Langton Capital – 2015-06-06 – Consumer confidence, Sunday trading, costs & other:
A Day in the Life:
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Langton is currently jet-lagged as much of it has been out of the country and the time difference has been a bit of a problem the last couple of weeks or so.
The Day in the Life has been somewhat sporadic and there will be no Daily Wrap this week.
Nonetheless, we’re back from Canada with our Dream Catcher charms, coyote skin bracelets & tacky little plastic copies of the CN Tower so, with luck, things will pick up a little from Monday. On to the news:
Pub, Restaurant & Drinks Producer News:
• Enterprise updates on Q3, highlights ‘encouraging trading with like-for-like net income growth continuing’
• Enterprise says the ‘implementation of [its] strategic plan [is] on track’ and says LfL income cumulative at w44 is +0.6%
• Enterprise Inns reports ‘our trading performance continues to be encouraging and in line with our expectations’. It says ‘we were particularly pleased to deliver our eighth consecutive quarter of growth in the third quarter ended 27 June 2015 with like-for-like net income increasing by 0.5% despite the comparative period benefiting from the enhanced trading of the FIFA World Cup. This performance has been achieved through a continued stabilisation of rental income and growing income from beer sales as favourable weather and improving consumer confidence have provided supportive retailing conditions for many of our publicans.’
• Enterprise strategic developments: Group says ‘the execution of our strategic plan for the business, announced on 12 May 2015, is on track. Delivery of this plan will ensure we can best serve our publicans and communities whilst providing a clear path to maximising shareholder value through the optimisation of returns from every asset within our estate.’
• The BRC-Nielsen Shop Price Index said the cost of food rose by 0.1% last month as rising bread and alcohol costs fuelled food inflation. The news, though a relief for supermarkets as they battle for market share, may be a temporary blip in the wider trend of food deflation.
• Tips policy in the limelight as Independent conducts survey to determine policy. Unions + others accuse some operators of ‘skimming’. Pizza Express, ASK, Zizzi & others take 8% of tips pool for expenses.
• Barclaycard reports 50% of UK consumers now confident re economy v 39% a year ago. Political uncertainty out of the way
• Barclaycard reports younger consumers somewhat less happy about economy than their parents’ or grandparents’ generation
• HMG to consult on loosening of Sunday trading laws. Powers may be devolved to individual cities, mayors etc. Association of Convenience Stores (ACS) criticised further loosening saying that longer opening hours will move more trade to a small number of large store chains. The ACS said ‘by pressing on with this unpopular and unnecessary measure, the government has turned its back on thousands of independent retailers, many of which will now be under threat of becoming unprofitable if changes to Sunday Trading laws are made in their area.’
• Davy’s has bought the El Vino bar business, operator of five outlets in central London
• ETM Group yesterday once again cut 50% from food bills to coincide with yesterday’s strike on the London Underground. It added that if the strike were called off, which it wasn’t, then consumers should ‘treat this as a celebratory offer instead.’
• Rye whisky is gaining popularity in the US. Volumes have grown from 88,000 9 litre cases in 2009 to 561,000 in 2014. Data compiled by the Distilled Spirits Council (Discus) also show the category’s value has grown by 700% from $15m to $106m.
• Adnams chairman Jonathan Adnams said he was looking to further expand the brewer’s retail business and online presence.
• Bridgepoint Development Capital has bought Tastecard and the Gourmet Society discount card clubs from Dutch gift card group DIDIX.
• Traditional tea sales in the UK have declined by 6% over the past five years as consumers turn to herbal and fruit teas. Figures from Mintel show that sales have fallen from £699m in 2010 to an estimated £654m in 2015, while sales of fruit and herbal teas have increased.
• Thomas Cook India has purchased Sri Lanka-based DMC Luxe Asia through its subsidiary Thomas Cook Lanka. The company will be operated by managing director Chaminda Dias as an independent entity.
• More from Thomas Cook re India: Madhavan Menon, managing director of Thomas Cook India, said the acquisition ‘offers us three-pronged benefits: establish a global destination management presence, tap viable emerging geographies and leverage synergies with our Thomas Cook India Group business lines of inbound, outbound, corporate MICE and foreign exchange.’
• VisitBritain has reported that overseas visitors to the UK spent a record £1.93bn in May 2015, up 8% on last year
• Ryanair has become the first airline to fly 10 million international passengers in a month as July carryings rose 11% to 10.1 million.
• More from Ryanair: Chief marketing officer Kenny Jacobs commented: ’This is the first time ever that any airline has carried over 10 million international customers in one calendar month. For example, we carried more customers in one month – 10.14 million in July – than Aer Lingus carried in a whole year – 9.77 million in 2014. These record customer numbers and highest ever load factors are due to our lower fares, our stronger forward bookings and the continuing success of our ‘Always Getting Better’ customer experience programme.’
• Vegas revenue growth aided MGM Resorts’ Q2 numbers but only partially offset slowdown in Macau. Net income down 11%. China revenue was down around a third to $557m with operators in Macau widening their offer to generate revenues from non-gaming sources.
• Fitbit, which produces wearable tech gizmos to monitor heartrate, calorie consumption etc., has >3x revenues in Q2
• Walt Disney shares fell more than 6% after releasing below-forecast revenue figures for the three months to 27 June. Although the entertainment firm’s third quarter sales and profits both grew it cast doubts over the future growth of subscriber numbers in its media network business, which includes ESPN and ABC.
Finance & Markets:
• World markets: UK up yesterday on mining rally, Europe up, US up but Asia mostly down in Thurs trading
• Oil price up a touch but much weaker over last couple of weeks. Now trading at around $49.70 per barrel of Brent Crude
• UK services PMI slowed slightly to 57.4 in July from 58.0 in June. Any reading over 50.0 implies growth
• Greek PM Tsipras said yesterday that Greece was close to concluding a deal with its international lenders
• Record June imports responsible for a 7.1% widening in the US trade deficit to $43.8bn. Exports fell for the 2nd month running
• The UK services sector continues to perform well. The Markit/CIPS purchasing managers’ index fell to 57.4 in July from 58.5 in June.
Retail Roundup from Nick Bubb:
Yesterday’s Press and News:
Asda Watch: As we have just seen, the Food Retailers are still having quite a tough time, given food price deflation, and whichever way you look at it Asda is doing worst of all amongst the “Big 4”, with LFL sales over 4% down. It will be interesting to see therefore, on the back of the Wal-Mart Q2 coming up on August 18th, how the formidable Asda PR machine spins yet another poor market share performance over the last 3 months when management meet with the media that day and how long the embattled CEO Andy Clarke retains the confidence of his masters in Bentonville…
Nick Bubb – firstname.lastname@example.org