GNK, Heavitree, pubs code, Starbucks, Richoux & other:

A DAY IN THE LIFE:

For those without a TV, just a note to confirm that, in a game very reminiscent of and end-of-season, nothing-to-play-for Hull City match, England’s B team was defeated by Belgium’s B team.

Football alert. There is no football today. Repeat, there is no football today.

Anyway, having had meetings all day yesterday & then a long and beer-filled meeting in the evening, it’s time to move onto the slightly abbreviated news:

PUB, RESTAURANT & DRINK PRODUCERS:

• Greene King shares yesterday fell by c9% on the back of its full year numbers. The group held its dividend & said that LfL sales in the last 8wks in its managed business were up by 2.2%.

• Brigid Simmonds, the Chief Executive of the BBPA has commented on the six pub companies that were subject to the Pubs Code waiving their right to confidentiality in Arbitration decisions, stating: ‘The decision of the pub companies to waive their rights in this respect aims to reassure the whole sector about their commitment to clarity and transparency. It is something that has been under discussion for some time, but clearly there are detailed legal hurdles that need to be overcome. The proactive agreement of the six companies to agree to this approach is an important step’.

• Heavitree has announced its H1 results, showing that revenue increased 1.4% compared to the same period last year. The group however, reported a 9.6% fall in operating profit to £631k. The group says this is ‘predominantly due to an increase in costs associated with the Group’s final salary Pension Scheme of £48,000 and a cost of £20,000 caused by the write down of old inventory items which have been moved from some of our houses over previous years and are now being held in storage.’

• Heavitree reports ‘trading has remained ahead of budget at the end of the first half of the year. The trading effect of the FIFA World Cup looks promising and, together with the prolonged period of favourable weather which our region is currently enjoying, we believe that the Company is well placed going into the second half of the year.’

• The MCA has reported that Various Eateries is to rebrand its remaining Strada restaurants. CEO Sue Walter says ‘these three restaurants are performing incredibly strongly, despite the competitive market, and this new investment demonstrates our commitment to this much loved brand.’ Ms Walter continues ‘we are adapting our spaces to meet the changing way in which people socialise. The Strada restaurants at Royal Festival Hall, More London and St. Katharine Docks enjoy some of the most beautiful and iconic views in London. We want people to experience these settings throughout the day, whether having a break over coffee, watching the sunset over evening cocktails or enjoying a taste of fresh, authentic Italian food.’

• Jamie Oliver is to open his first pizza unit in Bahrain in a partnership with SSP

• Starbucks’ shares hit a near three-year low on Thursday after it said CFO Scott Maw plans to retire later this year.

• Big Hospitality has reported that regional coffee shop operator Paddy & Scott’s , has agreed to open 40+ branded coffee shops in UK Marriott hotels.

• US PE house Carlyle is reported to be in exclusive talks to buy a majority stake in Spanish sparkling win co Codorníu

• Chipotle CEO says it could be a $10bn brand. He says a major reboot is in the offing.

• The Californian based EJ Gallo Winery have acquired the wine brand Locations.

• The Scottish Beer & Pub Association have responded to the opening of a consultation on a Scottish Deposit Return Scheme, with CEO Brigid Simmonds stating: ‘We as an industry welcome the renewed focus on reducing waste and increasing sustainability through recycling. It is incredibly important that any deposit return system is workable on a UK-wide basis, with the costs to industry and the consumer of a separate Scottish system being too impractical’.

• Sir Terence Conran’s London restaurant group has entered administration and is closing three sites.

• Experts believe the CO2 gas shortage although an industry source has warned that some pubs are worried they may have to stop serving beer on tap. Booker recently announced restrictions on the purchase of beer, cider and soft drinks at its stores.

• Rural businesses are suffering from a ‘digital dark age’ and hampered by poor mobile phone and data coverage, according to the Country Land and Business Association (CLA). Speaking to MPs, the CLA said that Ofcom must force mobile operators to make 4G connectivity available for all businesses and communities.

• China has brought to a close a 20-year-long ban on UK beef imports, which was first introduced after the 1990’s ‘mad cow disease’ outbreak. The government said the development will be worth £250m to British producers over the next five years.

• Richoux, the listed restaurant group led by Jonathon Kaye, is considering options for its five-strong Richoux brand and has appointed AG&G to assess demand for its four central London sites, per MCA. The units generate a combined turnover of around £4m, with offers of c£3m being sought for the sites in Mayfair, Piccadilly, Gloucester Road and Kinghtsbridge.

• The six companies subject to the Pubs Code (Admiral Taverns, Ei Group, Greene King, Marston’s, Punch Taverns and Star Pubs and Bars) have written to Richard Harrington MP agreeing to waive their right to confidentiality in Arbitration decisions made by the Pubs Code Adjudicator. It is hoped the decision will help provide clarity and transparency for the sector.

• Amazon’s purchase of an online chemist, creating a nationwide drug network in the US, has taken billions of dollars in value off of the three major pharmacy chains. Shareholders suffered jitters after Amazon closed a deal with PillPack, which sells prescriptions in every US state except Hawaii. Shares in Walgreens Boots Alliance – which owns Boots in the UK, and CVS Health and Rite Aid were sent tumbling on Thursday afternoon, wiping $12.8bn (£9.7bn) off their combined market value.

HOLIDAYS & LEISURE TRAVEL:

• STR’s new Hostel Destination Report shows that London hostel occupancy fell 1.4% to 80.8% during the first five months of 2018. Average daily rate (ADR) was down 9.1% to £18.87, pulling revenue per available bed (RevPAB) down some 10.4% to £15.32. The comparable period in 2017 benefitted from a ‘post-Brexit demand rush’.

• PPHE has entered into an agreement to refinance its interests in four UK hotels (Park Plaza London Park Royal, Park Plaza County Hall London, Park Plaza Leeds and Park Plaza Nottingham). Banque Hapoalim (Luxembourg) S.A. (BHI) will be providing the new £45 million facility, which will be for a term of 7 years and will bear a fixed interest rate of 4.367% per annum (the Facility).

• STR data shows US hotel occupancy increased 0.1% to 75.9% in the week to 23 June, with ADR up 2.9% to $133.28 and RevPAR up 3% to $101.12.

• Hotstats reports profit per room at hotels in the UK fell by 4.3% in May.

• Hotstats says room revenues fell by 1.2% with ancillary revenue also markedly lower. It says ‘this is only the second time since October 2016 that a decline in rate has been recorded, as the ability to leverage price has been a mainstay for UK hoteliers on the back of punchy room occupancy levels.’

• The CMA is to investigate the way in which hotel booking sites rank and display rooms. It is said to be concerned about how the rankings are influenced by factors ‘irrelevant to consumers’ – primarily how much commission the hotel is paying the listing site.

• The CMA is also likely to investigate the flashing alerts etc. that are intended by the sites to instill a sense of urgency into the bookings & suggest that rooms will be snapped up if consumers do not buy quickly. It also wants to look into any hidden charges.

OTHER LEISURE:

• UK takeover panel to look at whether Disney should make a higher offer for Sky in the wake of its bid for Fox.

FINANCE & MARKETS:

• Bank of England Chief Economist Andy Haldane has said that a rise in interest rates shortly should not be seen as ‘surprising or radical’.

• The US economy is reported to have slowed more than previously estimated in Q1

• Sterling flat vs dollar at $1.3115 but down vs Euro at €1.1253

• Oil up a little at $77.77

• UK 10yr gilt yield up 1bp at 1.26%

• World markets: UK down yesterday with Europe lower but US up. Far East up in Friday trade

• Brexit etc.:

o Mrs May addressed EU leaders in Brussels last night

o Chequers meeting next week should sort everything out

o Boris reported to be distancing himself from Brexit consensus

START THE DAY WITH A SONG:

Yesterday’s song was Holocene by Bon Iver. Finishing off the week, who sang:

Passion fruit and holy bread

Fill my guts and ease my head

Through the early morning sun

I can see her here she comes

RETAIL NEWS WITH NICK BUBB:

Consumer Confidence Watch: There are many measures of consumer confidence these days, but the most widely followed is the monthly GFK Consumer Confidence index and their overnight survey reports an unexpected fall to -9 in June, from -7 in May, flagging the impact of Brexit uncertainty. Economists polled by Reuters had expected the index to hold steady. Joe Staton, client strategy director at GfK, said: “We are reporting falls across all key measures…Scores on personal finance are down but there is a more marked deterioration in our levels of optimism about the general state of the economy.”

Trade Press: The front cover of Retail Week magazine today flags up the main feature story on “Retail reboots”, after the news that M&S has tied up with Microsoft and Google has tied up with Carrefour, to develop AI technology. RW also have features on “The newcomers shaking up retail delivery”, “What shoppers think of the Sainsbury/Asda merger” and “How Debenhams aims to respond after another profit warning”. And in his column, the Editor thunders that “Retailers must wake up to the importance of values”.

BDO High Street Sales Tracker: We flagged on Wednesday that sales at John Lewis wilted last week, as the weather warmed up, and today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains for last week, w/e Sunday June 24th, is also downbeat, although weak trading is blamed on apparently strong comps rather than the hot weather. BDO Fashion Store LFL sales were down by 7.8% and, including Homewares and Lifestyle sales, total Store LFL sales were 5.4% down. And overall Online sales were only up by 9.8% (with Online Fashion sales alone up by a mere 8.9%).

News Flow Next Week: As July (and the second half of the year) gets underway, attention turns to the start of Wimbledon, as well as the traditional “Christmas in July” Christmas range previews.  In terms of company news, Wednesday brings the Sainsbury Q1 and the Topps Tiles Q3, whilst we get the Superdry finals and the ABF (Primark) update on Thursday.

World Cup Watch: As expected, a weakened England team came up short against better quality opposition in their third and final qualifying match against Belgium last night. So England came second in Group G and therefore play the winner of Group H (mighty Colombia) in their “last 16” knockout match, on Tuesday evening next week. The “Three Lions” against the “Coffee Growers”!