Gym Group, NHS app & staff shortages, inflation, Jet2 & other:

A DAY IN THE LIFE:

Cats give the impression of being intelligent in a way that dogs, in all honesty, do not because, though a cat can be aloof, picky, arrogant and dismissive, you can rely on a dog to be, well, a dog.

But various tests have suggested that, at the end of the day, cats are irredeemably thick. What passes as intelligence is a form of laziness as, rather than try (or indeed be able to) figure things out, they let 4m years of evolution make all of their decisions for them.

And having ten kittens, three times a year builds in a lot of slack meaning that mistakes, like climbing up a tree and not being able to get down again, though potentially fatal at the micro level, don’t present a possible extinction event in the way that forgetting to eat for a month most certainly would.

Not sure where we’re going with this so, at this point, it’s best to day have a great weekend and good luck to England on Saturday. On to the news:

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PUBS & RESTAURANTS:

Trading:

• Data from OrderPay shows that football fans have given pubs a total sales growth of 166% since the beginning of the Euros. During the England v Germany match drink sales at pubs increased 176% with the average spend at £21.70 per customer.

• Fullers’ boss Simon Emeny tweeted about bottlenecked capacity at venues due to ongoing coronavirus restrictions, saying ‘Great quote from a GM of one of lovely West End pubs: ‘I have a full pub for the game, I’ve got 26 booked in’’. One can only imagine that normal capacity, vertical and drinking, would be several multiples of that figure.

• Mims Davies, minister for employment, held a virtual roundtable with 25 hospitality sector employers discussing  the Kickstart Scheme and wider Government efforts to support hiring in the industry. Davies also spoke about a partnership with UKHospitality to better promote jobs in the sector via a nationwide network of Jobcentres, the DWP’s Sector-Based Work Academy Programme, and the government’s expanded apprenticeship and traineeship offers.

• The British Beer & Pub Association has said that pubs are set to lose over £5 million in sales during the quarter-final UEFA EURO 2020 knockout match against Ukraine, because of the impact of restrictions which will mean over 1.5 million fewer pints will be sold during the match than if there were no restrictions. It says ‘recovery remains in the balance for the beer and pub sector with many pubs across the country having to close or significantly reduce their opening hours due to staffing issues, caused by staff shortages and NHS Test & Trace ‘pings’ resulting in pub staff having to isolate, despite testing negative for Coronavirus on lateral flow tests.’ CEO Emma McClarkin, adds ‘restrictions on pubs are continuing to bite and because of this any boost pubs had hoped for from the Euros has been greatly weakened.’

Unintended (but foreseeable) consequences:

• Per the MA, pubs are being forced to close as the NHS Test and Trace app will tell a whole shift of workers to self-isolate after one team member reports a positive test. UK Hospitality has called on the Government to change rules to introduce a ‘test and release’ system similar to that for international travel.

• The BBC has picked up on the point quoting a number of operators that have had to shut or scale back their operations. It says it ‘only takes one case [of Covid-19} on site, and the NHS Test and Trace alerts come thick and fast, instructing staff to isolate. Without them, venues can’t open.’ Ian Payne, chairman of the nationwide Stonegate group of pubs, wrote on social media that the chain has around 1,000 people off, because they had been alerted by NHS Test and Trace, and 15 sites closed, because the management team were self-isolating.

• UKH says it has ‘called for the Government to immediately review and amend its test and trace guidelines on self-isolation, which are proving massively disruptive for hospitality businesses across the UK and leading to venue closures and reduced operating hours.’ It says ‘the current system forces already struggling hospitality businesses to shut their doors, and can result in whole teams needing to self-isolate. The trade body also warned of the damage that any similar approach would wreak on wider society, triggering mass isolations.’ CEO Kate Nicholls says ‘for some weeks we have been telling Government about the severe staff shortages at venues, compounded massively by the absence of staff members who have been told to isolate despite not having shared shifts with colleagues who tested positive.’

• UKH says ‘if the system remains as it is, there’s a threat of mass isolations, which would hugely damage trade, putting many companies at risk of failure.’ The BBPA says the ‘NHS Test & Trace is becoming a huge issue for our pubs. Already pubs are closing or greatly reducing their opening hours due to staff shortages caused by app pings – despite staff testing negative on lateral flow tests.’ It adds ‘reports that anyone with both jabs will not have to isolate from a NHS Test & Trace ping so long as they test negative on a lateral flow test will not work for our sector. 43% of pubs staff are aged 18 – 25, meaning they are at the back of the queue for vaccines and will not have their second jab for months. We urge the Government to work with us to find a sensible solution to this that still ensures staff and customer safety.’

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The outlook for 19 July:

• Public Health Scotland has said that nearly 2,000 Covid cases in Scotland have been linked to people watching Euro 2020 football matches at either Wembley or at fan-zones in Glasgow or at Hampden. Some 1,300 of the fans who travelled to watch Scotland’s 0-0 draw with England tested positive for Covid. National clinical director, Prof Jason Leitch, concedes that ‘some of them may have taken it to London with them, some of them may have got it when they came home.’

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• The NIESR has commented on the R rate saying ‘the advancing pattern is consistent with a race between, on the one hand, local surges that spill over geographically due to higher transmissibility of the now dominant Delta variant, and on the other, the vaccination programme that reduces the susceptible pool.’

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Working from home.

• Apple has told employees in June that they would be asked to work from the office on Mondays, Tuesdays and Thursdays from early September, refusing to give in to a backlash from employees. A joint letter was sent by a considerable group of employees saying ‘Many of us feel we have to choose between either a combination of our families, our wellbeing and being empowered to do our best work, or being a part of Apple’.

Inflation:

• Andrew Bailey, Bank of England governor, has said people should has warned against an over-reaction to rising inflation. Bailey says rising inflation is expected to be a “temporary feature” of the UK economy’s “bounce-back” from Covid. This comes a day after former colleague and chief economist at the Bank, Andy Haldane, said that inflation could hit 4% and was on the verge of becoming a big deal. Bailey, who remains at the Bank, says it’s ‘important not to over-react to temporarily strong growth and inflation, to ensure that the recovery is not undermined by a premature tightening in monetary conditions.’ Haldane had recently been the ‘1’ in the 8:1 vote not to raise interest rates.

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Company & other news:

• Coca-Cola claims a ‘significant milestone’ as it moves to 100% recycled plastic across its entire on-the-go range in Great Britain. Coca-Cola said it was now saving nearly 29,000 tonnes of virgin plastic every year.

• Krispy Kreme cut its IPO price to $17 ahead of first dealings yesterday but slightly increased the number of shares it was to sell. JAB Holdings will still hold about 78% of the Krispy Kreme shares after the offering. The initial range for the IPO had been $21 to $24. The shares closed their first day’s trade at $21.

• Phone and mobile device charging solution company Joos is teaming up with OTC to take their product to hospitality operators. The company says ‘coming together with OTC is just the beginning, as we look to scale into the hospitality sector. No doubt their knowledge and unparalleled industry expertise will assist us as we deliver our solution to the sector, at a time when mobile phones are critical to experience and spend.’ Joos points out that, with customers ordering from table, if they are unable to charge their devices, business may be lost.

• The BBC reports that the lorry driver shortage is getting real. It says that ‘German confectionery giant Haribo has said it is struggling to deliver its sweets to shops in the UK’. It says it is “experiencing challenges.”

• IWSR Drinks Market Analysis reports sales of alcohol in Asia Pacific are expected to gain over +2% in volume and over +4% in value by the end of 2021. The drinks analyst forecasts that long-term volume recovery in the Asia Pacific region will return to pre-Covid levels by 2025.

HOTELS & LEISURE TRAVEL:

The battle to save our summer.

• The UK travel industry and consumers face another ‘lost summer’ unless European leaders take a coordinated approach to allow double-jabbed holidaymakers to travel, according to the World Travel & Tourism Council. The WTTC has already warned the UK government it faces a £19.8 million loss to the country if international travel is not possible during July, and fears August will suffer the same fate.

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• Boris Johnson has said being fully vaccinated will be ‘a liberator’ for people who want to travel abroad this summer. Johnson also said that ‘extra precautions’ may be necessary to protect against COVID after 19 July and that travelling would not be ‘completely hassle-free’. 

• Jet2.com and Jet2holidays have suspended flights and holidays to all amber list destinations up to and including July 18. A statement said ‘We welcome recent news reports about vaccinated people being able to travel to amber list destinations without having to quarantine and we look forward to further updates’. The company expects the next UK government review of the traffic light status of overseas destinations to be on or around July 15.

• On the other hand, the company is resuming flights to four destinations – Majorca, Menorca, Ibiza and Madeira – following their upgrade to green light status. Steve Heapy, CEO of Jet2, said ‘we have been filling those flights up thanks to a surge in bookings for flights and holidays in July and August.’

• EasyJet Holidays has also recommenced a programme to Majorca for the first time in more than a year. The company says ‘we’re so pleased to see the Balearics on the ’green’ list and we’ve had a brilliant response from customers who have travelled here today and those who have booked to travel in the coming weeks.’

• All passengers arriving in Tunisia will have to show proof of a negative PCR test, regardless of their vaccination status.

• Staycity will next month open a unit in Manchester’s historic Northern Quarter.

• The Trump Organization and its financial chief have pleaded not guilty to criminal charges.

• STR reports that U.S. weekly hotel occupancy hit its highest level since late October 2019 in the week to 26 June. Occupancy was 69.9% (down 7.3% on 2019) with rates around level on two years ago at US$133.36. Revpar was some 8% down on 2019.

Other covid news:

• EasyJet has agreed a deal with high street pharmacy Boots to offer a range of Covid-19 tests at Boots’ testing hubs. In-store PCR tests cost £85 with results provided the next day, while an at home “self-swab” PCR test is priced at £65 from 500 stores or online with results given within 24-48 hours.

GYM GROUP SHARE PLACING & TRADING UPDATE:

• The Gym Group has announced that, following its placing announcement last night, it has placed a total of 11,350,000 new ordinary shares of 0.01p each at a price of 275 pence per Placing Share. It says this will raise gross proceeds of approximately £31.2 million. The Placing Price represents a discount of 3.5 per cent to the closing share price of 285 pence on 1 July 2021 and the Placing Shares being issued represent approximately 6.8 per cent of the existing issued ordinary share capital of the Company prior to the Placing. CEO Richard Darwin says ‘our new gym pipeline is the strongest it has ever been and we thank shareholders for their support in today’s successful placing which allows the Company to accelerate its rollout to 40 new sites over the next 18 months. Gyms have an essential role to play in the nation’s physical and mental health and growing our portfolio will widen
access to affordable fitness for more communities across the UK.’

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FINANCE & MARKETS:

• Markit has reported its UK Manufacturing PMI for the month of June saying that, at 63.9, it had dipped slightly from the record 65.6 seen in May, but still showed that the sector was in strong growth. Markit says ‘UK manufacturing maintained a near survey-record pace of expansion at the end of the second quarter, as the reopening of economies at home and overseas supported increased production, new orders and employment.’ Markit says ‘solid business confidence and rising backlogs of work also suggest that the current upturn has further to run.’

• Inflationary pressures. Markit says that the UK Manufacturing Sector is ‘still beset by rising cost inflationary pressures, however, as Brexit-related trade issues exacerbated global supply chain delays. The resulting widespread raw material shortages drove purchase prices up to the greatest extent on record, leading to an unprecedented steep rise in selling prices. There are also widespread reports of supply issues causing disruptions to production schedules and impeding the re-building of buffer stocks.’ It says ‘the continued inflationary impact of capacity issues at both manufacturers and their suppliers will be a further factor keeping headline inflation above the Bank of England’s 2% target in coming months.’

• Sterling weaker at $1.3769 and €1.1624. Oil price up at $75.70. UK 10yr gilt yield up 1bp at 0.73%. World markets broadly better yesterday and London set to open up around 16pts.

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