Langton Capital – 2021-06-28 – Football, re-opening, labour issues, City Pub Group, Gregg’s, ESC etc.:
Football, re-opening, labour issues, City Pub Group, Gregg’s, ESC etc.:
A DAY IN THE LIFE:
Our dog, like many canines, is an expert at making people feel guilty because, boomerang-like, he can project pathos by a glance at anyone failing to feed him when caught in the act of carrying a plate and then gather it up to throw out again at whoever might be opening a packet of biscuits or a bag of crisps.
His eyes will dart hither and yon until he spots his target. Then he’ll look up through his furrowed brow and chuck in a whimper for good measure but, if you weaken and feed him, he’ll remember it for years and simply redouble his efforts going forward as he’s done the maths, it’s worth his while.
And I can identify with this exchange in Uncle Buck (as Buck asks for advice on his dog-sitting role for his sister): Buck Russell : How many times a day does the dog eat? Cindy Russell : How many times do you think? Buck Russell : I don’t know, four or five. Cindy Russell : He eats once a day.
Anyway, Langton’s back in The Smoke this week where the weather, for once, is set to be worse than it is up north. On to the news:
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PUBS & RESTAURANTS:
• KAM Media has produced a report alongside Zonal that ‘examines the customer decision process from deciding whether to go out and researching a venue, through to ordering, paying, reviewing and choosing whether to return.’ Getting this right is pretty critical to financial success. KAM says ‘the research identified increased competition from ‘in-home entertainment’ with a 167% increase in consumer spending on TV subscription services, such as Disney+ and a 143% increase in spending on video gaming meaning that hospitality must work even harder to ensure every interaction with their customers, at every stage in the customer journey, is as near perfect as it can be.’
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• The BBPA predicts that England fans will buy 5.25 million pints on Tuesday 29th June when the national team plays against Germany in the round of 16 in the Euros. However, the boost to pubs from beer sales during the match would be greatly altered by the ongoing restrictions still in place on the trade, according.
• CEO of the BBPA Emma McClarkin said ‘Whilst that is a very welcome boost to our trade, it is over 1 million fewer pints sold than if all the restrictions on pubs had been lifted on 21st June as per the original roadmap. To secure our pubs for future tournaments and national occasions like the Euros, there can be no further delays to the lifting of restrictions. On July 19th all restrictions on pubs must be lifted.’
• The Welsh Beer and Pub Association (WPBA) predicted that Wales fans would have bought 500,000 pints on Saturday when Wales played against Denmark at the Euros.
• Per Lumina Intelligence, the eating out market in the UK is set to grow by 33.4% in 2021, reaching a value of £63.6bn, with the industry set to exceed its 2019 market value by 2022.
• UKHospitality states that Phase 1 of the Government’s Events Research Programme will help businesses running mass events begin preparations for their resumption and boost confidence across the industry. CEO Kate Nicholls said ‘The report’s findings that there were no substantial outbreaks of Covid-19 identified following any of the first phase of test events, along with the continued success of the vaccine programme, should give the Government confidence to go ahead with a full and final lifting of restrictions next month.’
• UKHospitality Scotland Executive Leon Thompson said ‘UKHospitality Scotland continues to be clear in calling for the introduction of a much needed and overdue licensing scheme for short-term lets. This is the third consultation on the introduction of licensing for this area, and the need for this scheme only continues to grow.’
• Kantar data shows that supermarket sales of alcohol increased by £29m in June, boosted by good weather, the long bank holiday weekend and the run up to the football. Beer, sparkling wine, flavoured alcohol beverages (FABs,) and non-alcoholic beer in particular did well in June.
Variable reopening patterns:
• The British Beer & Pub Association reports the finding that ‘4 in 10 Brits say their favourite pubs are still closed due to ongoing restrictions.’ The BBPA says ‘pubs remain closed across the UK due to the current restrictions they face, which require them to ensure social distancing at all times, no standing and maintaining the rule of six to a table. It says that pubs still closed do not have the space to operate the social distancing and table service only rules viably, hence why they have remain closed.’
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• Tons of comment over the weekend in the press, from trade bodies and from operators on just how hard (or otherwise) it is to recruit staff. The Daily Mail says there are vacancies for 100,000 lorry drivers in the UK as EU staff is less available. It adds there are plenty of jobs in meat processing and throws in hospitality for good measure. Fruit pickers and care worker demand will also be high. The Mail says ‘the UK HGV driver shortage has hit catastrophic levels’. Hyperbole, but transport difficulties can feed through to many sectors of the economy quickly. If haulage firms jack wages to source staff, cost increases could be similarly spread. The Caterer says ‘a shortage of delivery drivers has led to two of the UK’s biggest suppliers warning customers including schools that they will be unable to fulfil food orders.’
• Elsewhere, The Telegraph says there is a ‘scramble’ to find the staff needed to cope with ‘another staycation summer’. It says tourist – but not hospitality workers – are flooding to Devon as well as to other UK holiday hotspots. The paper says ‘instead of workers fighting to land the jobs that have survived the pandemic, it is bosses who are competing for the employees. Many have left the area and returned to their families during the pandemic, been poached by online delivery giants or have decided to change roles while on furlough.’
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Other Covid issues:
• A survey undertaken by The Morning Advertiser has found that more than half of respondents were “not at all confident” that restrictions would be lifted on 19 July. A further 26% were only ‘somewhat’ confident with 11% ‘very confident’. Trade bodies are urging the Government to stick to the 19 July date, which ministers have been referring to as a “terminus point”.
• The Furlough scheme is to wind down from the end of this month, i.e. from Thursday morning, after which time the scheme will pay just 70% of wages rather than the earlier 80%. The Telegraph reports that more than 3.4 million people continued to rely on the Government to pay their wages at the end of April 2021, but this will have come down since. At some point, the terms furloughed and unemployed will be so similar as to have no discernible differences.
Company & other news:
• The City Pub Group has updated today saying that ‘trading since the reopening of pubs on 12 April has been encouraging at 90% of 2019 levels for the 42 pubs that have reopened to date.’ Further comment. See premium email.
• Gregg’s has updated positively on trading saying that it is seeing a ‘continued strong recovery in performance.’ Further comment. See premium email.
• Coca-Cola HBC has announced that it has ‘reached an agreement to acquire a 30% equity shareholding in Casa Del Caffè Vergnano…a premium Italian coffee company.’ Further comment. See premium email.
• Sports bar chain Riley’s has retained Christie & Co to help it acquire new sites. The founders of restaurant group Kricket are to open their first bar later this year, Soma, which will be next door to Kricket on Soho’s Denman Street.
• The Sunday Times carries a big story elaborating on earlier news that McDonald’s is to add 20,000 jobs in the UK.
• Oakman Inns has revealed it is introducing further shareholder benefits such as access to the soon to be launched Oakman Wine Club and the Oakman Development Club. The company said the last few months of trading has both been positive and at odds with the national media commentary on the sector.
• The Australian govt will file a formal complaint to the WTO regarding the 218% tariffs imposed by the Chinese govt on Australian wine last year.
HOTELS & LEISURE TRAVEL:
• Some two-thirds of UK adults say they are unlikely to take an overseas holiday this year per Travel Weekly. Only 7% ‘strongly’ believed that they would take an overseas holiday in 2021.
• Grant Shapps has said there is “no guarantee” that all of the countries currently on the green list will remain on it.
• Portugal from today will only allow fully vaccinated British holidaymakers to visit the country quarantine-free. Further comment. See premium email.
• P&O Cruises and Saga resumed cruising yesterday for the first time since March 2020.
• Per Travel Weekly, Jet2holidays and Jet2.com reports a ‘huge surge’ in holiday bookings to the Balearic islands, Malta and Madeira after they were put onto the green list for travel.
• TravelSupermarket reports that Malta jumped from 17th to the fifth most searched spot for a package holiday for the first time after being put on the green list, up 837%. Spokeswoman Emma Coulthurst said ‘it shows an immediate interest in getting away to the new green list destinations’.
• Ryannair and WizzAir have added capacity to green list destinations Malta, Majorca, Ibiza and Madeira. Dara Brady, Ryanair’s marketing and digital director, said ‘we urge the government to immediately add equally safe destinations such as Cyprus, the Canaries and the Greek islands, and also to immediately allow vaccinated UK and EU citizens to travel freely between the UK and the EU without restrictions.’
• Per STR, US hotel demand was at 90% or more of 2019 levels for the week 13-19 June. The demand was heavily skewed toward leisure transient as occupancy in hotels that cater to groups and meetings remained weak at 43%.
• Escape Hunt has updated on trading saying that ‘trading in the five weeks to 20 June 2021 has been encouraging in both the Company’s established sites and in its new sites.’ Further comment. See premium email.
• Panasonic Corp has sold its stake in Tesla for around $3.61bn as the Japanese conglomerate looks to raise cash for growth investment.
• Snap has announced a multiyear deal with Universal Music Group allowing users to clip songs from the UMG catalog to use in their Snaps and on Spotlight.
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 28 Jun 21 Escape Hunt AGM & Q1 update
• 28 Jun 21 City Pub Group AGM & Q1 update
• 30 Jun 21 Constellation Brands Q1
• 8 Jul 21 Fuller’s FY numbers
• 13 Jul 21 Pepsi Q2 numbers
• 21 Jul 21 Loungers FY numbers
• 23 Jul 21 Premier Foods AGM & Q1 update
• 27 Jul 21 Campari H1 numbers
• 27 Jul 21 Games Workshop FY numbers
• 30 Jul 21 DPP AGM
• 3 Aug 21 Domino’s Pizza H1 numbers
• 5 Aug 21 Bank of England MPC meeting
• 10 Aug 21 Intercontinental Hotels H1 numbers
• 12 Aug 21 TUI Q3 numbers
• 18 Aug 21 Carlsberg H1 numbers
• 19 Aug 21 Rank FY numbers
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
• 8 Dec 21 TUI FY numbers
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