Restaurant Group, SSP, On the Beach, Tortilla, footfall & other:

A DAY IN THE LIFE:

I may be misremembering here but I think I can recall Frank Skinner once making a comment along the lines that he had so many pencils that he was sure now beyond any reasonable doubt that he would be outlived by them.

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Anyway, that’s a bit of a morbid topic to pick up on when the sun’s shining. So, let’s move on to the news:

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PUBS & RESTAURANTS:

Footfall:

Springboard has updated on footfall saying that, in the week to 21 May, footfall was up by 22.3% on the same week in 2021 but down by 15.1% on the same week in 2019. Footfall was down by 0.2% week-on-week.

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Obesity:

Foodservice analyst Peter Backman comments on the World Health Organisation’s 220 page report on obesity & asks whether delivery could be partly behind rising obesity numbers in the UK. He says that the authors of the report ‘do not establish restaurant delivery as a cause of excess weight.’

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Working from home:

This may be getting baked in. Sky News reports the ONS as saying more than 80% who worked from home in the pandemic say they will do hybrid working in future. Some 78% of those who worked from home to some extent said that their work-life balance was improved, while 53% cited fewer distractions, 52% said they completed their work more quickly, and 47% said their overall wellbeing was better.

Food prices:

The Ukraine war could lead to further ‘huge food price hikes’ according to Ian Wright, the head of a government advisory body. Russia’s blockade of Ukraine’s wheat export, paired with shortages of fertiliser and animal feed threatens famine in the poorest countries.

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The Wealth Effect:

The Independent asks if rising interest rates will lead to a property market crash. Ultra-low interest rates have made mortgage borrowing cheaper, inflating a housing bubble. The other side to this is that if prices were to crash, the Wealth Effect would likely take hold, incentivising people to spend less and delay major purchases.

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Inflation:

Governor of the Bank of England Andrew Bailey has said that he was not asleep at the wheel while inflation soared. He says that it was not the fault of the Bank, saying in addition that high energy prices would do much of the work to depress consumer spending. This may mean that interest rates need not rise as far as previously believed.

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Other news:

IMF CEO Kristalina Georgieva warns that  the global economy is confronting its biggest test since the Second World War ahead of the World Economic Forum in Davos. Georgia said that the misery will deepen if the world divides into distinct geopolitical blocks in light of Russia’s invasion of Ukraine.

Homelessness charity Only A Pavement Away announces a partnership with  IT Asset Disposal Company, DSA Connect (DSAC) and are calling on businesses to donate their redundant IT equipment.

Sent separately 24 May 2022:

RESTAURANT GROUP AGM UPDATE:

The Restaurant Group has updated on trading for Q1 saying that it has seen ‘continued strong trading performance across the Group YTD.’

• Key takeaways. Progress but slowing recovery (except in concessions). Cost pressure more acute than previously reported.

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COMPANY NEWS:

SSP has reported H1 numbers to end-March saying that revenue was £803.2m (2021: £256.7m) and underlying EBITDA was £14.7m (vs an underlying EBITDA loss las year of £110.3m).

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Tortilla reports it is ‘the largest and most successful fast-casual Mexican restaurant group in the UK’ and says it ‘is delighted to announce the acquisition of Chilango Limited…for a total consideration of up to £2.75 million from investment firm RDCP Group Ltd. Chilango ‘operates from an estate of eight premium location UK sites, which offer both eat-in and take away options, as well as through its delivery channel supported by delivery kitchens.’

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The Drinks Business reports on premiumisation, saying that, despite consumer confidence falling and inflation rising, groups such as Fevertree and Diageo are reporting that consumer seem to be trading up.

Starbucks Corp is exiting Russia after 15 years. It will wind down operations having suspended them in March. The units in Russia are owned and operated by the Kuwait-based Alshaya Group, which is referring questions to Starbucks.

Restaurant Group’s pubs arm, Brunning & Price, is to open a new pub, The Architect, in the former Garfunkel’s site in the Bath, which has been empty for a number of years.

Property company Shaftesbury reports H1 numbers

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HOLIDAYS & LEISURE TRAVEL:

On the Beach has reported H1 numbers to end-March saying that revenue rose to £52.9m from £12.0m last year. Revenue in FY19 was £63.5m. The group has reported a loss before tax of £7.om compared with a loss last year of £9.5m. The group is reporting adjusted earnings of 0.1p compared with a loss of 5p per share last year.

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Travel Weekly reports that ‘a proposed online sales tax needs clarification from government as it could have major ramifications for the travel industry already threatened by the cost of living crisis.’ Accountant RSM says that the proposed tax could impact online travel agents and some tour operators.

Airbnb is shutting its domestic rentals in China that targets domestic customers due to lockdowns. It says that stays in China were only 1% of its global revenues.

RMT’s general secretary Mick Lynch has called om members operating Tube services to strike over job cuts. He has announced a ban on overtime working from 3 June to 10 July. In the past, such action has had a negative impact on trade for London hospitality businesses.

The Times reports that a combination of poor morale and dated IT systems at the Passport Office could lead to the backlog of 500k applications increasing. Passport Office staff also accused Teleperformance, which has a five-year £22.8 million contract to run the passport advice line, of giving customers ‘poor, misleading advice’ and exacerbating public anger.

Travel Weekly reports that Norwegian Cruise Line Holdings CEO Frank Del Rio warns rival cruise lines about the dangers of discounting and urges agents to sell its voyages at their high price point.

OTHER LEISURE:

Per Sky, Elon Musk wants a 25% discount to his initial Twitter bid after clashing with the CEO about how the bot count is established for the social media site. The billionaire claims to be spending less than 5% of his time on the takeover.

FINANCE & MARKETS:

NatWest chairman Sir Howard Davies has told the Observer that Brexit is ‘a significant mistake’ that could cost the UK dear.

The Centre for Policy Studies claims that the UK is becoming a less attractive place to invest and risks falling behind France unless the Government becomes more business-friendly. The UK’s international standing is reportedly slipping as a result of red tape, rising taxes and ministerial complacency.

FORTHCOMING NEWS:

On the Beach H1 numbers this morning along with the same from West End landlord, Shaftesbury. Whitbread is hosting a teach-in later today and we have FY numbers from pork giant Cranswick.

On Wednesday, Hollywood Bowl reports H1 numbers and on Thursday, we hear from Ted Baker and Wickes hosts its AGM. DP Eurasia will update on its first 4mths’ trading. AG Barr’s AGM is Friday. See also Trading Statements on the right.

RETAIL WITH NICK BUBB:

• Nick is taking a well-earned break, back later in the week.