Langton Capital – 2021-02-26 – Tough trading, reopening, Budget, beer duty, Shaftesbury etc.:
Tough trading, reopening, Budget, beer duty, Shaftesbury etc.:
A DAY IN THE LIFE:
Don’t you ever find it a bit frustrating when people mix up data with insight?
A telephone directory, if such a thing still exists, is full of data, but insight is having a view as to who is the best plumber or restaurant etc and, whilst both are valuable, it’s much easier to get hold of the former than it is the latter.
Indeed, the Internet has made data virtually free.
We heard the other day that board packs were routinely coming in at 100, 200, even 400 pages in length. Just dig out an academic PDF on footfall, car sales, inflationary trends or whatever and hit print. The resulting product will be full of data but as for true insight, well that’s another matter.
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Anyway, we added a Redwing and a Treecreeper to the list of birds seen in the garden since Lockdown 3.0 started. I think we’re up to about 30. On to the news:
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• Anything before Covid feels like ancient history but it’s worth remembering that 2018 and 2019 were tough for some. See Premium
PUBS & RESTAURANTS:
Covid – the state of play:
• We are on the path to reopening – but it is important to take our bearings from time to time & ensure that there is nothing coming in from left field that may upset things.
• The NIESR says, slightly worryingly, that the R rate ‘is starting to move up to 0.9 – 1.0 from a range of 0.8 – 0.9 where it had been since mid-January.’ It says the number of new cases per day should continue to fall and should be ‘around 6,800 on 8th March, when schools reopen.’
• The NIESR says there are regional differences (Mr Johnson has said there are not and that England will be treated as one area). It says ‘currently, London has the lowest R number while Scotland and Yorkshire and the Humber again have the highest, with both slightly above 1.0.’
• The NIESR says ‘strong data relative to that forecast in the previous week has increased our estimates of R number and regional differences remain pronounced with Scotland, Northern Ireland and Yorkshire and the Humber above 1.0.’ Worth keeping an eye on.
• It will be hard to please everyone, but Beer Duty could be cut in pubs and possibly be raised in supermarkets in order to encourage people to go out post reopening. PM Boris Johnson has said that his chancellor is ‘looking closely’ at the potential move.
• On the above topic, some 68 Conservative MPs have signed a letter urging Rishi Sunak to cut Beer Duty. The British Beer & Pub Association has said the very cautious reopening of pubs will cost the sector £1.5 billion in lost trade in April alone, as 3 in 5 pubs will not be able to open or be viable with outside service only.
• The BBPA points out ‘the UK pays £3.6 billion in Beer Duty each year – more than Germany, Spain, Italy, Netherlands & Ireland combined. British beer drinkers pay 11 times more duty on beer than those in Germany as well as Spain.’ One of the 68 MPs above, Richard Holden, says ‘our pubs are at the heart of our communities and lockdown has hit them harder than any other sector. Whilst the government support has been welcome, it has not made up for the massive impact of being closed for so long on these vital local institutions. The best way for them to build back better after this crisis is to get people back into pubs and the best encouragement for publicans and the public is to see real action on beer duty.’
• BBPA CEO Emma McClarkin says ‘it is up to the Chancellor, Rishi Sunak, to deliver the support our pubs and brewers need. That includes a beer duty cut that allows them to survive and thrive in the future.’
• Charity the Plunkett Foundation has launched a UK-wide public appeal to help save pubs through community ownership. The charity supports around 700 community businesses including 150 community pubs across England, Scotland, Wales and Northern Ireland. The charity is calling for clarity on reopening.
• The Give Hospitality A Break campaign is urging the Government to further extend the moratorium on lease evictions for another three months. It says businesses should be allowed two years to pay back just half of the rent owed. The campaign’s founder Tony Lorenz says ‘clarity is urgently needed to avoid bankruptcies, and the follow-on mass unemployment in the sector. That too would have knock-on impacts on the tourism and travel industries, crucial parts of the UK’s domestic offering.’
• Mintel has suggested that the foodservice industry can learn from other retailers about how to keep in touch with and service customers through virtual events. It says that it has noted restaurant operators pushing meal kits and holding live stream cooking demonstrations via social media.
• The Guardian reports Tony Danker, the director general of the CBI, as urging chancellor Rishi Sunak to extend support for struggling firms and their workers and do more to boost companies in sectors of the economy subject to the longest lockdown controls. Danker says ‘the chancellor must finish what he started: doing whatever it takes to back UK business. The more businesses – the more jobs – that we can see through the crisis, the faster we can snap the economy back into shape.’
• The road out of lockdown is becoming clearer – but some companies, supermarkets, food producers, Zoom, delivery, outdoor equipment manufacturers, beer gardens and others, have been winners during lockdown.
• Premier Foods’ research suggests that ‘91% of Brits intend to cook as much, or more, in year ahead.’ It says that ‘people are experimenting more in the kitchen’ and says ‘one third of households have added a dish to their weekly ‘go-to’ evening meals over the last year.’
• The company’s ‘Premier Foods Kitchen Cooking Index’ finds that ‘how and what people cook in the pandemic has also changed. British households have turned away from ready meals and are instead opting to do a little bit more in the kitchen.’
• PFD CEO Alex Whitehouse says ‘it’s great to see Britain reconnect with cooking again, spending more time in the kitchen to experiment with different flavours and create new, often healthier dishes, for ourselves and our loved ones.’ He says ‘while the last year has been difficult for people across the country, for many, cooking and enjoying meals together has become a really important part of getting through it.’
• Research by the Social Market Foundation has suggested that up to 800,000 families are at risk of losing their homes when the ban on repossessions ends in April.
• The BBC reports that the number of people on furlough rose by 700,000 in January to some 4.7 million. Some 1.15 million of the total are hospitality workers. Official stats show that, by the middle of February, some £53.8bn had been claimed in furlough payments.
• The Resolution Foundation says that ‘Furlough has once again played a crucial role in protecting incomes and keeping a lid on rising unemployment’ but it adds ‘with almost five million workers still on furlough in the most recent data, our biggest labour market challenges may be ahead of, rather than behind, us.’
• ASDA is both consulting on cutting around 5,000 jobs and saying that it plans to add 4,500 jobs in its online offer.
Company & other news:
• Delayed figures. See Premium
• Comps will change radically in a couple of weeks. See Premium
• West End property owner Shaftesbury yesterday updated on trading sying that it has seen ‘economic activity significantly impacted by lockdowns and pandemic containment measures.’ This will not come as a surprise to the hospitality industry.
• Shaftesbury says the ‘continuing government measures to control the Covid-19 pandemic are having a significant impact on economic activity and consumer spending patterns.’ It has collected 45% of rents for Q4 2020 and 36% of rent for Q1 2021. The company says it is seeing ‘early signs of improving occupier interest.’
• On a brighter note, CEO Brian Bickell says ‘the relaxation of pandemic restrictions will herald the revival of the West End’s economy in the months ahead, with a gradual return of local and domestic footfall and the reopening of hospitality businesses, shops and its world-renowned cultural and leisure attractions.’ Mr Bickell adds ‘our portfolio is located in the heart of the most vibrant part of London and we are optimistic that the appeal of our carefully-curated destinations will drive the return of footfall and trading.’
• The Coca Cola Co has announced it will buy a controlling interest in sports drink brand Bodyarmor. Journal FoodBev, however, has been told by Bodyarmor that the announcement of a done deal was still ‘premature’ and there remains other potential courses of action for the business. It says ‘although Coca-Cola buying a controlling interest in Bodyarmor is a distinct possibility…this is one scenario for Bodyarmor, there are other potential options for the future of the business.’
• Homeless charity Only A Pavement Away has announced that it is ‘working with Pennies, the UK’s leading fintech charity, and is looking for partner hospitality operators to adopt its customer micro-donation solution to help raise vital funds and continue supporting vulnerable people back into employment.’
• Results due later: Shake Shack, Beyond Meat, Airbnb. See Premium.
HOTELS & LEISURE TRAVEL:
• Uncertainty remains.
• Transport secretary Grant Shapps has said foreign travel may be legal from 17 May but he says there are factors at play that are beyond the government’s control.
• Meanwhile, bookings are booming, both for domestic holidays and trips overseas.
• Aparthotel operator Staycity says ‘bookings across the group’s 11 UK properties rose 333% in the 24 hours after the announcement, compared with the previous week.’ It says the surge in demand was “exciting news” for Staycity, which suffered earlier than most from the impact of the pandemic with its property in York being at the centre of the first Covid-19 cases in the UK back in January 2020.
• Staycity says ‘this demonstrates the pent-up demand for travel and the fact guests are keen to book trips and to have something to look forward to. It’s a huge relief to us, and the hospitality industry as a whole, to have this clear evidence that people are keen to make up for lost time – and also that they have confidence in the stringent hygiene protocols the industry has put in place.’
• An overseas holiday specialist has told us they have seen a ‘fantastic surge in travel bookings.’ The company adds ‘we were 600% on Tuesday. And yesterday we had our best ever sales day in 19 year history of the company.’
• Heathrow says ‘we can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale.’
• Spain is reportedly ‘in talks’ with the UK about vaccine certificates for visitors this summer.
• Jet2 boss Steve Heapy tells Travel Weekly ‘the fact that the end is in sight has given people the confidence to book.’
• Elsewhere, Carnival has extended the suspension of operations from its US ports until June.
• Network Rail says there could be around 10% fewer train services running the country opens up again.
• Experiential. A ‘TV-inspired ‘Ninja Warrior’ venue is to open in The Broadway shopping centre in Bradford.
FINANCE & MARKETS:
• Lloyds, which owns The Halifax, has said it expects house prices to fall at the end of this year. The suspension of Stamp Duty on some houses will stop at some point. House prices hit new highs last year.
RETAIL WITH NICK BUBB:
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 22 Feb 21 Royal Caribbean Q4 & FY numbers
• 23 Feb 21 Intercontinental Hotels FY numbers
• 24 Feb 21 Accor FY numbers
• 25 Feb 21 Shaftesbury AGM
• 25 Feb 21 Shake Shack Q4 & full year
• 25 Feb 21 Beyond Meat FY numbers
• 25 Feb 21 Airbnb FY numbers
• 25 Feb 21 AB InBev FY numbers
• 25 Feb 21 ABF full year update
• 26 Feb 21 – Various Eateries FY numbers
• 2 Mar 21 PPHE FY results
• 3 Mar 21 Nichols FY numbers
• 3 Mar 21 Government Budget Statement
• 4 Mar 21 William Hill FY numbers
• 5 Mar 21 Marston’s SA Brains transaction webinar
• 11 Mar 21 Playtech FY numbers
• 11 Mar 21 Morrison’s FY numbers
• 15 Mar 21 Carlsberg AGM
• 16 Mar 21 Gregg’s FY numbers
• 17 Mar 21 Hostelworld H1 numbers
• 18 Mar 21 Fever Tree FY numbers
• 23 Mar 21 DP Eurasia FY numbers
• 24 Mar 21 M&B AGM
• 25 Mar 21 Compass Group H1 update
• 30 Mar 21 AG Barr FY numbers
• 8 Apr 21 Sportech FY numbers
• 23 Apr 21 Gear4Music results
• 28 Apr 21 Carlsberg Q1 numbers
• 4 May 21 Campari Q1 numbers
• 7 May 21 Intercontinental Hotels Q1 numbers
• 12 May 21 Compass Group H1 numbers
• 12 May 21 Stock Spirits H1 numbers
• 18 May 21 Britvic H1 numbers
• Est 19 May 21 Marston’s H1 numbers
• 27 Jul 21 Campari H1 numbers
• 10 Aug 21 Intercontinental Hotels H1 numbers
• 18 Aug 21 Carlsberg H1 numbers
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
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