Langton Capital – 2017-01-04 – Shop prices, Xmas trading, new openings & other:
Shop prices, Xmas trading, new openings & other:A DAY IN THE LIFE: So, with the decorations coming down and with the bins due to be emptied sometime this week, Christmas 2016 is now firmly in the past and we’ve got January and February to look forward to. That said, and admittedly the first 2mths of the year can be grim, at least we’re back to something like normality in that there won’t be any more emergency dashes to B&Q to purchase blow-up penguins, spare Christmas lights or inflatable Santa Clauses and we might be able to open the fridge without risking an avalanche of cold turkey leftovers, random bits of chocolate and congealed custard. And at some point, I’ll be able to pad around the house in my slippers without being shot in the back of the head with a Nerf Gun, the recycling won’t be full of empty beer bottles and come to think of it the dog could do to lose a bit of weight. Welcome to January. Anyway, it’s time for the news but if you would like to come off this email list please simply hit the unsubscribe button above. Similarly, if you are getting it forwarded and would like to go on directly or if you would like to recommend it to one of your colleagues, please just hit the subscribe button and/or suggest that your colleague does too. PUB, RESTAURANT & DRINKS PRODUCERS: • MEATliquor has confirmed it will open site number 11 in London’s King’s Cross in April at 6 St. Chad’s Place, per MCA. • Oakman Inns has updated on trading saying that it ended 2016 with an ‘exceptional performance’ • Oakman reports turnover for year to end-April 2016 +52.8% at £19.3m with LfL sales +5.7%. Site EBITDA +39.5% at £3.08m • Oakman reports strong Christmas trading with LfL sales in the 4wks to 1 Jan +6.7%. Group completed purchase of Royal Foresters on 30 Dec. CEO Peter Borg Neal reports ‘we were very pleased with our performance in 2015/16. The current year is going exceptionally well and we are considerably ahead of our budget for the year. We saw some choppiness with respect to sales at the beginning of Q3 but a stellar performance over Christmas has got us back on target.’ • 14-strong Remarkable Pub Co reports ‘our lively Shoreditch pubs traded particularly well in December as did our charming ‘two streets back from the High Street pubs’ in Dalston, Bow and Stoke Newington.’ MD Elton Mouna comments ‘we are exceptionally fortunate to have 14 exceptional GMs who collectively grew Remarkable Pubs December drinks sales by 7.5% and their own food franchise sales by 4%’ • BRC says that shop prices increased by 0.2% in December with prices for the year to date down by a reduced 1.4%. Deflation, particularly on the High Street and across the nation’s grocers, has been a feature of the last 3yrs. This period of falling prices may be coming to an end. • Telegraph quotes Nielsen as saying ‘over the next six months we can expect the return of shop price inflation but as the battle for the wallet of the shopper is so intense, this will be phased in by retailers and any increases are likely to be less than other sectors of consumer spend as measured by the consumer price index.’ The BRC says ‘we expect the general trend in inflation to be upwards over 2017.’ • Quoting researchers at Imperial College, The Times has reported that diet drinks ‘should not be seen as healthier than their full-sugar counterparts’. • Samworth Brothers has bought West Cornwall Pasty Company for an undisclosed sum. West Cornwall was rescued from administration just 3yrs ago. • US commentator NPD Group has said that ‘a restaurant industry that struggled with weak sales and traffic in 2016 shouldn’t expect much improvement in 2017.’ It says it ‘expects restaurant industry traffic to remain stalled in 2017…traffic will also continue its long-term shift away from dine-in brands to quick-service restaurants.’ • US heading for a battle for share. NPD says there are ‘more restaurants than visitors.’ It adds ‘we need to keep in mind that competition is no longer just restaurant competitors. It has become a very fragmented market, and consumers have many options available to them to obtain a prepared meal.’ • Despite being bigged up in the weekend press, Next has warned on current trading. it says ‘sales performance in the fourth quarter improved on the third quarter and was better than the run rate for the full year. However, we were expecting sales in the fourth quarter to grow on the previous year, as the comparative numbers in 2015 were poor.’ It says ‘sales in the end-of-season Sale are down -7% on last year; the cost of the lower clearance rates is in the order of £3m.’ See Nick Bubb for more detail. • JDW yesterday bought back 164k shares for cancellation at a price of 886p each • Poundland is now offering products retailing for up to £30 and is following US operators such as Dollar General in expanding beyond a single price point. • China’s imported beverages continued to grow in the first 11 months of 2016, per the China Association for Imports and Export of Wine & Spirits. China imported 51.82 million litres of spirits worth about $756.53m from January to November 2016, a 0.42% increase in volume and 1.21% jump in value compared with the same period in 2015. A total of 6.19 million litres of spirits worth $110m was imported in November, marking a 77.9% increase in value year-on-year. • Public Health England has found that children in England consume roughly half of their daily sugar quota (11g) at breakfast alone. • Hostel operator Beds and Bars has reported a 5% rise in turnover to £41.9m and a 26% increase in like-for-like group EBITDA to £4.57m for the year to end March 2016, per Propel. The company stated: ‘Despite the political, economic and competitive pressures the group is well positioned to continue to grow in the next few years and is looking to expand its reach in Europe and the rest of the world.’ LEISURE TRAVEL & HOTELS: • EasyHotel CEO Guy Parsons has bought an additional 15,630 shares in the company at a price of 95p each • Cruise co All Leisure, which delisted from AIM last year, has sold its Hebridean Island Cruises brand • All Leisure has cancelled sailings with its remaining cruise brands Swan Hellenic and Voyages of Discovery. Travel Weekly reports other All Leisure brands Just You and Travelsphere ‘are now operating under the G Adventures Atol licence, suggesting they have also been sold. Neither All Leisure nor G Adventures have confirmed whether the brands have been sold, but the websites of Just You and Travelsphere confirm holidays are operating under G Adventures’ licence.’ Travel Weekly reports that All Leisure chairman Roger Allard was unavailable for comment. • Specialist cruise shore excursion supplier Tripashore ceased trading on 22 December and is now being put into liquidation after its main investor pulled funds. • Travellers to Turkey have been warned to be cautious following the terrorist attack on an Istanbul nightclub which left 39 people dead. Around 600 revellers were in the Reina nightclub celebrating the new year when a gunman attacked, with the city already on high alert and some 17,000 police officers on duty following previous attacks. OTHER LEISURE: • Some 3.2 million vinyl records were sold in 2016, up 53% on the previous year, according to the BPI. David Bowie’s Blackstar was the most popular album. FINANCE & MARKETS: • The Markit/CIPS purchasing managers’ index (PMI) for the manufacturing sector hit a two-and-a-half year high of 56.1 in December, thanks in part to the weaker pound boosting overseas orders. The sector has started 2017 on a ‘strong footing’ with the survey signalling a quarterly pace of growth of close to 1.5%, although cost pressures remain. • The UK’s EU ambassador, Sir Ivan Rogers, has resigned. Sir Ivan had been expected to play a key role in Brexit talks • Re Sir Ivan. Remainers say it leaves talks in disarray (before they have started) but Nigel Farage says he hopes many other ‘old guard’ diplomats will also leave. • Sir Ivan points to ‘ill-founded arguments & muddled thinking’ over Brexit as having prompted his resignation • Bloomberg has suggested that Paris is seeking to attract 20k London City workers in a bid to replace London in this time zone • Demographic shifts (deaths, coming of age) suggest c20bps shift to Remain per month. Will be Remain majority by about now – even if nobody actually ‘changes their mind’ • World markets: UK markets hit new highs yesterday, Europe also higher. US markets up & Far East mostly better in Weds trade • Brent down a little at around $55.85 per barrel • Sterling at $1.224. Down over last 24hrs, up in last few minutes. Down a little vs Euro at 117.6c. • US 30yr rates 2bps lower at 3.04%. UK 10yr gilts 1.31%. Was nearer 1.5% in December YESTERDAY IN A NUTSHELL – SELECTION OF TWEETS, LIVE TWEETS ON WEBSITE: • Lynx suggests ‘most operators…may now find that much of the profit margin they were forecasting from Dec sales has been eroded by lower GPs.’ • Restaurant chains including Byron and Leon are marking up the cost of items ordered through Deliveroo to cover comm. Charges • Pub industry veteran Rupert Clevely has warned that pubs will need to raise the price of their food and drinks by around 3% in 2017 • Marks & Spencer has been forced to accept wholesale price rises of up to 15% on some grocery lines, per The Times • Figures from the British Hospitality Association Travel Monitor shows that the number of leisure tourists coming to the UK fell in 2016 • Terrorist attack in Istanbul likely to raise travel concerns, Turkish market unlikely to rebound rapidly • Change Britain says UK will create nearly 400,000 new jobs if it quits the EU customs union. • FT reports economists gloomy on 2017 outlook. Says ‘growth will slow, incomes will be squeezed and investment delayed.’ • FT accepts UK growth remained resilient in aftermath of 23 June Brexit vote but says it will slow to perhaps 1.5% in 2017. • Opinions on Brexit obviously pretty polarised. The only certainty is uncertainty. • Later tweets: Stock markets power to new highs. Sterling translation benefits felt mainly in FTSE100, Otherwise, it’s a costs issue • Chinese would-be investors overseas told to trouser their money. May be marginally fewer China bids going forward • Evolution, it’s a big thing. BDO says online Xmas spending +51% after +25% last year. Contactless spend in pubs +79% last year • Snap survey of one household (ours) shows online Xmas spend spread over larger number of companies. Amazon, eat your heart out • Snap survey. Nerf guns. Xmas essential. Ten quid cheaper at Tesco vs Amazon. Inertia, complacency sending us Amazon’s way? • NXT Xmas numbers tomorrow flagged up as good. Either the numbers will be positive or the information-management gun has misfired • Today flagged take-back Tuesday re clothing. Yes, turns out those 32” waist trousers were aspirational. • Sunday Times flags up ‘toxic cocktail of rising costs and inflation’. Thanks for that, first day back at work and all… RETAIL NEWS WITH NICK BUBB:
• Next: The plethora of Christmas trading updates in January has, as usual, been kicked off by Next this morning and the update makes for disappointing reading, in line with the cautious statement expected by the well-informed Mark Kleinman on Sky News last night…After weak November/December sales, with full-price sales down by 0.4%, despite weak comps (versus hopes of a 2% rise), Next has warned that full-year profits are likely to come in close to the bottom of the range at £792m. And it expects profits to fall to between £680m and £780m in the new-year, given the challenging outlook…Cash flow will be still be strong on that basis, but Next has also said it will eschew its normal approach to share buybacks: “In the light of the exceptional levels of uncertainty in the clothing sector and with little visibility of the approach the UK government will be taking to Brexit, we have • B&M Retail: When we saw an update from B&M flash up on the screen just before Next we feared the worst, as B&M was not due to report until next week, but good news comes early and B&M clearly couldn’t wait to tell the City that it had a surprisingly strong final quarter, with LFL sales up by 7.2% in the UK in the 13 weeks to Dec 24th. That includes a 1.1% calendar timing benefit, but is after a 1.2% new store cannibalisation impact. B&M point to “strong seasonal product performance, improved in-store standards for customers and the normalisation of service levels from our two new distribution centres, compared with last year”. As a result, “management is confident that the Group will meet market expectations for Adjusted EBITDA in the financial year to March 2017”. Conf call at 10am. • News Flow This Week: If you were expecting the Topps Tiles Q4 update and the John Lewis Partnership Christmas update today, then relax, as the Topps update has been put back until next Tuesday (Jan 10th) and the JLP overview (for the 6 weeks of Christmas) is now being announced on “Super Thursday” (Jan 12th). But John Lewis and Waitrose will both publish their sales figures for the past two weeks this morning. Nothing else is scheduled this week, although the Sports Direct EGM vote on the future of the embattled Chairman Keith Hellawell is tomorrow morning. |
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