Langton Capital – 2020-08-19 – WFH, landlords, EOTHO, track & trace, closures & other:
WFH, landlords, EOTHO, track & trace, closures & other:
A DAY IN THE LIFE:
Why do dogs insist on drinking random fluids from any receptacle other than the clean water bowls that they’ve been provided with?
Because it seems that the dead leaves, live insects, mosquito eggs and random detritus that float in drip trays or buckets left in the rain do something for them.
Or maybe it’s their ‘get it down your gullet, let your stomach decide’ instinct coming through?
But even then, if there’s the choice of drinking from a mud spattered plant pot or a gleaming stainless steel bowl….?
Which reminds me of the book Client Nine. Rich man, politician, been places and going higher and yet brought down by similar, unseemly habits.
Worth a read but we must move on. Will try to take advantage of EOTHO today. We hear that sales are still very strong. We’ll ring a few pubs & see if they’ve got space. Millington, Pocklington or Stamford Bridge areas, maybe eastern York.
Anyway, time to move on to the news. Follow us on Twitter at @brumbymark.
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DEVELOPING TRENDS: A bit of a catch-all comment but times (re Working From Home, city centres vs suburbs, discounting, staycations etc), they are a changing. 19 Aug 2020:
See Premium Email re the above:
PUB & RESTAURANT NEWS:
Eat Out to Help Out:
• Just four days left after today. Unless there’s an extension…
• The Treasury has reported that diners (and coffee, cake & snack consumers) used the Eat Out to Help Out scheme more than 35 million times in its first two weeks.
• More than 85,000 restaurants have now registered for the scheme and, as Tasty mentioned yesterday, more restaurants have reopened to take advantage of the taxpayer funded discounts. See Premium Email.
• Chancellor Rishi Sunak says the scheme is ‘supporting local jobs in the hospitality sector.’ He adds ‘to build back better we must protect as many jobs as possible, that is why I am urging all registered businesses to make the most of this by claiming back today – it’s free, simple and pays out within five working days.’
• The government has set aside £500m to cover the scheme. Take-up, though tracking upwards, is currently running below that level. See comments in today’s and earlier Premium Emails re the scheme and possible developments at month-end.
Track & Trace.
• The Morning Advertiser reports that 85% of Brits think that pubs are meeting or exceeding the requirements for safe distancing and Covid-secure trading. Streetbees found that consumers ‘have seen their expectations on Covid-secure guidance met, 82% of those quizzed also stated they would be put off visiting a pub if they thought it wasn’t following safety measures.’
• Streetbees reports that 59% of respondents would be put off going to a restaurant in the event that local measures were put in place as a result of a Covid-19 cluster such as those seen in Leicester and Aberdeen.
• The Guardian has reported previously on ‘concerns that JD Wetherspoon is failing to prevent overcrowding in pubs in its 900-strong chain.’ See yesterday’s email.
• Elsewhere, there are now reports that pub operator & brewer Samuel Smith’s is not taking customer details. This is currently voluntary although it is deemed best practise and is to become mandatory in Scotland.
• Sam Smith’s says customers would only give false names and numbers and stalkers could use information to pester women. This does not seem realistic. Having dined and lunched in half a dozen pubs & restaurants in the last month, Langton has seen no evidence of Mickey Mouse Tel 999 type entries in Track & Trace documents. The numbers all looked to be genuine although a few, doubtless were false. Nor have we been stalked.
• The BII, BBPA and UK Hospitality have jointly written an open letter to the hospitality sector reiterating the vital importance of accurate and robust Test & Trace data collection as a critical part of Covid secure measures.
• The bodies say ‘we recognise that the industry has a collective responsibility for ensuring the safety and confidence of customers visiting our venues. Extensive customer research has shown how essential the consistent operation of Covid secure measures is to re-building sustainable trade through confident customers returning to our venues.’
• It seems that they, the trade bodies, are concerned that the apparent ‘it’s not my game, I won’t play by these rules’ attitude could reflect on the whole industry and be seen as churlish or even dangerous. By consumers or government or both.
• From the customer’s point of view, nobody wants to receive a phone call telling them that they must isolate for fourteen days. But you’re not really striking a blow for freedom if you call yourself Sherlock Holmes on Whitehall 1212 and most consumers are surely willing to play their part?
• The trade bodies say ‘we know that the majority of pubs and restaurants are managing their Test & Trace processes well, despite the challenging times they are operating in.’
• They are ‘making customers aware that they can only book tables for a maximum of 2 households when seated inside.’
• The trade bodies mentioned above say ‘report data taken from the Yumpingo and CGA campaign “We hear you”, reveals that nearly 80% of consumers make their choice about which venue they will visit, based on the precautionary COVID-19 measures those businesses have put in place. Not so much EOTHO, then?
• Elements of the grey market may still be hesitant when it comes to eating out and confidence may only be as good as its weakest link.
• The survey above suggests ‘initial nervousness about venturing out to eat and drink is decreasing, with also 40% of customers visiting venues completely new to them.’
• UKH says ‘we must come together as a sector to show how committed we are to ensuring the continued safety of our customers and teams, at a time where we are seeing a huge surge in customer numbers with customers taking advantage of the “Enjoy Summer Safely” campaign.’
• Pizza Express plans to close around a fifth of its UK restaurants under a CVA that puts 1,100 jobs at risk. The company aims to cut its rent bill at sites that do not close. Some 73 of the group’s 470 UK stores will close.
• Pizza Express is also reported to have been put up for sale by owner, Chinese investment firm Hony Capital. CEO Zoe Bowley says that it has taken ‘incredibly tough decisions to safeguard Pizza Express for the long term’ and adds that ‘in most cases, there is another Pizza Express nearby, either already open or reopening soon, to welcome our customers.’
• We’ve not seen any estimates recently as to how many restaurants will never reopen. Or will reopen and then close. Or change hands via a bankruptcy or distressed sale but perhaps 10% to never open and another 10% to reopen but only after they have changed hands and new operators have been bribed by landlords to take on leases doesn’t seem like a crazy suggestion.
• With the end of support looming, Jonathan Downey of London Union tweets ‘we’re re-opening Dinerama on Fri/Sat from 17:00-00:00 and then very weekend until 26 Sep when it looks like we’ll be closing the doors for good. We haven’t agreed a deal with our landlord but plan to make the most of our time left. Be great to see you.’
• Downey says ‘yesterday I wrote to 54 of our Street Feast team to confirm that, after the August furlough payment next week, that’s it. We’ve got nothing left for them. 60% of our people gone, another 30% still at risk. We may only be able to save just 10 of our full-time 90.’ He adds ‘these numbers don’t include the 250+ additional, part-time/seasonal jobs working on spring/summer events and Winterville. We won’t provide any of that experience and extra cash for young people in 2020.’
• Oldham, Greater Manchester council leaders have been told that they are 48hrs away from a Leicester-style shutdown. Council leaders have said that a full lockdown would be devastating for the town’s economy. Oldham council leader Sean Fielding says ‘the impact of a local lockdown economically on Oldham would be catastrophic and we desperately want to avoid that.’
• Hedge fund and activist investor Starboard Value, which has stakes in Papa John’s International and Darden Restaurants in the US, is reportedly set to raise around $300m to go public as a ‘blank check or special purpose acquisition company’ that will look to make acquisitions across distressed businesses post the Covid-19 lockdown.
• Re a potential second spike, The Telegraph quotes food retailers as saying they are better-prepared than they were in March. Tesco boss Dave Lewis says that ministers’ messaging will be key to avoiding chaos if the worst happens.
• Shoppers are reported to have made two million fewer trips to the supermarket than expected in the week after face mask rules came into force per Kantar.
• The government has made funding available to support green innovation in whisky and spirit distilleries across the UK.
• M&S yesterday said that it is to make 7,000 staff redundant.
• The Champagne region in France has reportedly agreed to a material yield reduction for the current harvest. The industry has agreed on 230m bottles.
• Redchurch Brewery has announced the appointment of a voluntary liquidator.
HOLIDAYS & LEISURE TRAVEL:
• The Telegraph reports that short let prices, typically on Airbnb, have fallen sharply, particularly in London. This may impact hotel room rates over time.
• Property agent Hampton’s says that the supply of rental properties across central London is up 42% year on year.
• Although maintaining the it wishes to move assets off its balance sheet, tour operator TUI has said there will be ‘no forced sales’ of assets.
• Aviation services companies at Southend and Stansted airports have confirmed that they will be making staff redundant after EasyJet said that it will be reducing service levels.
• Transport Focus has said that rail fares will have to fall if consumers are to be encouraged to travel.
• Accor reports that it has signed 14 new northern European hotels during first half of 2020
• Camping gear sales are reported to have increased sharply as a result of the boom in staycations (per ASDA, John Lewis & Halfords).
• Chinese media giant Tencent has taken a minority share in French mobile game company Voodoo. Voodoo has around 300 million monthly active users from its suite of mobile games.
• There has been confusion north of the border as to whether escape rooms may or may not operate. The largest operator in Scotland, Escape, has shut its venues but there are reports that these will be allowed to immediately reopen. Premises had reopened for the first time on 1 August.
• US President Donald Trump has suggested that Oracle would be ‘a great company’ to take over TikTok’s US operations.
FINANCE & ECONOMICS:
• Sterling up at $1.3238 and €1.1093. Oil lower at $45.10. UK 10yr gilt yield unchanged at 0.22%. Markets down in Europe yesterday but mixed elsewhere. London set to open up around 15pts as at 6.30am.
START THE DAY WITH A SONG:
The song has been furloughed. See you on the other side.
RETAIL WITH NICK BUBB:
• Grocery Market Share Watch: The latest monthly Kantar and Nielsen grocery market share figures (for the 4/12 weeks to Aug 8th 9th) came out yesterday morning and the Kantar overview was headlined “Grocery growth slows as market eases out of lockdown”, flagging, inter alia, that take-home Grocery sales increased by 14.4% in the last 12 weeks and that food price inflation rate has dipped from 3.6% to 2.9%. The rival Nielsen survey was headlined, rather inelegantly “British ‘staycations’ help to fuel UK grocery spend this summer, as 97% of growth in supermarket sales comes from online”, flagging that supermarket sales slowed to +7% over the last 4 weeks, as shoppers settled into new shopping routines post-lockdown, with store sales broadly flat and Online sales up 117%.
• News Flow This Week: The much-delayed final results from the hapless Frasers Group (aka Sports Direct) come out tomorrow, along with the AO.com AGM. First thing on Friday we then get the widely followed GFK Consumer Confidence index for August, as well as the ONS Retail Sales figures for July…
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 18 Aug 20 ASDA trading update
• 20 Aug 20 Tasty AGM
• 21 Aug 20 GfK consumer confidence numbers
• 2 Sept 20 Gym Group H1 numbers
• 8 Sept 20 Fever Tree H1 numbers
• 8 Sept 20 DP Eurasia H1 numbers
• 10 Sept 20 Morrison’s H1 numbers
• 10 Sept 20 Rank FY numbers
• 30 Sept 20 Compass Group FY update
• 30 Sept 20 Everyman Media H1 numbers
• 30 Sept 20 888 Holdings H1 numbers
• 6 Oct 20 Restaurant Group H1 numbers
• 9 Oct 20 JD Wetherspoon FY numbers
• 3 Nov 20 DART Group AGM
• 24 Nov 20 Compass Group FY numbers
• 26 Nov 20 Britvic FY numbers
Many results are likely to be delayed. For information purposes, the results below were delivered at these dates last year.
2019 COMPARATIVE RESULTS:
15 Aug 19 Vianet trading update, 22 Aug 19 Playtech H1, 22 Aug 19 Sportech H1, 28 Aug 19 Loungers FY results, 28 Aug 19 Fulham Shore AGM, 30 Aug 19 Gear 4 Music AGM, 6 Sep 19 Greene King AGM, 10 Sep 19 888 Holdings H1, 12 Sep 19 Comptoir H1, 19 Sep 19 Diageo AGM, 19 Sep 19 City Pub Group H1, 19 Sep 19 Saga H1, 23 Sep 19 Brighton Pier Group FY, 24 Sep 19 TUI Group FY trading update, 24 Sep 19 DP Poland H1, 24 Sep 19 Ten Entertainment H1, 24 Sep 19 Hotel Chocolat FY, 24 Sep 19 AG Barr trading update, 24 Sep 19 Tasty H1, 25 Sep 19 Shepherd Neame FY, 26 Sep 19 Time Out H1, 26 Sep 19 M&B FY trading update, 26 Sep 19 SSP FY update. 27 Sep 19 Escape Hunt H1
• Leasehold eviction moratorium due to end next month. Do we think landlords want the keys back? No, thought not. Might change if Hugh Osmond (and others?) are successful in raising cash for bottom fishing re sites.
• What betting stronger operators extend the EOTHO scheme from their own pockets, press home their advantage? Why not?! Also, note today, Tasty says it might re-close some re-opened sites post EOTHO.
• Domino’s offering 25% off orders over £25. Could be a) a return to endemic discounting in delivery or / and b) a response to being left out of the EOTHO scheme??
• Footfall in West End down sequentially week-on-week. Ooh-err, wasn’t meant to happen? Dog days of August, yes, but if the ‘recovery’ (albeit for certain geographies) is stalling now, that wasn’t part of the plan.
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