Brewdog, Chop’d, CDG delivery brand, tourist taxes etc.:

A DAY IN THE LIFE:

Over a hundred years after the publication of Einstein’s theories of relativity, I’ still struggling to get my head around the idea that time is not fixed.

So, it’s perhaps not surprising that I’m having similar problems adapting to the new definition of the word ‘truth’ and to assimilate the idea of ‘false news’ etc.

However, it’s probably worth noting that our politicians seem to be having no such issues. They’ve embraced the idea that truth is relative splendidly and are carrying on with their lives regardless.

Very adaptable, these politicians. Very adaptable. On to the news:

PUB, RESTAURANT & DRINK PRODUCERS:

• Brewdog has reported Dec 17 accounts to Companies’ House. The group says ‘2017 saw us shifting it up a gear across planet Earth’.

• Brewdog says it grew UK sales by 78% in 2017. It launched its brewery in the US. It sees its major growth opportunities as coming from wider distribution, international breweries, international sales, craft spirits and Brewdog Bars. It says it should have opened 8 bars in H1 2018.

• Brewdog 2017 revenue was £111.6m (2016: £71.6m). Adjusted EBITDA was £8,98m (2016: £6.10m). Brewdog reports ‘we are forecasting further strong revenue growth for 2018’.

• Brewdog reported PBT for 2017 is £1.4m, down from £3.8m last year. Following a number of fund-raisings, shareholders’ funds amount to £146.8m (2016: £37.6m).

• Chop’d has reported abbreviated full year numbers to end-December 2017 to Companies’ House showing that accumulated losses increased by around £585k over the year. The company says it ‘is currently undergoing strategic restructuring to secure sound operation in the coming years.’ It adds ‘the directors are confident that these changes would improve EBITDA of the business, whilst monitoring the cash flow of the business to meet the company’s obligations’.

• Casual Dining Group to operate a delivery only brand.

• Casual Dining Group has launched the trial concept, Blazing Bird at a selection of its Las Iguanas restaurants, the MCA has reported. Las Iguanas managing director Mos Shamel stated: ‘While it’s very early days for Blazing Bird, we’re excited by what we think is a significant opportunity, and the initial consumer reaction has been very positive’.

• Cutting capex. This along with cutting marketing spend and other ‘invisibles’ is often a sign of concern on the part of the company making the cuts. We have noticed this becoming something of a trend in recent months

• The assets of Hummus Brothers has been put up for sale by Administrators. Resolve’s Ben Woodthorpe, who is managing the affairs, business and property of the brand, said: ‘The company has suffered from a loss of revenue in recent times driven by rising product costs and greater competition in its sector. The outlets are sited in favourable locations in London and so the current focus is trying to maximise recoveries for creditors’.

• AB InBev has been granted permission to import and distribute some of its international craft beer brands in the US.

• Just under three quarters of Brits (73%) have stated they are intimidated by restaurant wine lists, while 58% don’t feel they have enough wine knowledge to order with confidence.

o Shake Shack is to open its first site in the City of London. The unit, in Cannon Street, will target the lunchtime trade.

o LVMH is to launch a marketing campaign to promote private viewings of its wine cellars & manufacturing sites.

o Loss-making online retailer Koovs has secured investment from Future Group, which has taken a 29.9% stake in the ecommerce start-up.

o The Recruitment & Employment Confederation has said that wages are rising as the number of candidates for vacancies has fallen

HOLIDAYS & LEISURE TRAVEL:

o UK Hospitality has warned against a tourist tax in Scotland saying ‘a tourist tax in Edinburgh, or any part of the UK, could be disastrous for hotels and the hospitality sector, the UK’s 3rd largest private sector employer.’

o UK Hospitality CEO Kate Nicholls says ‘the introduction of another tax aimed at hardworking, innovative and economically and socially important hotels in Edinburgh could be potentially disastrous knock-on impact on businesses.’

o Demand for flights to Russia is up 256% day on day per Lastminute.com. There’s some football going on.

• Traveldoo reports business travellers are expecting very little impact on their travel plans from the World Cup. Of 100 business travellers, 80% had no plans of cancelling or postponing work trips during the World Cup.

• Personal holiday bookings, however, are under some pressure per GfK as families are postponing bookings while England remains in the tournament.

• Holiday bookings are probably being delayed rather than abandoned, however, and they should pick up sharply when England exits – or when the team wins the tournament.

• However, holiday companies do have something of a reputation for panic. And, if not panic, they have the need to match each other if one were to cut prices in the face of slack bookings. Tour operators for one will be pleased when England exits.

• Iata warns jet fuel prices will soar by more than a quarter this year amid risk of trade-wars, geopolitical tensions and rising costs. Demand is being driven by lower fares with global passenger growth up 6.1% yoy in May.

• New Salisbury area poisoning likely to be a negative for tourism in the area.

• Manchester Airports Group reports profits up 5.6% to c£360m for the year to March, with EBITDA growing for the seventh consecutive year. Passenger growth was up 6.7% to 58.9m across Stansted, Manchester and East Midlands airports.

• Qatar-backed Katara acquires New York Plaza Hotel from Sahara India Group and Ashkenazy Acquisition Group for $600m.

FINANCE & MARKETS:

• Mark Carney says that expectations among British households that the central bank will raise interest rates this year seemed well-placed to him. He says he is increasingly confident that the British economy’s weak start to the year was mostly due to bad weather.

• Donald Trump’s anti-China tariffs come into force today. Beijing has said that it will be ‘forced to make a necessary counterattack’. The EU has already imposed tariffs on certain US products

• Sterling up a shade at $1.3215 and €1.1307

• Oil $77.25

• UK 10yr gilt yield down 3bps at 1.25%

• World markets: All up yesterday & Far East up today. UK forecast to open up around 30 points.

• Brexit etc.:

o Chequers today. Mrs May says Cabinet has a ‘duty’ to back her. Soft Brexit proposal likely, Brexiteers said to be ‘furious’.

o David Davis reported to have said today’s proposals are ‘unworkable’.

o 46 Conservative MPs write to Mrs May urging her to listen to business and get a deal that enables “frictionless trade to continue”.

o Former Trade Department official David Henig says any such deal would not be acceptable to the EU

o Leaks, what leaks? Sky News says that ministers will have their mobile phones taken from them when they arrive at Chequers.

o Jaguar says it could not stay in Britain in the case of a ‘bad’ Brexit. One person’s bad, however…..

o The head of the UK’s aerospace trade body has said that his industry would not function properly if friction were introduced into the pan-European transfer of parts etc.

START THE DAY WITH A SONG:

Yesterday’s song was War by Edwin Starr. Today, who sang:

Opposites attract,

It’s physical

Only logical

You must try to ignore that it means more than that ooo

PRIOR DAY TWEETS:

• Later tweets: BDO & MCA suggesting wet sales better than food. Yes, true. And long may it last but how long before that end of the pitch gets overcrowded?

• Centre for Retail Research: W Cup ‘worth billions.’ Well, hang on. More will be spent – but not necessarily ‘earned’. That comes later…

• GfK on flip side of W Cup. Sees slump in holiday bookings for summer. Domestic heatwave doesn’t help. Should be spending postponed not lost

• Services PMI suggests 1) Q2 GDP 0.4%, 2) rate rise poss. in Aug, 3) B of England talk of Q2 pickup (but still below trend) could be right

• Competition (albeit embryonic) for Whitbread as EasyCoffee secures £10m to fund roll out of vending machines?

RETAIL NEWS WITH NICK BUBB:

o Trade Press: Retail Week magazine has not been published this week, but in Drapers magazine today (which is a Sustainability special issue) the main News story is that the heatwave has sparked a surge in sales of summer products for fashion retailers. Drapers also flag that retailers are lining up to take on New Look’s CVA stores (with Mountain Warehouse said to be interested in 4/5 stores) and that industry experts have said that Clarks should look to its heritage and bring footwear expertise back into the business  (following last week’s shock exit  of CEO Mike Shearwood). Drapers also highlight the John Lewis profit warning and note that The Original Factory Shop is to close 32 stores as part of its CVA.  

o BDO High Street Sales Tracker: We flagged on Wednesday that sales at John Lewis wilted in the heatwave last week, but today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains for last week, w/e Sunday July 1st, is more upbeat, reflecting its lower exposure to “indoor”/household goods. BDO Fashion Store LFL sales were up by 5.6% although, including weak Homewares and Lifestyle sales, total Store LFL sales were only 1.0% up. Overall Online sales (which are separately reported by BDO) were up by a healthy 17.1%, on top of 27.2% growth a year ago (with Online Fashion sales alone up by as much as 20.9%).

o News Flow Next Week: As the second half of Wimbledon gets under way and the World Cup builds to a climax, next week is busy in terms of Retail news, kicking off first thing on Tuesday with the BRC-KPMG Retail Sales figures for June, closely followed by the Marks & Spencer Q1/AGM and the Ocado interims. Wednesday brings the Burberry Q1. And then on Thursday we get the Dunelm Q4, the ASOS Q3 and the Pets at Home AGM.