Gym Group, JD Wetherspoon, inflation, interest rates etc.:

A DAY IN THE LIFE:

Why is it that ‘ists’ are bad (racists, Fascists, sexists etc.) whilst ‘ians’ are good (humanitarian, libertarians etc.).

Of course, there might just be a few arguable exceptions; think some feminists etc.

But, overall, the bias is firmly-rooted, and it extends to jobs as well.

For example, librarians may be a warm and cuddly, bespectacled group of people who spend their spare time helping old ladies across the road whilst there may be more than the statistically average number of thieving, lying, cheating monsters who class themselves as publicists.

Hence, I might have to stop using the term parliamentarian as it’s misleading in terms of the context laid out above.

Because, except for the historic good guys such as William Wilberforce (a solid, Hull bloke) and a few well-meaning, public-spirited non-conformists etc., our parliamentists definitely have more in common with one group of the people mentioned above than they do the other.

We’re a little late this morning as we had to carry a massive telly into the office. The reason for that being pretty obvious. On to the news:

PUB, RESTAURANT & DRINK PRODUCERS:

• JD Wetherspoon has announced that it will replace champagne with sparkling wines from the UK as of July 2018. Tim Martin has stated: ‘There will be an inevitable transfer of trade post-Brexit to countries outside the EU, which will reduce prices in shops and pubs. The products we are now introducing are at lower prices than the EU products they are replacing’.

• A spokesperson for Wetherspoon has told trade journalists, the Drinks Business, that the pub co will continue to sell Prosecco, which is a much larger product in terms of sales.

• NIESR says ‘lower inflation & higher nominal wages will help lift household real income growth this year.’

• Cask Marque has reported that cask ale drinkers are more likely to support live music events, quiz nights and televised sports compared to other pub visiters. It makes a suggestion to pub-operators, saying ‘when promoting an upcoming event make sure you make it as attractive as possible to Cask drinkers; not just your regular customers but also those Cask enthusiasts who are occasional visitors.’

• Thwaites has seen LfL sales increase 2.5% in the year to 31 March, the MCA has reported. The Lancashire-based brewer and pub operator sold 17 pubs from the bottom of its estate, taking its total portfolio to 240.

• Deliveroo has announced that its new platform, Marketplace+, will enable restaurants with their own delivery fleet to plug into Deliveroo’s rider network to cope with peak demand. Chief executive and co-founder Will Shu said: ‘This is a major development for the company that will mean thousands of new restaurants delivering new orders to new customers and it’s part of our mission to become the definitive food company’.

• Franco Manca will take space in Debenhams’ flagship site on Oxford Street, further building the partnership between Fulham Shore and the department store retailer. The retailer has submitted a planning application to Westminster Council for a c3,000sq ft Franco Manca at the rear of the building. 

• RAC claims the current petrol price is too high for customers, urging retailers to pass on recent falls in the wholesale of petrol. It says petrol retailers should cut forecourt prices by 2p a litre. 

• McDonald’s is introducing two cold-brew frozen coffee drinks which will cost $2. The move sees the coffee battle between Dunkin’ Donuts and McDonald’s cover new ground.

• Barclay’s Open All Hours report has said that the hospitality industry’s access to labour is being ‘challenged by Brexit’.

• Mulberry has warned that tourists are being put off from shopping in London by high prices.

HOLIDAYS & LEISURE TRAVEL:

• TravelSupermarket reports an increase in searches for all-inclusive resorts, up 13.5% this summer yoy. The Spanish mainland, Majorca, Malta, Turkey, Bulgaria and Corfu are identified as offering families the best deals for all-inclusive holidays. The all-in option is now the favourite board type with 38% of all beach holiday price searches.

• Stansted report transatlantic passenger growth of 9.2% yoy to 2.5m in May. Primera Air’s new A321neo routes to New York, Toronto and Boston as well as Wow Air’s new Reykjavik service boosted growth.

• Julian Monaghan, the pilot who turned up to Gatwick more than four times over the aviation alcohol limit, has been sentenced to eight months imprisonment, reduced from 12 months on account of his guilty plea. Monaghan, from South Africa, had drunk a glass of wine on his flight from Cape Town to Heathrow while he was a passenger.

• Stewart Wingate, CEO of Gatwick airport, has announced a five-year capital investment plan worth £1.11bn with an aim to be able to accommodate nearly 53m annual passengers by 2023.

• STR has reported that Moscow’s hotels will see REVPAR growth of 20% to 30% over the period of the World Cup.

OTHER LEISURE:

• Gym Group has reported ‘strong trading’ and has said that it is proposing a share placing in order to buy 13 gyms from easyGym.

• Gym Group says trading for the first five months of this year ‘has continued to be strong and has met the Board’s expectations.’ It says ‘total membership is up 31.8% to 668,000 (May 2017: 507,000) and LIVE IT., our premium pricing initiative, has signed up 45,000 members in our first seven months of rollout.’

• The group ‘announces its intention to acquire 13 gyms from easyGym…for an initial cash consideration of £20.6 million, with an additional £4.1 million payable when lease extensions are agreed on two sites.’

• Gym Group acquisition to be part-funded by an equity placing to raise gross proceeds of £24 million. It says ‘the Acquisition is expected to complete on or before 20th July 2018.’

• Gym Group adds ‘six new gyms will have opened by the end of the first half increasing the total estate to 134 sites.’ It says ‘the pipeline continues to be strong for the remainder of 2018 and is building according to our expectations for 2019.’ Re the acquisition, some 11 units will be converted to The Gym brand.

• Gym Group says this acquisition should be ‘materially earnings enhancing in 2019 and beyond.’ CEO John Treharne says ‘we are pleased to have reported another strong period of growth. Our increasing membership level shows the attraction of our business model whilst the sites that we have opened in H1 2018 are trading well.’ Mr Treharne says ‘the easyGym portfolio of 13 well invested gyms is highly complementary to our existing estate. We are confident they will integrate quickly and easily into our existing business.’ He concludes ‘this acquisition accelerates our expansion plans for 2018 as we advance towards our goal of 200 gyms by 2020.’

• Comcast has put in another bid to buy bits of 21st Century Fox. It is thus going up against Disney. Both companies would take over Sky.

FINANCE & MARKETS:

• UK inflation was unchanged at 2.4% in May per the ONS. Some had thought that fuel prices would cause the number to increase.

• The NIESR comments on UK inflation saying ‘CPI inflation held steady at 2.4% in May in spite of a 5 pence rise in petrol & diesel prices.’ It says ‘inflation is now well below the recent peak of 3% in December and is likely to continue falling over the course of the year as the effects of the Brexit-induced currency deprecation fades. This will be offset to some extent by rising wages and higher unit labour costs.’

• The US Fed has raised rates by 0.25% saying that US economic growth was solid. D boss Jerome Powell said ‘the main takeaway is that the economy is doing well.’

• Sterling $1.3388 and €1.1344.

• Oil $76.49

• UK 10yr gilt yield 1.37%

• World markets: UK down, Europe mixed, US down and Far East lower in Thursday trade.

• Brexit:

o Parliamentary rebellions held off by PM May as she gives personal assurances to rebels that she knows what she is doing. A deal needs to be struck by tomorrow.

o Ex minister Phillip Lee says there is a danger that the UK will neither leave, nor stay in, the EU

o MP Anna Soubry has said that death threats are being made against certain remain MPs

o Morgan Stanley is to move 400 to 500 jobs out of the UK. The bosses of a number of large banks are to meet with No10 today to ask why they should stay in the UK

o Former UK diplomat Ivan Rogers has said that the EU is unlikely to agree to either of the trading proposals being thrashed out by the Cabinet

o Senior EU figures are reported to have said that Labour’s Brexit proposals are also unworkable. Labour wants the benefits of free trade with the EU but does not want to pay in or allow free movement

o Labour’s EU policy is being referred to as ‘cakeism’

START THE DAY WITH A SONG:

Yesterday’s song was Little Red Corvette by Prince. Today, who sang:

Never stopped me dreaming

So many jokes, so many sneers

But all those ‘oh so near’s

RETAIL NEWS WITH NICK BUBB:

Majestic Wine: Today’s finals from Majestic Wine show good progress, thanks to its Online business Naked Wines, but the comments from the estimable CEO Rowan Gormley about the UK Retail background catch the eye:  “We expect the UK market to remain tough, possibly even tougher than last year.  Certainly trading since year end has been harder than the prior year in the UK.  Despite this, we expect to hit FY19 market expectations”.

N Brown: Today’s Q1 update from the fashion group N Brown covers the 13 weeks to 2 June and it is disappointing to see that Product revenues fell by 2.8% despite the helpful weather in May. Investors may be reassured to hear CEO Angela Spindler say that “I am satisfied with our Q1 performance. At this early stage in the financial year our full year expectations are unchanged”, but landlords (and multi-channel zealots) will be dismayed to hear that N Brown is planning to close its loss-making portfolio of 20 stores, at a cost of about £20m…

Planet ONS Watch: The warm weather certainly helped to boost the recently announced BRC-KPMG Retail Sales figures for May, but we will find out at 9.30am what “seasonally adjusted” life was like last month on the High Street on that strange parallel world, the Planet ONS (aka the Office of National Statistics), via their official Retail Sales figures…City economists generally expect a 0.6% rise in month-on-month volume, for what it’s worth.

News Flow This Week: The Morrisons AGM is being held at 11am at HQ in sunny Bradford, but no statement is expected. Tomorrow brings the Tesco Q1 update/AGM, the JD Sports EGM (on its US deal) and the H&M Q2 sales update.