Langton Capital – 2016-09-26 – Drinking trends, role of alcohol, Marriott & other:
Drinking trends, role of alcohol, Marriott & other:
A DAY IN THE LIFE:
Well the Mighty Hull City managed to score a goal against Liverpool on Saturday – and that with only 10 men. However, that’s maybe enough said about that match.
Anyway, I could have waxed on this morning but, as my computer told me at stupid o’clock that it was ‘configuring updates’ and ‘this could take some time’, I’m running somewhat behind.
That’s 20 minutes of my life I’ll never get back. On to the news:
PUB, RESTAURANT & DRINKS PRODUCERS:
• The BBPA has reported that alcohol consumption in the UK remained stable last year but is still 18% below its 2004 peak
• BBPA handbook shows alcohol consumption across the EU is also ‘broadly flat’. Estonia, Luxembourg and the Czech Republic consume the most alcohol per head of population.
• BBPA says UK beer consumption is below the EU average, of around 72 litres per head, per year.
• BBPA points out UK beer duty is ‘54% higher than it was in 2000, despite recent cuts to the duty rate.’ It says ‘much more work needs to be done to cut beer duty in the UK, with the UK rate still a staggering 14 times that of Germany.’
• BBPA points out the number of breweries in the UK rose by 1,380 between 2000 and 2015. Cask ale +8.2%. BBPA CEO Brigid Simmonds comments ‘many of the figures detailed in our updated Stats Handbook are encouraging for our industry, but the UK’s high duty rate on beer is still a cause for concern. We will continue to work with the Government to bring our rate more in line with other European nations and help better support our industry.’ She concludes ‘our new Handbook again underlines that with the right policies for the beer and pub sector, there is huge scope for us to help grow the economy, creating new jobs and careers, with great venues and beers.’
• Delancey is suing the UK division of China’s largest property developer, Greenland Group, over claims that is has reneged on an agreement as part of a deal in London. The action is centred around a disputed final payment of £3.7m in the state-owned Chinese group’s £135.7m purchase of the Ram Brewery site in Wandsworth two years ago.
• Annual admissions to nightclubs in the UK has tumbled by nearly a quarter in the last five years as customers turn away from high admissions and drinks prices. Mintel research shows that overcrowding is also another key issue for would-be clubbers and revenue has declined by 21% since 2010 to £1.18bn as a result. This figure is expected to drop by another 16% over the next four years to £982m.
• Former UK government official Prof. David Nutt has suggested that a synthetic alcohol, which cuts the risk of a hangover, could replace fermented and distilled alcohol by 2050. That’s a long way in the future.
• A report from Demos has suggested that over 40% of young people believe that a drink after work helps them to fit in. Demos says, however, that ‘tackling excessive drinking cultures where they exist head-on, as well as encouraging more responsible norms and precedents at different life stages, is vital to building a more responsible drinking culture.’
• Morrison’s is launching a 10% student discount off beers this month, presumably to target freshers’ week.
• Loungers has appointed CGA Altium to look into a potential sale of the business, which is on track to have 100 sites by spring 2017.
• The news that Wetherspoons will not be serving its traditional dinner of turkey and trimmings over the Christmas period has sparked social media ‘outrage’. Speaking to The Daily Mail, a spokesperson for the pub group said it will instead be offering a range of festive meals including turkey pie, yuletide beef burger, and vegetarian Wellington.
• Deliveroo is aiming to have 20 sites operating in London under its off-site delivery kitchen initiative RooBox by the end of the year, writes MCA.
• Thwaites is bringing subsidiaries Shire Hotels & Spas and Inns of Character under the Thwaites brand to ‘reflect its changing business better’. The group pointed out that brewing and running pubs now only account for about half of its business.
• Rick Bailey, Chief Executive Officer, commented: ‘It’s the ideal way for us to bring clarity and simplicity. Our customers won’t notice any difference when they visit our hotels, inns or lodges as we are not changing the guest experience or our products. However, we are creating a stronger platform to sell our services… We now have a growing collection of pubs, inns, hotels and spas and we think that our continuing success is as a result of staying true to his principles.’
LEISURE TRAVEL & HOTELS:
• The Telegraph’s Questor column has suggested that Thomas Cook is a hold ahead of its FY trading update tomorrow. It points to terrorism as a visible negative but says ‘Thomas Cook has sought to improve its offer elsewhere.’ Here the paper highlights its JV with Fosun. Costs are being cut.
• German hotel group Pentahotels has secured its first site in London and recently opened its sixth UK site in Ipswich.
• Vertical Group’s homeworking agency Your Holiday Booking is to open a collection of pop-up travel shops in Tesco stores following successful trials. The shops will be backed by Efteling, Funway and Jet2holiday.
• Marriott International believes it can realise $250m of annual cost savings through its $13bn merger with Starwood Hotels & Resorts. The resulting company, which is now the world’s largest hotel groups with more than 5,700 properties and 1.1 million rooms, has promised to retain its 30 brands across 110 countries and link their respective loyalty programmes.
• EasyJet says last Friday was most likely the budget airline’s busiest day of the year, with more than 147,000 passengers flying to or from UK airports.
• Airbnb has raised $555m in new funding, taking its total outside funding to $4bn so far and making for a valuation of some $30bn. The money will reportedly be used as insurance in case of new capital requirements.
• The UK’s highest property court has ruled that thousands of apartment owners who rent out their homes on sites such as Airbnb are likely to be breaking the law. The leasehold ruling was made after a Slovakian interior designer and property developer fell out with neighbours at a riverside housing development in Enfield, north London, according to The Times.
• Google is working on a new package holiday product that will help users aggregate their options into one place, per Travolution.
• The Business Advisory Group, which met with ex-PM David Cameron on a quarterly basis and included the bosses of EasyJet and Whitbread, has been disbanded.
• A number of tech giants including reportedly Google are said to be lining up to buy social media site Twitter. The latter’s shares rose by c20% on takeover talk.
FINANCE & MARKETS:
• CEO of Blackrock Laurence Fink has warned that markets could fall by 15% unless politicians provide a boost to GDP growth. He says ‘in many countries, we have this divide. Brexit was voted for by only 52% of the country, and the polls here [in the US] are divided. Countries across the board are very emotional right now, I have never seen this level of emotion.’
• Civitas has pointed out that the EU has more to lose if trade talks stall than does the UK. This because the UK runs a chronic trade deficit with the rest of Europe.
• Times quotes former Chancellor George Osborne as warning PM Theresa May not to trigger Art 50 until late next year
• World markets: UK & Europe down on Friday. US also lower and Far East mostly down in Monday trade
• Oil trading around $46.25 per barrel
• Eurozone manufacturing PMI rose in September to 52.6 from 51.7 a month earlier. Markets had been looking for a fall
YESTERDAY IN A NUTSHELL – SELECTION OF TWEETS, LIVE TWEETS ON WEBSITE:
• Current trading. Do we have the ‘wrong kind’ of inflation? Wages rising but no way of passing costs on? See full email www.langtoncapital.co.uk
• Ed’s Easy Diner is looking for new financing with the help of KPMG after efforts to put in place a mezz. package fell through
• Red Hot World Buffet slid into administration costing Risk Capital around £10m writes Propel.
• PwC reports that regional hotels in the UK could see record growth in 2017 but it says London properties will continue to struggle.
• PwC reports occupancy in London could fall by 0.8% to a 5yr low of 80% as demand fails to keep pace with increased supply
• Marriott boss Arne Sorenson has said that the ‘rise of nationalism and parochialism’ could be a threat to international hotels
• Summer holiday to-date bookings are up 4% year-on-year, winter up 14% y-o-y in August, according to figures from GfK
• Tui has reportedly asked Citigroup to start the sale of specialist holiday arm Travelopia in a deal that could be worth €600m
• Bank of England says ‘the United Kingdom faces a challenging period of uncertainty and adjustment.’
• Other tweets: Don’t want to be a commodities bore but have you seen some of these 12mth moves? OJ +91%, Sugar +64%. Both in dollars so worse in Sterling
• Commodities bore bores on. Wheat down 21%, feeder cattle -22%, hogs down 26%. Bacon sandwich anyone?
• Whitbread shares weaker yesterday (and today) perhaps on concerns London hotel market due for another bad year, Costa maxing out?
• Flatter yield curves spur search for yield as current generation steals the future. Could be a transition problem when rates finally rise?!
• BDO Retail Sales Tracker has fashion down 8.4% LfL in week to 18 Sept. Is down to weather but more worryingly, online sales down 1%
• Retail Week highlights ‘race for space’. That’s what happens when money is free. When it’s not, it might be tumbleweedsville Arizona…
• White elephant construction kit. No1 access free money, no2 splurge it on increased capacity, no3 blame all & sundry when demand falls
• Thomas Cook updates Tuesday, GfK says bookings for summer OK, others a little more nervous. China link up good news longer term
RETAIL NEWS WITH NICK BUBB:
• Grocer Watch: The widely followed Grocer “33” weekly supermarket pricing survey in Saturday’s Grocer magazine saw Sainsbury claim a rare but timely win, ahead of next week’s Q2 trading update, as the latest Asda price cuts again failed to make much impact. The Sainsbury basket of £61.65 was 50p cheaper than Asda and Asda’s failure to be 10% cheaper than its rivals forced it to dole out a sizeable £3.10 price guarantee voucher. Morrison’s was 3rd, with a basket costing £2.96 more than Sainsbury and Tesco was well off the pace, on £66.34. Poor old Waitrose was over £10 more expensive than Sainsbury, with a basket costing £72.16. There was more good news for Sainsbury in the separate Grocer “Mystery Shopper” weekly survey on Store Service and Availability, as their hypermarket at Longwater in Norwich topped the rankings, with a decent score of 83 out
• Saturday Press: The main focus in the Saturday papers was on the demise of Dave Forsey as CEO of Sports Direct and our comment that he had been “a human shield” for Mike Ashley was picked up by both the Guardian and the Business editorial in the Times. The latter also suggested that Dave Forsey could soon be back as a consultant and the Times separately profiled the tough Karen Byers, “the real brains” behind the Sports Direct operation. The Daily Mail played up Dave Forsey’s appearance with his wife on the reality TV show “The Real Housewives of Cheshire” as the reason for his recent falling out with Mike Ashley, although he had already been made to be “the fall guy” for Sports Direct’s troubles. The City Editor of the Daily Mail penned a sympathetic piece about Mike Ashley, opining that if he sorts out the corporate governance issues
• Sunday Press: The Sports Direct management situation continued to be a focus in the Sunday papers, with the Sunday Times reporting one investor as saying that the embattled Dave Forsey had been close to having “a nervous breakdown” and noting that many analysts were scratching their heads over the 5% rise in the share price on Friday, whilst the Mail on Sunday flagged the industry concern over the “growing void” at the top of Sports Direct now that the over-stretched Mike Ashley is in charge of everything…The Observer joked that the much-criticised employment agency Transline could help recruit some new management for Sports Direct and it also had a separate article about the success of the campaign against Sports Direct by the Unite union. The Sunday Times also revealed that Sports Direct’s head of property, Allawee Albaghdadi, left the group in July
• News Flow This Week: As September draws to a close, Aldi UK have announced their 2015 results today, whilst tomorrow brings us the interims from mighty Boohoo, as well as Card Factory, plus the MySale finals and the monthly CBI Distributive Trades survey. On Wednesday, we get the Sainsbury Q2 update, as well as the Moss Bros interims. Then the GFK Consumer Confidence survey for September is out first thing on Friday.