Mobility, inflation, cutbacks, footfall, BOWL, SNAP & other:

A DAY IN THE LIFE:

You can be pretty sure there’s no human involved…

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On to the news:

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QUESTION OF THE WEEK?

Contributions, questions (and even more so, answers) warmly welcomed.

What will win out, premiumisation or the consumer hunt for value? Or will the market polarise between the two?

PUBS & RESTAURANTS:

Inflation & the cost of living crisis:

This is still all over the news and that isn’t likely to change for some time. Kantar data shows that grocery price inflation has now hit the highest level since May 2009, with supermarket prices up 7% over the last four weeks.

The fact that Restaurant Group and SSP both yesterday cautioned on the impact of inflation has made headlines.

Recessionary fears: Klarna, the Swedish buy now pay later firm, plans to cut around 700 staff.

Jonathan Brearley, CEO of Ofgem, has told MPs that the energy price cap is set to rise to around £2,800 in October, up from its current £1,971. He says the rise in energy prices is a ‘once in a generation event not seen since the oil crisis in the 1970s.’ Such a rise would leave a large number of consumers short of spending money.

The BBC has picked up on the suggestion that the government will announce help for families as soon as tomorrow.

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What are consumers cutting back on?

Meanwhile, YouGov has conducted a poll to look at just what householders are cutting back on. It says that ‘clothing tops the list, with 44% saying they had been forced to cut back on their clothing purchases since November.’

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Working from home & other labour issues:

This is also perhaps unlikely to change (materially) anytime soon. The ONS reports that 84% of workers want to split their time between home and the office after the pandemic, with more than a third spending at least part of their time working from home this spring.,,

PwC reports that almost one in five UK workers say they are likely to change jobs in the next 12 months.

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Footfall:

CGA & Wireless Social have updated on the relative busyness of UK cities and have suggested that ‘food and drink sales in Britain’s cities [are] back in growth as workers and visitors return.’ It says that the Vibrancy report ‘highlights the strength of cities led by Glasgow and Birmingham.’ It says that London have moved up the rankings ‘as workers and tourists return.’

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Bloomberg’s Pret Index suggests that ‘London’s financial districts have filled up again, driving weekday business to cafes and sandwich shops – except on Fridays, that is.’

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Discounts:

Pizza Express still 50% off for club members (terms apply) and 35% off for non-members. Bella Italia offering 50% off mains.

Drink sales & supply issues.

The CGA On Premise Measurement service shows that vodka sales were 24% higher during the first quarter of this year versus the same period in 2019.

Dunns Food and Drinks reports that glassware prices have risen by 80% over the past year, as production of bottles is energy intensive. As a result, stocks have tumbled and glassware shortages could soon be felt by the UK beer industry.

Other news:

Regarding footfall; Shaftesbury states that it is continuing to improve across its estate, being largely comprised of domestic visitors, workers and residents. Footfall from international tourists is also increasing and is expected to continue to grow through the summer.

COMPANY NEWS:

The MA reports that Greene King Pub Partners is set to increase prices of beer and cider on average by 4.7%. A Greene King spokesperson said ‘we’re seeing significant inflation across our industry with rising energy prices contributing to significant cost pressures in supply chains.’

HOLIDAYS & LEISURE TRAVEL:

US Customs and Border Protection is increasing the fee it charges for ESTAs from $14 to $21, set to take effect on 26 May.

UKinbound reports that inbound tourism to the UK could recover to ‘anywhere between 50% and 75% of 2019 levels’ but that a range of both supply and demand side issues, from recruitment to visas, were likely to slow down recovery.  The luxury and US markets appear to have recovered their confidence and holidaymakers there are likely to travel to the UK, although the important Chinese market is unlikely to return until 2023.

The Elizabeth line opened to passengers yesterday. It was originally meant to open in December 2018, but suffered a series of delays and ended up costing almost £19bn.

Stefan Schulte, CEO of Fraport, claims that he has an ‘optimistic view’ of the next few months for Frankfurt and its other airports. The group operates 31 airports around the world, including Slovenia and Greece in Europe.

Railway workers have voted to go on national strike later this year. The RMT says ‘members want a decent pay rise, job security and no compulsory redundancies’.

OTHER LEISURE:

Hollywood Bowl has reported H1 numbers.

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Separately, Hollywood Bowl announces the acquisition of Canadian bowling business, Teaquinn Holdings.

Snapchat yesterday warned that it was seeing a decline in advertising spend. The group’s shares fell by nearly 40% in early trading. The co says ‘since we issued guidance on 21 April 2022, the macroeconomic environment has deteriorated further and faster than anticipated.’

FINANCE & MARKETS:

S&P Global / Markit’s Flash UK PMI Composite Output Index has come in at 51.8 for May, down from 58.2 in May. The number is still suggesting expansion, but it is a 15-month low. S&P says ‘UK private sector firms signalled a sharp slowdown in business activity growth during May as escalating inflationary pressures and heightened geopolitical uncertainty acted as constraints on customer demand.’

S&P / Markit’s Flash Services PMI for May showed ‘the greatest loss of momentum’ with a drop to 51.8 from 58.9 in April. It adds that ‘many businesses in the travel, leisure and events sector still commented on strong growth conditions due to a rapid recovery from pandemic restrictions.’

Re inflation, S&P says ‘cost burdens increased rapidly in May, with input price inflation at private sector firms hitting a fresh survey record.’

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Government borrowing – at £18.6bn – was some £5.6bn lower in April this year than it was in the same month last. This may give the chancellor some room to provide help to households. Interest payments were £4.4bn.

Sterling down at $1.2538 and €1.1797. Oil price up at $114.89. UK 10yr gilt yield down 8bps at 1.895. World markets mixed yesterday. London set to open up 66pts as at 6.30am.

FORTHCOMING NEWS:

Hollywood Bowl reports H1 numbers today and tomorrow, 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.