Deliveroo, Tortilla, Pret Index, Barclaycard, inflation, jobs, footfall etc.:

A DAY IN THE LIFE:

Bit rushed today, on to the news:

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DELIVEROO – Q1 TRADING UPDATE:

Deliveroo has this morning reported on Q1 trading and our comments thereon are set out below:

Headline numbers:

• The company reports ‘solid growth in Q1 2022, with gross transaction value (GTV) up 12% year-on-year in constant currency and orders up 18%.’

• It says this is ‘a strong performance against a Q1 2021 comparison base that included lockdown restrictions in many markets.’

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PUBS & RESTAURANTS:

General trading comments:

Footfall:

Springboard reports that ‘footfall across UK retail destinations was muted last week in what was the end of the spring term for many schools across the UK, a week ahead of the Easter bank holiday weekend.’ It adds ‘the weather will not have helped, with rain on most days last week, across much of the UK. This inevitably led to a stronger performance in shopping centres than high streets as they offer protection from the elements, whilst on Saturday when the weather was dry and sunny across most of the UK the reverse was true.’

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The BRC agrees that sales in shops have slowed in the face of the cost of living crisis. The BRC says that retail sales growth slowed materially in March compared with the growth shown in February. Its numbers suggest that total sales rose by 3.1% in March against the same month a year earlier, down on the 6.7% increase in February and 12-month average growth rate of 10.3%. Barclaycard takes a different view.

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Food price inflation:

The latest Foodservice Price Index from CGA and Prestige Purchasing reveals that year-on-year inflation in the foodservice sector hit 10.2% in February 2022. It says ‘the double-digit increase was fuelled by challenges including a surge in demand, the lingering impacts of COVID, additional costs of trade after Brexit and surges in energy and packing prices. Inflation has been further heightened by the comparisons with February 2021, when Britain’s lockdown temporarily eased the pressure on prices.’

Lumina view:

Lumina Intelligence reports that consumer spending in the eating and drinking out market fell by 9% to £10.73 during the 12 weeks to 20 March 2022. The lunch occasion took the biggest hit, with average spend down 10%.

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Cost of living squeeze:

Money-saving expert Martin Lewis has said consumers are beginning to really feel the squeeze. He says ‘we need to keep people fed. We need to keep them warm.’ He says ‘I get all these messages from people tearing their hair out. They don’t know how to make things add up.’ Writing earlier this month, accountants PwC said that households will be £900 worse off this year in a “historic fall” in living standards.

Growth in hospitality:

ONS figures show that the accommodation and food services sector activities grew by 8.6% in February 2022 and was the main contributor to the service industry’s growth in that month. As the whole economy only grew by 0.1% in the month, much of the rest of it must have moved backwards.

UKH reports that ‘the hospitality industry can lead the way in helping disabled people to flourish. CEO Kate Nicholls says ‘we want to see more hospitality businesses implementing practices to allow disabled people to flourish in our sector, drawing on their personal qualities and skills.’

COMPANY NEWS:

Bloomberg updates its Pret Index saying that sales are lagging in New York, where they have ‘stubbornly lagged the recovery observed in London’s financial districts, where Pret’s performance has been gradually climbing back to normal in recent months.’ It says in London there was ‘an expected downturn last week as residents began leaving London ahead of the Easter holiday.’

Bloomberg says ‘although some of Wall Street’s leading firms had initially called out working-from-home as incompatible with their culture–most notably Goldman Sachs’s David Solomon describing it as an “aberration”–some are now being more accommodating of so-called hybrid weeks spent partly at the office and partly at home.’

It adds ‘in the U.K., Pret’s new strategy to deal with the upheaval has been to chase growth outside of office-centric clusters. It says sales at London Airports are up 15pps week on week to 120% of pre-Covid levels. London West End is down 5pps at 97% and London City is down 5pps at 81%.

Pret A Manger has secured a new agreement with existing franchise partner Carebrook Partnership to open 20 shops in the Republic of Ireland and Northern Ireland.

Waitrose will expand its grocery delivery partnership with Deliveroo by adding more than 70 new Waitrose locations to the service by this summer.

The Local Data Company has acquired Edge Analytics, a data science business specialising in demographic data analysis.

Zetland Capital has secured a £40m loan from Oaknorth to acquire and expand pub portfolio operated by Portobello Starboard. The portfolio is ‘made up of 17 high quality freehold pubs located across London villages / suburbs and the South coast and operated by Portobello Starboard.’

Stonegate reports that Melissa Wisdom has been internally promoted from Operations Director to Sales and Marketing Director. It reports that James Metcalfe joins the Marketing team as Director of Marketing – Insight and Innovation.

HOLIDAYS & LEISURE TRAVEL:

Heathrow Airport saw 4.2m passengers in March – representing almost an eight-fold increase on the total during the same month in 2021 and its busiest month since the start of the coronavirus pandemic.

Low staffing levels have caused Heathrow to admit that it is ‘stretched’ with the airport rushing to hire some 12,000 workers to cope with rising demand for international travel ahead of the summer.

The Telegraph reports that Easter travel chaos will cost airlines £100m as some 1,200 flights have already been cancelled, with a similar number still expected to be cancelled in the next week. The Telegraph says ‘Bosses have attacked Whitehall bureaucracy which they say is at the heart of the staff shortages.’

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The RAC predicts that the Easter weekend could be the busiest on the UK’s roads in at least eight years as engineering works look set to disrupt rail travel. An estimated 21.5 million leisure trips will be made by car between Good Friday and Easter Monday.

OTHER LEISURE:

Elon Musk’s comment that he will not join the board at Twitter has led to speculation that he might bid for the company.

Chinese-owned TikTok should achieve global advertising revenues of $11.6 billion this year reports Insider Intelligence. This would make it larger that Twitter and Snap combined.

The Guardian reports that video game developers are set to see an influx of money as big tech companies compete to assemble a ‘Netflix for games’. Companies such as Apple, Amazon and Netflix are keen to take on the big incumbents of the industry – Microsoft and Sony. 

Tencent has said it will shutter its game streaming platform Penguin Esports by June due to ‘changes in business strategies.’ Penguin Esports never achieved a substantial market share in China, but Tencent already owns the country’s two largest game streaming platforms, Douyu and Huya, via previous acquisitions.

The proposed government sale of Channel 4 looks set to meet opposition, if not in the Commons, then in the Lords. Tory peer Sir Peter Bottomley says he opposes the sale “because I am a Conservative”. He says ‘the House of Lords will take out any clause that privatises Channel 4.’

FINANCE & MARKETS:

The ONS updates on unemployment this morning saying that ‘December 2021 to February 2022 estimates show a decrease in the unemployment rate, while the employment rate was largely unchanged.’ It says the employment rate was 75.5% and the UK unemployment rate was estimated at 3.8%, 0.2 percentage points lower than the previous three-month period, and 0.1 percentage points below pre-coronavirus pandemic levels.

The ONS also updates on wages saying that, in the quarter to end-Feb, ‘growth in average total pay (including bonuses) was 5.4% and growth in regular pay (excluding bonuses) was 4.0% in December 2021 to February 2022.’

It says ‘in real terms (adjusted for inflation), growth in total pay was 0.4% and regular pay fell on the year at negative 1.0%; strong bonus payments over the past six months have kept recent real total pay growth positive.’

UHY Hacker Young has said that additional red tape and a lack of government support means that a third of companies that were exporting to the EU pre-Brexit have stopped doing so.

The BCC says that ‘EU exports were 0.3% lower in February 2022 than in December 2021. More firms are affected by higher export and import paperwork compliance burdens than a year ago. Overall goods exports in the three months to February 2022 were 1.2% lower than in the three months to February 2018.’

Environment secretary George Eustice has said it is not realistic to pull lorries with perishable goods out of the queues to get into Dover. Hauliers have warned that some lorries are taking 24hrs to board.

Mortgage lenders may begin taking into account the cost of living crisis when working out how much they will lend. This could put some downward pressure on the ability to buy and, ultimately, on prices.

Sterling slightly higher at $1.3024 and €1.1968. Oil price down a little at $100.37. UK 10yr gilt yield 9bps higher at 1.85%. World markets weaker yesterday & London set to open down around 49pts as at 6.30am.

RETAIL WITH NICK BUBB:

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