Omicron measures, Plan B (& C & D), labour, state aid, Oakman etc.:

A DAY IN THE LIFE:

So, thank-you Covid, you’re ending my London year a bit prematurely for me.

Won’t go into too much detail – other than to say that we’ve got Covid issues very close to home – but have to conclude that the world of buggeration heaped on us by the coronavirus is the gift that just keeps on giving.

We plan, Covid laughs and it’s a bit close to the Big Day for Langton to risk getting a ten-day slap-down, break the rules blatantly or catch the illness itself so London’s hospitality tills will have to ring without much help from us. We could still, however, be persuaded to cause some serious damage up here in Yorkshire.

Anyway, the Mighty Hull are now six without loss.

And the fact that we’re still sixth from bottom, fifth if you exclude early-season implosion Derby, just goes to show how desperate a state we were in a month or so ago.

Next year the Premiership, the year after, Europe. Dreams, huh?

It’s that what keeps you going. On to the news:

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OMICRON – MOVE FAST OR DON’T MOVE AT ALL?

Whilst the first Omicron infections in the UK have moved from the infection stage to hospital admission, statistics are hard to come by. There are opposing arguments as to whether the UK should move swiftly – or perhaps even not at all.

The case for moving quickly:

The Guardian quotes ‘Britain’s top public health officials’ as having ‘advised ministers that “stringent national measures” need to be imposed by 18 December to avoid Covid hospitalisations surpassing last winter’s peak.’ The UK Health and Security Agency is said to have presented the data as early as Tuesday last week.

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The case for staying one’s hand.

The Institute of Economic Affairs says that, in considering Covid restrictions, ‘it is essential to take account of the potential costs, and not just any benefits, in assessing whether the case for new measures adds up.’ It says there will be a direct impact of the individual measures themselves but also ‘there is the broader impact on sentiment.’

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Treading a middle path.

This can be either balanced or muddled. If it’s evidence-based, then that’s one thing. If it’s jerky and involves doing nothing and then moving in a panicky fashion, that’s another. The current approach – nothing, nothing, Plan B and then a massive push to promote booster jabs after arguably being slow to provide them previously – could be open to some criticism as it fails to provide much certainty for business or for customers at an important time of year.

OTHER OMICRON NEWS:

Any further Covid support?

The FT reports that financial support for companies has been ruled out by the government, with one official saying ‘There is already support in place’. Until next March, hospitality, leisure and retail companies can secure business rates relief at 66 per cent, but capped at £2m per business, while commercial tenants are protected against eviction. Businesses are also benefitting from the 12.5% VAT rate until April 2022, when it is due to return to the standard 20% rate.

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Plan C.

Plan C could be deployed to slow the spread of the Omicron variant, stepping up restrictions if it is necessary, including mandatory face masks in hospitality settings and school classrooms, 10-day self-isolation for contacts of confirmed cases of all covid variants and check-ins at venues including pubs and restaurants.

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Plan D.

The Mirror reports that a ‘Covid ‘Plan D’ could shut pubs and restaurants in England.’ It says ‘new measures are reportedly being considered by the Government, according to Whitehall insiders.’ This isn’t policy at the moment. Some projections, based on a two-and-a-half day doubling with no mitigation (which is arguably not entirely realistic), point to one million infections daily by the end of December.

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VAT lobbying:

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Some offices to stay open. The Telegraph reports that ‘PwC, KPMG, JP Morgan and Deutsche Bank are among businesses that do not intend to close their buildings down, despite the PM’s recommendation that staff should work remotely where possible to limit the spread of the omicron Covid variant.’

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The IFS has said that Plan B will hit growth and make tax cuts harder to put in place ahead of the next election.

Late night operators.

The NTIA is calling on member companies, customers and other interested parties to write to their MPs to object to Plan B measures in order to ‘avoid irreversible damage to the night time economy, hospitality, and events industries.’ The House of Commons will vote on the measures, which are likely to pass with Labour assistance, tomorrow.

PUBS & RESTAURANTS:

Scotland:

CEO of the SBPA Emma McClarkin said that Nicola Sturgeon’s recommendation to cancel Christmas parties ‘are now having a devastating impact on Scotland’s pubs and the wider hospitality sector… If we are going to avoid mass redundancies in the sector, we require immediate, meaningful economic support to be announced now.’

UKH Scotland has accused the Scottish government of failing the hospitality industry due to a lack of support measures in its 2022/23 Budget. Executive director Leon Thompson said ‘The extension of business rate relief of 50% from April to June 2022 simply moves the financial pressures a little further down the line’.

Labour shortages:

The Guardian reports that some independent restaurants ‘are being forced to offer hefty sign-on bonuses of £1,000 or more for chefs and other kitchen staff as the shortage of skilled workers tightens in the busy festive season.’ Jobs website Indeed says that only around 1% of hospitality jobs being offered currently mention a sign-on bonus, but it says the number is up 443% since May this year. Putting an alternative view, accountancy firm Moore UK’s latest quarterly survey of businesses found that 33% were planning to make redundancies over the next six months in the absence of the furlough scheme.

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Calls for more help:

The Telegraph is calling on chancellor Rishi Sunak to do more to stimulate the economy. It is calling for an ‘omi-stimulus.’ That isn’t likely to go down too well at a time when inflation is fast becoming a bigger problem than employment and growth.

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COMPANY & OTHER NEWS:

The Times reports that ‘the operator of the Franco Manca and Real Greek restaurant chains is expected to start paying dividends at its full-year results after strong trading.’ It quotes a ‘a source close to the company’ as saying ‘they will make a decision towards the year-end, in March, with an announcement likely to be made as part of a pre-close update in mid-March.’

The New Economics Foundation has said that half of UK families have seen a fall in their disposable incomes over the last two years. It says the poorest half of the population has seen its income fall by £110 whilst the richest 5% are £3,300 a year better off. It says that incomes in London have risen six times faster than those in the north east.

The Oakman Group has updated on trading saying that it ‘continues to make excellent progress on several fronts.’ It adds that ‘for the 21 weeks to Sunday 5th December, the group has delivered sales of just over £26m’ and adds that this is up 16.3% LfL on 2019 and up 34.1% in absolute terms. The company says it ‘does not expect to be negatively impacted by the recently introduced ‘Plan B’ restrictions and is forecasting year-end sales in excess of £64m.’ CEO Dermot King says ‘I am delighted with our progress to date’ and says ‘we have seen our business thrive against the most difficult challenges.’ The CEO adds ‘we are not unduly concerned by the Plan B restrictions.’

Oakman has added nine new sites since the start of the pandemic. It says ‘further new sites will open in 2022’ and says it plans to have 70 sites open by June 2026. Chairman Peter Borg-Neal says ‘we have by far the best pipeline we have ever had and are looking forward to the future with great confidence.’ The company is raising additional funds and says its shares will be available to the general public – in particular, to customers of the group. CIO Steve Kenee says ‘as well as buying the shares as an investment, subscribers to the issue will also be able to access discounts of up to 50% off food, generous deals on hotel bookings and enjoy privileges such as invitations to new openings and major sporting events.’

McDonald’s has opened the UK’s first Net Zero Carbon restaurant, located in Market Drayton. The restaurant will act as a testing site for a number of industry-first innovations and will be powered entirely by on-site solar panels and wind turbines.

Revolution Bars Group is to remove all passionfruit garnishes from a number of its cocktails. It says this is a part of its ongoing commitment to sustainability. The group sells 1.2 million cocktails including passionfruit a year. CEO Rob Pitcher says ‘we have set ourselves some tough targets, with our guiding goal to be Net Zero business before 2030.’

HelloFresh SE intends to double its investment in capacity. Co-founder and CEO Dominik Richter says he is ‘very excited about our decision to make further investments into our production capabilities, which will not only facilitate further growth, but allow us to offer our customers an ever improving experience.’

Stint Advisory Board has appointed Ann Elliot, a connector and advisor, to lend her expertise to support the continued growth of the company, founded in 2018 by brothers Sol and Sam Schlagman.

Whilst we await industry wide data, anecdotal evidence points to cancellations. The Morning Advertiser reports that Omicron fears have led to a 35% fall in bookings at Lancashire-based gastropub the Parker’s Arms.

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MCA reports that Döner Shack plans to increase the rate of its UK expansion, to 15 sites in 2022.

LEISURE TRAVEL & HOTELS:

UKinbound and travel business leaders have written to the prime minister asking for emergency financial support amid the Omicron travel restrictions. It highlighted how businesses were struggling pre-Omicron and now the re-introduction of pre-departure testing, day-two PCR testing and the need to isolate pre-results, is causing mass cancellations.

As with pubs & hotels, it has been hard to pin down cancellations due to Omicron. These have likely been significant and industry-wide data will be available in due course. In the meantime, Heathrow reports that a ‘high level’ of business travellers worried about new COVID testing rules have been cancelling flights. The airport was used by just under 3.1 million passengers in November, four times the total for the same month last year but 60% down from 2019.

Heathrow forecasts 45 million passengers to be travelling in 2022. For 2021, the report anticipates traffic to be 20 million, down 1.5 million on the company’s June forecast and down 75% compared to 2019.

easyHotel has opened a 180-room hotel in Summertown, Oxford, after being delayed by multiple lockdowns.

OTHER LEISURE:

Sir Paul McCartney is reported to be among a group of investors backing a £7.2 million funding round for music start-up Audoo.

FINANCE & MARKETS:

US inflation hit 6.8% in the year to November, up from 6.2% in October. Though the rate is in line with forecasts, it is the highest in nearly 40yrs. Notwithstanding the appearance of the Omicron variant, the pace of price increases is likely to add further pressure to the Fed to cut back on QE and, ultimately, to increase interest rates. Core inflation, which strips out food and energy price changes, has hit 4.9%, its highest level in 30 years.

UK growth came in below expectations in October at just 0.1%. Economists had been looking for 0.4% in the month.

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The UK’s trade balance with the rest of the world worsened in the three months to October with the trade deficit hitting £6.2bn in the quarter and the services surplus increasing to £1.6bn. The total deficit including services but excluding precious metals, was £5.2bn.

Sterling stronger at $1.3250 and €1.1726. Oil price higher at $76.17. UK 10yr gilt yield down 2bps at 0.74%. World markets heading better on Friday and London set to open up by around 16pts as at 7am.

RETAIL WITH NICK BUBB:

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