Langton Capital – 2021-09-21 – Compass Group, holiday bookings, delivery, WFH, dark kitchens etc.: (copy)
Compass Group, holiday bookings, delivery, WFH, dark kitchens etc.:
A DAY IN THE LIFE:
So, who says you can’t teach an old dog new tricks?
We’ve been telling our dog off for hammering with his muddy paws on the back door when he wants to come back in for several years now and it seems to have finally sunk in.
Because he’s changed his behaviour and now barks, one single, but very loud bark every four or five seconds or so, until you let him in which, it has to be said, is much more irritating but, from his point of view, he’s killed two birds with one stone.
He’s avoided a telling off – at least in the short term – and he uses much less energy because, as he has proven on a number of occasions, he can keep his barking up for hours – and certainly until the adverts in whichever programme you are watching, without much effort.
And now, if I tell him off, he’ll just look confused and hurt. Hang-dog, in fact so I thought I might write him a letter. He won’t make much of it, of course, that is unless I give him a hint and staple it to his ear.
Anyway, wonderful weather out there for the autumn equinox. On to the news:
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PUBS & RESTAURANTS:
Trading. Lloyds Bank’s latest Recovery Tracker has reported that the number of UK sectors reporting output growth fell to a six-month low in August. The sectors were hit by the impact of labour shortages. Some nine of the 14 UK sectors monitored by the bank’s tracker saw output rose in August, down from 12 in July.
The FT reports boss of UK restaurant group Azzurri, Steve Holmes, as saying that taxes on business premises are making it harder for high street chains to compete on staff wages at a time of acute labour shortages.
Delivery. A growth area but there’s a lot of capital and capacity gone into the market. It could be that profitability is elusive.
Working from home. The Telegraph reports research from office provider IWG as suggesting that one in three workers would not take a job that required them to be in the office full time.
Light kitchens could become a ‘thing’. The idea here being that this is a delivery operation attached to a bricks and mortar restaurant. Fulham Shore’s David Page and foodservice analyst Peter Backman have both commented on the phenomenon.
Some districts in the US are now requiring proof of vaccination or a negative Covid-19 test before customers are allowed to enter indoor establishments including restaurants. The US is a federation of states with different laws but such a precedent could at least be the focus of some attention this side of the pond.
Supply issues. As if we didn’t have enough problems delivering food and drink post Brexit, the BBC reports that pig farmers may have to stop sending their animals to slaughterhouses as the latter are running short of the CO2 used to stun them prior to their being killed.
Foodservice Analyst Peter Backman suggests lunchtime is the daypart which is facing the biggest threat from changing consumer patterns. Backman said ‘lunchtime eating in places where workers are to be found in offices is under threat – whether it’s a coffee shop, sandwich bar, lunchtime rendezvous, office cafeteria – all will be depleted in the months and years ahead.’
Morrisons has partnered with StarStock to deliver food directly to pubs, restaurants and hotels.
The MCA reports that the Azzuri group is raising the issue of ‘outdated’ business rates, saying it is impacting operators’ ability to compete on wages.
The Morning Advertiser reports that pubs could be facing a CO2 shortage that could cause disruption across the food and drink sector.
Small independent brewers may face disruption from the CO2 shortage, according to SIBA. James Calder, SIBA CEO, said ‘The vast majority of small breweries produce fresh cask beer – and for those brewers this latest shortage of CO2 won’t have an immediate impact – but for the increasing number making keg, bottled or canned beer it will come as an additional worry.’
Brewers claim the simplified travel rules for visitors to England could help boost pub trade. James Calder, SIBA CEO, said ‘Tourists travelling to England have a visit to a traditional English pub at the top of their ‘must visit’ lists, so it is welcome to see Covid travel restrictions for fully vaccinated visitors set to be simplified.’
Wales First Minister Mark Drakeford has announced that people in Wales will have to show an NHS Covid Pass to enter nightclubs and attend large events from next month.
Company & other news: Compass Group has updated on full year trading to its September year end saying that it has seen a ‘strong close to the year’ and has seen ‘continued progress in revenue and margin.’ The group says ‘with 10 days of operations to go, the Group’s revenue performance in the fourth quarter is expected to improve to c.86% of 2019 revenues, slightly ahead of our guidance of 80-85%. For the full year 2021, our revenues are expected to be c.76% of 2019.’
In the US, DoorDash is expanding its alcohol delivery program across 20 states and Washington, D.C. with customers able to place orders for beer, wine, and spirits. Caitlin Macnamara, director of alcohol strategy and operations at DoorDash said ‘Over the past year, many cities where we operate evolved their legislation in order to permit the delivery of alcohol to residents’ homes’.
HOTELS & LEISURE TRAVEL NEWS:
Tour operators report sharp rise in holiday bookings on the back of traffic light changes & the planned abolition of the ‘amber’ list.
Jet2 is restarting flights and holidays to Antalya and Dalaman in Turkey from Thursday, following a surge in bookings for overseas holidays within hours of Friday’s announcement that travel restrictions will be lifted.
The US is ending 18-month ban on UK and EU passengers, with restrictions being lifted from November.
From the Destination Analyst in the US, more Americans are now marketable for travel, with the percent of Americans highly open to travel inspiration growing to 65.0% from 58.4% in the last two weeks.
Parents are being warned of toy shortages and price rises ahead of Christmas.
Legoland is offering 2-4-1 entry vouchers on vouchercodes.co.uk.
FINANCE & MARKETS:
The global economic recovery has slowed, reports accountant Deloitte. It says ‘following the sustained economic growth seen in spring and early summer, some slowdown was inevitable and necessary, given that no economy could sustain the sort of bounce-back rates of growth seen in 2021.’ It says, however, that ‘the slowdown has come rather faster than expected.’
The Telegraph reports higher numbers of property sellers than buyers.
Sterling weaker at $1.367 and €1.1651. Oil price lower at $74.58 and UK 10yr gilt yield down 5bps at 0.79%. World markets lower yesterday but London set to open up by around 32 points as at 7am.
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TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 15 Sept 21 Restaurant Group H1 numbers
• 16 Sept 21 C&C H1 trading update
• 16 Sept 21 Games Workshop trading update
• 16 Sept 21 ONS real time indicators
• 21 Sept 21 Compass Group full year update
• 21 Sept 21 TUI Group FY trading update
• 22 Sept 21 Ten Entertainment H1 numbers
• 22 Sept 21 SAGA H1 numbers
• 23 Sept 21 Mitchells & Butlers FY update
• 23 Sept 21 City Pub Group H1 numbers
• 23 Sept 21 Fuller’s H1 AGM & trading update
• 23 Sept 21 Playtech H1 numbers
• 23 Sept 21 ONS real time indicators
• 23 Sept 21 Bank of England MPC meeting
• 24 Sept 21 GfK UK Consumer Confidence numbers
• 28 Sept 21 Escape Hunt H1 numbers
• 29 Sept 21 Fulham Shore AGM
• 30 Sept 21 New River investor day
• 1 Oct 21 JW Wetherspoon
• 4 Oct 21 Rank Group AGM
• 5 Oct 21 Gregg’s Q3 update
• 6 Oct 21 Constellation Brands Q2 numbers
• 8 Oct 21 Hollywood Bowl FY update
• 13 Oct 21 Marston’s FY trading update
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 25 Oct 21 DP Poland H1 numbers
• 27 Oct 21 Chancellor’s Autumn Budget
• 26 Oct 21 Campari Q3 numbers
• 28 Oct 21 C&C H1 numbers
• 28 Oct 21 YUM Brands Q3 numbers
• 4 Nov 21 Bank of England MPC meeting
• 16 Nov 21 Premier Foods H1 numbers
• 18 Nov 21 Jet2 H1 numbers
• 23 Nov 21 Compass Group FY numbers
• 24 Nov 21 Britvic FY numbers
• 30 Nov 21 Marston’s FY numbers
• 6 Dec 21 AB InBev investor seminar
• 8 Dec 21 TUI FY numbers
• 16 Dec 21 Bank of England MPC meeting
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