Langton Capital – 2018-06-13 – Drink sales, airlines, Brexit etc
Domino’s, Poundworld, tips, delivery, bogus claims etc.:
A DAY IN THE LIFE:
Busy this morning, so on to the news:
PUB, RESTAURANT & DRINK PRODUCERS:
• YouGov has found that 11% of hospitality workers (equivalent to 333,000) are contemplating leaving the UK as a result of Brexit. The survey found that 18% of hospitality managers find recruitment harder now than a year ago.
• Alcohol consumption worldwide increased in 2017, with the cider category growing by 2.5%. Total global consumption of alcohol rose by 0.1% representing 3.5m more cases compared to last year.
• Sales of gin in the UK broke records after reaching £1.5bn in the 12 months to the end of March 2018, according to data from WSTA.
• YouGov has undertaken a survey commissioned by Planday finding that around 11% of hospitality workers are considering leaving the country post Brexit. Planday says ‘these findings show to us the depth of the potential impact of Brexit on the UK economy, with the hospitality industry being hit especially hard. There’s clearly false confidence within the hospitality sector with almost three times as many workers considering leaving as managers expect.’
• The Institute of Hospitality says ‘Brexit will present some fundamental challenges to our sector if the changes proposed around immigration are approved, given the sheer number of staff and businesses that would be affected. These results clearly show the need across the sector for forward-planning and we are encouraged to see evidence of the industry stepping up to the challenges ahead through increased training and upskilling.’
Domino’s Pizza US is pushing a carryout option for its units and is investing in making roads easier to drive on. The group is asking customers to nominate their towns as targets for pothole repair.
• The Wine & Spirit Trade Association (WSTA) warns of a potential gin shortage in a no-deal Brexit scenario. Juniper berries and other botanicals are all generally imported from the Mediterranean. The WTSA reports UK record sales of gin in the 12 months to the end of March 2018 with almost 55m bottles of gin sold worth nearly £1.5bn, up 28% in volume and 33% in value yoy.
• Ei Publican Partnerships has teamed up with Star Pubs & Bars to grow this year’s National Pub Fortnight – a two-week celebration taking place between 20 July and 5 August.
• Greggs has announced that it is testing a new delivery service with Deliveroo. The service will cost £2.50 with no minimum spend and is being trialed in seven Greggs stores.
• The high street fashion chain, New Look is looking into cutting prices, saying 80% of the clothes it sells are now under £20. The move comes after disappointing sales recorded in 2017, with LfL sales down 11.7% and website sales falling 19%.
• The Manchester-based wine producer Boutinot has reported sales up more than £7m to £136m, with significant growth in the US.
HOLIDAYS & LEISURE TRAVEL:
• Several ‘pivotal’ votes will be held in Parliament this week that could add to the uncertainty of Brexit and lead to a fresh ‘crisis later this month, commented Steve Richards (presenter of the BBC’s The Week in Westminster on Radio 4). Mr. Richards continued with: ‘Theresa May will probably present two options, EU leaders will reject both and it will be another moment of crisis. It’s difficult to predict what will happen in the next hour let alone the next few months. [But] Europe has brought down three prime ministers – Thatcher, Major and Cameron – and May will be another’.
• Merlin Entertainments has partnered with Levy Leisure to provide Madame Tussauds London with an immersive ‘foodie’ guest experience, called ‘Royal Tea’. The deal will last for three years, offering guests to opportunity to have tea alongside the life-like figure of Queen Elizabeth II.
• IHG is planning to open 30 new hotels in Mexico by 2021, increasing its capacity in the country by nearly 4,000 rooms.
• The Jubilee Line will see a 24 hour strike on Thursday due to a row over new timetable changes.
• Heathrow reports a 3.1% increase in passenger traffic in May to 6.7m passengers, with flights from North America up 5%. Domestic traffic was up 5.5% yoy with more passengers flying to Leeds, Edinburgh and Aberdeen.
FINANCE & MARKETS:
• The ONS has reported that UK wage growth weakened slightly to 2.8% in the three months to April. Inflation in April was running at 2.4%
• Unemployment numbers fell by 38k to 1.42 million. The jobless rate remained at a 43yr low of 4.2%.
• NIESR says ‘the latest Labour Market statistics from the ONS show further reductions in unemployment and an increase in employment rates to 75.6% – their highest ever level. At the same time, there were 818,000 job vacancies for March to May 2018 – 33,000 more than for a year earlier’.
• Exports of goods from Yorkshire & the Humber have risen by 8.7% for the year to end-March 2018.
o The time for vaguely worded fudges is running out.
o Mrs May thought likely to back max fac.
START THE DAY WITH A SONG:
Yesterday’s song was Foundations by Kate Nash. Today, who sang:
But it was Saturday night,
RETAIL NEWS WITH NICK BUBB:
Mulberry: On the back of today’s finals, for y/e March, the British luxury group Mulberry has made the timely announcement of the formation of a new majority owned venture to develop the business in South Korea, but it has also said that Retail LFL sales in 10 weeks to 2 June in the UK were down by as much as 9%, “due to lower footfall and fewer tourists, as more widely reported”. The new CEO Thierry Andretta says: “Although the UK market remains challenging, we will continue to invest in our strategy to develop Mulberry into a global luxury brand to deliver increased shareholder value”.
John Lewis Watch: Last week got a boost from price-matching the Debenhams Sale promotion, as well as World Cup TV demand, so yesterday’s weekly sales overview from JLP flagged that w/e June 9th saw gross sales 4.2% up (c2.5% up on a LFL basis, on our calculations). Home sales were down by 1.1% gross, but Fashion sales were up by 2.8% gross and Electricals were up by 12.1% gross. Over the last 19 weeks, John Lewis is running up cumulatively by 1.3% gross (flat LFL), which is still nothing to write home about.
Waitrose Watch: Over at Waitrose, the warm weather again failed to lift sales of picnic and barbecue fare as much as might have been expected last week, as gross sales were only 1.4% up in w/e June 9th (c0.5% up LFL). The cumulative sales picture for the last 19 weeks is +1.6% gross for Waitrose (just under 1% up LFL), which is still below par for the supermarket sector.
News Flow This Week: Just as the weather starts to take a turn for the worse…the Marks & Spencer Autumn/Winter fashion range preview is being held in London this evening. Tomorrow brings the Majestic Wine finals, the Morrisons AGM, the N Brown Q1 update and the ONS Retail Sales figures for May. And on Friday we get the Tesco Q1 update/AGM, the JD Sports EGM (on its US deal) and the H&M Q2 sales update.