpless and helpful.

But at other times they create totally different words, such as pitiful and pitiless.

And sometimes only one is present. Sometimes it’s ‘full’ that can be used – as in spiteful or vengeful or hateful – and at other times it’s the suffix ‘less’ – as in spineless or gutless.

And on occasion neither can be used.

We don’t use the words angerful or angerless and nor to we have a hungerful or hungerless (although, the way that Word didn’t underline hungerful makes me wonder whether I haven’t missed something there).

And other words seem contrived, such as thirstful. You know, words that you could imagine hearing from a Game of Thrones character but not down the pub but, anyway, we’re coming to the end of a long and geopolitically eventful week.

And, guess what? It’s getting light in the morning. At least it is down south. It’ll still be dark when I fall out of bed up north next week, at least until 21 March when it should swing around the other way. On to the news:

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INFLATION & HOW TO PASS IT ON…

• This is Part II of our comment on inflation. It went out to clients yesterday. See premium. Reply to this email to upgrade.

PUBS & RESTAURANTS:

Inflation & cost increases:

Commenting on inflation & interest rates, the BCC says ‘rising raw material costs, the increase in the energy price cap, the reversal of the hospitality VAT cut and upward pressure on energy and commodity prices from the impact of Russia’s invasion of Ukraine are expected to  lift  CPI inflation to a peak of  8% in Q2  2022. If realised this would be the highest rate since  July 1991.’

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Service sector growth:

Whilst backward looking, the Markit PMI is about the best measure we have as a macro-indicator of service sector growth. The numbers that came out yesterday cover February, which seems like a long time ago. The flash numbers for March will be out in the middle of the month. Markit says ‘growth in the UK service sector accelerated sharply in February as the Omicron wave of the COVID-19 pandemic subsided.’

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The British Chambers of Commerce also comments on consumer spending saying ‘consumer spending is forecast to grow at 4.4% in 2022, down from its previous forecast of 6.9%.’

Pavement licenses. UK Hospitality has said that it ‘believes making pavement licences permanent will help the Covid-ravaged hospitality sector make a faster post-pandemic recovery.’

Leisure property transactions. Fleurets has said that demand for leisure properties is now exceeding supply.

The BBPA reports that hospitality businesses are reporting increases of 150%+ on pre-pandemic energy bills, with an average above 100%, equivalent to an £800m additional cost to the sector. Cost increases on this scale risk wiping out already narrow margins publicans receive and could have a knock-on effect on pricing.

Analysts say Russian vodka is bearing the  brunt of boycotts following the Russian invasion of Ukraine.  The US government put sanctions on state-run liquor stores to stop selling Russian-made vodka, and many private establishments then began doing the same.

COMPANY & OTHER NEWS:

DP Eurasia has updated further as to ‘how the situation in Ukraine could affect its Russian operations.’ It says ‘at this stage, due to the pace of the evolving geopolitical crisis, it is still too early to quantify any possible ramifications for the Group’s Russian business or on its full year 2022 results.’

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Pernod Ricard will acquire a majority stake in Château Sainte Marguerite, with the transaction due to be completed in the coming months. The move comes as the drinks giant looks to focus on growing its premium wine division.

Korean hot dog chain, Myungrang Hot Dog, is set to open its first European site in London in a 2,172 sq ft site within Islington’s Angel Central. Launched in Korea in 2016 by Sangwoo Kim, the chain has opened 730 stores internationally.

Steve Trowbridge has been appointed as RedCat Pub Company’s new CFO, replacing Sharon Badelek. Trowbridge was CFO at AIM-listed Arena Events Group plc and has both private equity and public company experience.

Drinks Business reports that Nirvana, a low-alcohol brewery, saw 2021 exports increase by 550% as global demand for no and low products intensified. Nirvana Brewery projects 100% growth in 2022. The UK NoLo drinks sector is now worth an estimated £143 million, according to research firm Kantar.

LDC has made a minority investment in Shaken Udder, an Essex-based milkshake brand.

LEISURE TRAVEL & HOTELS:

A poll by Holiday Extras has found that only 12% of respondents knew that most travel restrictions had been cut. Some 26% said they didn’t know what the rules were, 25% thought the pre-departure tests were still needed and 10% thought the red list was still in use.

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Princess Cruises has become the latest major cruise line to stop calls into St Petersburg this summer.

Sky News reports that Australian bank Macquarie is set to buy Roadchef, the motorway services provider, from Antin Infrastructure Partners for around £900m. Sky says ‘the transaction will be one of the largest in the sector for years and will underline investors’ appetite to buy such businesses at a time when motorway services areas are attempting to exploit the accelerating transition to electric vehicles.’

ForwardKeys data shows that Russia’s invasion of Ukraine triggered a massive number of flight cancellations to Russia. Cancellations outweighed bookings from Germany by 773%, France 472%, India 285%, the UK 254% and Italy 152%.

The Russian outbound travel market also collapsed along with domestic flight bookings. Cyprus saw the highest cancellation rate by prospective Russian visitors in the first three days of the invasion, followed by Egypt.

Canadian carrier WestJet is to take over rival Sunwing Airlines and its tour operating arm Sunwing Vacations, with the deal set to complete by the end of the year. Sunwing’s current shareholders will become equity holders in the WestJet Group.

STR reports that US hotels saw room rates in the week to 26 Feb up by 13.1% on the same week in 2019. Revenue per available room was up 7.7%.

OTHER LEISURE:

Netflix will acquire Finland’s Next Games, a developer of mobile games, for a total value of €65m.

Fitbit is recalling 1.7m of its Ionic smartwatches after reports of the battery overheating and burning some users. The company, which was acquired by Google in 2021, had sold about 1m of the model in the US and nearly 700,000 internationally.

Entain has said it will repay £44m in furlough cash.

FINANCE & MARKETS:

Markit reported its composite PMI for the UK economy yesterday saying that it rose ‘sharply to 59.9 in February from 54.2 in January.’

Markit comments on inflation saying that ‘inflationary pressures remained acute, however, with both input costs and output charges increasing at sharper rates than in January. In fact, selling prices rose at the steepest pace in the series history, mainly due to a record increase in the service sector.’

The BCC has cut its estimate for UK GDP this year to 3.6% from 4.2%.

Re UK exports, the BCC says they ‘are  forecast to remain 13.7%  (£25.5 billion)  lower than their pre-pandemic level by the end of the forecast period  in Q4 2024. This reflects the impact of post-Brexit trade friction and a weakening global outlook on demand for UK goods and services.’

The World Bank has told the BBC that the Ukraine invasion will cut global economic growth. Both Ukraine and Russia are major food producers and disruption to supplies could increase global problems with inflation.

Sterling mixed at $1.3336 and €1.209. Oil price lower at $111. UK 10yr gilt yield up 6bps at 1,32%. World markets lower yesterday and London set to open maybe 54pts lower on continued Ukraine fears.

RETAIL WITH NICK BUBB:

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