Langton Capital – 2015-12-24 – Leisure spending, minimum pricing, footfall & other:
A Day in the Life:
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Find previous emails at http://www.langtoncapital.co.uk/daily-notes/
Not sure how many readers are left at their desks but, at this stage of the year, perhaps the only thing left to say is have a great Christmas & let’s catch up again in the New Year. On to the news:
Pub, Restaurant & Drinks Producer News:
• Greene King Tracker reports Nov drop in leisure spending, says ‘pre-Christmas belt-tightening contributes to a fall in leisure spending’
• GNK Tracker: Says the average British household spent 8%, or £17, less on leisure in November than in the previous month.
• GNK Tracker: Says amount spent on drinking out fell by 15% in Nov vs Oct. Rugby World Cup was held in Oct.
• GNK Tracker: Spend on eating out and other leisure fell by 7% and 6% respectively in Nov vs Oct.
• GNK Tracker: Y-o-y spend fell 2% on eating out and 3% on drinking out whilst other leisure remained unchanged. Says ‘a year-on-year fall in leisure spending reflects changes in shopping habits in the run up to Christmas. British Retail Consortium (BRC) figures indicate that Black Friday was an online event this year, with a record 22% of November’s non-food sales made online. Accompanying heightened online activity was a fall in high street footfall of 2.7%, something likely resulting in fewer spontaneous lunches, dinners and drinks out compared to last year.
• GNK Tracker: says ‘in addition to consumers exercising some caution ahead of the festive period, industry figures have indicated that online sales represented their largest ever share of retail sales during November, helped by a concentration of online activity around Black Friday. Reflecting this, high street footfall fell in the month, something that reduced the number of spontaneous lunches, dinners and drinks out during the month.’ Arguably this should have impacted operators with a large retail-park presence such as the Restaurant Group. RTN is due to update on Q4 trading on 14 Jan.
• GNK Tracker: Says ‘with the Christmas festivities fast-approaching, Brits tightened their belts in November, reducing their spending on Drinking and Eating Out compared to last month. This was exacerbated further by a particularly busy October, when households up and down the country were going out to enjoy the closing stages of the Rugby World Cup and celebrate Halloween.’
• M&B CEO Phil Urban has purchased 18,706 shares in M&B at 318.75p. This takes his holding to 31,306 shares.
• The European Court of Justice has ruled that Scotland’s proposed minimum unit pricing of alcohol would ‘significantly restrict the market’. The Court added that the Scottish Courts are free to pursue alternative tax measures to curb alcohol abuse.
• The ALMR has welcomed the European Court ruling, commenting: ‘Measures that stall or avoid the introduction of minimum unit pricing are welcome but this is likely to be undermined should additional tax burdens be placed on pubs and bars. We have consistently said that we would like to work with both national and local authorities and we urge the Scottish Government to investigate partnership schemes and work with the sector to tackle alcohol-related harms instead.’
• The number of pubs listed as an Asset of Community Value (ACV) has doubled in the past half year to 1,200. CAMRA hopes to increase the number to 3,000 by the end of 2016.
• The Job Exodus Trends 2016 indicates that some 47% of retail workers are unhappy with pay and could look for new jobs next year.
• Brewdog has described 2015 as ‘a bad year for craft beer’ following a spate of brewery acquisitions by larger corporations.
• Inception Group has secured a second site in Covent Garden for its Bunga Bunga pizzeria concept, described as the ‘Englishman’s Italian’. Inception Group co-founder Charlie Gilkes told M&C: ‘We are looking to open 7am to midnight, offering coffee to drink in and take away in the morning. We wanted to move the concept on and think it’s something that can easily stretch across the day. It’s a great location for us and it’s actually one we looked at three years ago when we were planning the first Bunga Bunga.’
• EasyJet is offering 500,000 seats at 20% off to celebrate its 20th birthday and has cut prices to many of its most popular destinations.
• Luton-based carrier Monarch is adding new routes from Manchester to Lisbon and Birmingham to Madrid for summer 2016.
• Park Resorts will open during February half-term for the first time next year as the firm looks to invest more than £25m during 2016.
• Everton are in talks with a United States-led consortium about a potential £200m takeover.
Finance & Markets:
• UK GDP numbers revised down. Q3 estimate cut to 0.4% from prior 0.5% & Q2 performance down to 0.5% from prior 0.7%. Numbers seem to be consistent with an economy that is slowing down. It will reinforce the case perhaps that interest rates should go up later rather than sooner.
• Opec has suggested that the price of oil could recover to around $70 by 2020. It was $110 and is $37.
• Spot market oil price up at $37.70 per barrel.
• World markets: UK sharply better yesterday on commodities rally. Europe up, US up and Far East up on Thurs trade
Retail Roundup from Nick Bubb:
Today’s Press and News: The main focus today in the papers today is the Game Digital profit warning and even the FT found that worthy of comment, with Lex column thundering (in a piece headlined “Unconsolable”) that “A dividend cut may be on the cards. The prospect is enough to make any investor spend the next couple of weeks buried in “Fallout 4””.
Quote of the day: We enjoyed watching the new “Star Wars” film last night, but it’s time to move on from Han Solo quotes and, as it’s Christmas, here’s our favourite quip from the great American comedian George Burns: “Happiness is having a large, loving, caring, close-knit family in another city”. Nick Bubb – firstname.lastname@example.org
Barclaycard: Consumer spending rose 3.9% in 2015 to its highest level in 4yrs thanks to low inflation, higher employment and wage growth
Barclaycard data: Strong performance was driven by a 14.4% increase in restaurant spending and by 9.7% more being spent in pubs
UK shoppers spent £200m on spirits in the first two weeks of December, up by £7m despite overall supermarket sales falling.
The amount of people in the UK admitted to hospital for alcohol poisoning has doubled in the last six years to 148.8 per 100,000 people
Reduction in alcohol consumption inconsistent with ‘increase in hospital admissions’. Could be fewer people drinking more?
The e-cig industry has welcomed PM David Cameron’s comments on the innovation being a ‘legitimate path’ for improving the nation’s health
Blackstone-owned Motel 6 has announced that it has opened its 1,300th Motel 6 property, with the opening of a unit in Bakersfield
Amsterdam no1 for NY Eve holiday searches per Trivago. Dublin, Paris, Dubai + New York were the next four
Nike reports 20% increase in y-o-y net profits in the quarter to end-Nov. Future orders also looking good & Greater China strong.
Sportech says it ‘confirms that it has received a number of indicative proposals in respect of The Football Pools’
US economic growth estimate revised down. Q3 growth now said to be an annualised 2.0% in Q3 vs earlier 2.1% estimate
Number of homes sold in UK down sharply in Nov per HMRC. Says some 106k properties transacted vs 122k in Oct
Oil price off the bottom (but still within shouting distance of recent lows) with Brent changing hands at $36.45 per barrel
UK public deficit worse in Nov per official numbers. Suggests that, despite cuts, Chancellor Osborne may struggle to hit budget targets
GfK’s UK consumer confidence monitor rose by 1pt to plus two points for December, a shade ahead of estimates of around 1pt