Langton Capital – 28-10-19 – Delivery, Discounts, Licencing Hours, etc.
Delivery, Discounts, Licencing Hours, etc.
A DAY IN THE LIFE:
So we learned over the weekend that walking across the moors when it’s four degrees and driving rain is rather different in theory to practise.
Because, wrapped up as you may believe you are, the rain will find a way in, and pitching up at some tea shop, preferably a pub, looking like a drowned rat is rarely a good look.
Except, of course, if you call it a day and drive to Whitby on what turns out to by Whitby Goth Weekend – check it online – as then it’s simply not possible to look weird enough.
Indeed the fact that something was going on rather crept up on us because, as it’s not polite to ask someone if they’re dressed up to look ghoulish or if they are simply ugly, it took us a while to clock to the event.
However, the volume of people, some of them disturbingly ‘in’ to their roles on the street made it obvious that we’d stumbled onto some dystopian gathering and, keen as we were to get out of the rain, we just went along with it.
GENERAL NEWS – PUBS & RESTAURANTS:
Discounts still plentiful. Prezzo 50% off, Café Rouge and Pizza Express 25% off food, Bella Italia offering second main for £1 etc.
The MCA’s September 2019 Eating Out Panel Report has found that coffee shops have increased their share of the breakfast market by 2pp to 27.7%
Despite customers spending less in restaurants and pubs, research from Peter Backman has found that consumers are increasing their demand for delivered meals from restaurants. Peter Backman highlighted Sainsbury’s trial of delivering baked pizza via Deliveroo and Pret A Manger entering into an exclusive partnership deal with Deliveroo in London, as examples of how the industry was developing.
Deliveroo Editions, the group’s dark-kitchens business, is reported to have entered into an agreement with Casual Dining Group to use the Chicken on the Green name. This is a part of Deliveroo’s plan to licence brands to restaurants reports Propel.
See earlier Langton emails for our comment on the merits and / or demerits of letting a fox into the henhouse. Old story: farmer trusts fox. I’ve changed, says the canine. Ok, says the farmer; look after the chickens. Fox kills all the birds, eats a couple. But you said you’d changed, says the distraught farmer. What can I say, replies the fox. I’m a fox.
This is partly a micro-macro situation. What is good for one restaurant operator may not be good for the industry as a whole. Perhaps giving customers’ contact details to Deliveroo etc is bad enough. Surrendering branding to the delivery company is arguably another step in a sub-optimal direction.
The BBPA has welcomed plans to extend opening hours for VE Day 75 celebrations.
UKHospitality has also applauded the possible extension to licensing hours for VE 75 celebrations, with Chief Executive Kate Nicholls commenting: ‘The 75th anniversary of VE Day will be an historic moment for the country. People will want to mark the occasion in all sorts of ways and pubs are often the focal point for community celebrations and acts of commemoration. This will be a moment of national significance and extending licensing hours will allow pubs to play their part’.
The Guardian has reported that JD Wetherspoon ‘may have breached the law over 1.9m Brexit beer mats’. The accusations are that the pub group breached the Companies Act after failing to seek shareholder approval for spending on political expenditure under the 2006 legalisation.
Research from CGA has found that premiumisation of beers have added an extra £380m to pub coffers in the last four years, the Morning Advertiser has reported.
KAM Media has reported that the on trade has seen low/no alcohol beer sales increase 28% with non-alcoholic spirits increasing 400%+. In the off-trade, £43 million was spent on low/no-alcohol beers in the last 12 months.
Coca-cola European Partners have taken a 25% in Kol, a Paris-based on-demand service delivering drinks to customers’ doors, through its venture arm CCEP Ventures. It also took a 15% stake in self-driving technology firm TeleRetail.
HOLIDAYS & LEISURE TRAVEL:
The latest Hotel Market Tracker reports London hotel Q3 RevPAR growth of 5.1% to £145.97 yoy, with ADR up 5.3% to £165.69 despite a slight fall in occupancy of 0.3% to 88.1%.
However, regional hotels fared significantly worse in the quarter with RevPAR down 1.3% to £63.42, ADR down 1% and occupancy down 0.3% to 82.3%.
HVS chairman Russell Kett said ‘It has been a tough quarter for UK hotels with intense pressure on margins from increasing costs, staffing issues as well as wavering consumer confidence…When the market weakens hotels outside the capital will always find it tougher and operators will need to keep a firm hand on costs and margins.’
Club Med plans to open a new resort in Malaysia’s Sabah state in late 2022.
Apollo Global Management acquires a 48.6% stake in Italian gaming company Gamenet with the aim of delisting the group.
The FT has quoted CEO of Everyman Media, Crispin Lilly, as saying that the upmarket cinema chain wished to make its units a hub on the high street. He says ‘someone needs to place make.’ Lilly says ‘regeneration and repositioning need to happen on our high streets. A lot of our streets are never going to be retail destinations again.’ Perhaps rather cinemas than tattoo parlours and cash for gold shops.
The billionaire owners of the Daily Telegraph and the Sunday Telegraph, the Barclay twins, are reported set to put both titles up for sale due to a 94% slump in profitability.
FINANCE & ECONOMICS:
Labour has suggested that leaked government papers confirm that the current administration intends to strip back workers’ rights in order to undercut overseas firms on price. Tory Minister Kwesi Kwarteng has said the claims are “way exaggerated”.
START THE DAY WITH A SONG:
Last Friday’s song was Superfly by Curtis Mayfield, to day who sang:
I felt the touch of the kings and the breath of the wind,
I knew the call of all the song birds
They sang all the wrong words
I’m waiting for you, I’m waiting for you
RETAIL WITH NICK BUBB:
Saturday’s Press and News (1): In terms of Retail news, the big story in the Saturday papers was the Times scoop that the shadowy Barclay brothers have apparently put the Telegraph newspaper group up for sale, along with the Shop Direct home shopping group. The main Business story in the Telegraph itself was that the Silchester fund management group has built up a 10.4% stake in Morrisons. The Telegraph also highlighted the view of one City broker that a Dec 12th General Election could be good for the Retail sector, by relieving Brexit uncertainty just before the main Christmas spending period and the New Year Sales. However, the Telegraph also had an interesting column arguing that it is good that the UK is no longer “a nation of shopkeepers” and that retail jobs are being lost, as the economy is evolving instead into being “a nation of healthcare workers and business services
Saturday’s Press and News (2): The Daily Mail highlighted that Boohoo has launched a Cara Delevingne designed range for its fast-growing Nasty Gal business and several of the market reports flagged the boost that Boohoo got on Friday from a bullish report from Goldman Sachs. The Daily Mail also noted the appointment of Mark Gifford as Chairman of Debenhams. The FT had a feature on the decision by Sports Direct to appoint RSM as its new auditor (“RSM ventures where other auditor s fear to tread”). In other news, the Guardian said there is pressure on the hapless Chancellor, Sajid Javid, to publish his economic forecasts, given his failure to provide a Brexit impact assessment and the decision to scrap the Budget on Nov 6th. And looking further afield, the FT had a feature on its International news pages about the controversial American Dreams shopping and leisure mall which has just
Sunday’s Press and News (1): There were two big stories in the Sunday papers: the Sunday Times flagged that fears are rising for the future of Mothercare in the UK (with KPMG called in again to advise on further store restructuring, including a possible second CVA) and the Mail on Sunday highlighted that Sports Direct has been engulfed in a $100m legal battle in the US over its acquisition of the bankrupt Eastern Outfitters sports chain (with Mike Ashley subpoenaed to give evidence under oath). The Mail on Sunday also flagged that ASOS has built up its warehouse stocks to launch a big Black Friday sales blitz and that City brokers are expecting Marks & Spencer to report another big fall in profits and further “exceptional” costs with its interims on Nov 6th. In contrast, the Sunday Times noted, in passing, that Next should provide a “glimmer of hope” with its Q3 update this
Sunday’s Press and News (2): The Sunday Times also flagged that the Bonmarche fashion chain is likely to be bought out of administration by the secretive entrepreneur Philip Day and it had a follow-up feature article on the unsavoury “financial engineering” techniques that he uses to buy distressed retailers (“Stores mogul turns a profit from disaster”). The Sunday Times also noted that the embattled Philip Green is separating off the logistics operations of Top Shop from the rest of the beleaguered Arcadia group, whilst denying that this is a prelude to a break-up. The Sunday Telegraph highlighted that the struggling John Lewis Partnership is stepping up its efforts to build a personal finance and insurance business to offset the pressure on its core operations. The Sunday Telegraph also had a feature on the expected shake-up of the Online luxury retailers Farfetch,
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 30 Oct 19 Royal Caribbean Q3 numbers
• 31 Oct 19 Carlsberg Q3 update
• 5 Nov 19 Marriott Q3 numbers
• 6 Nov 19 Sajid Javid’s maiden Budget
• Est 7 Nov 19 JD Wetherspoon H1 update
• 7 Nov 19 Bank of England MPC interest rate decision
• 12 Nov 19 G4M H1 numbers
• 13 Nov 19 Coca Cola HBC Q3 update
• 14 Nov 19 Young & Co H1 numbers
• 20 Nov 19 SSP FY numbers
• 21 Nov 19 William Hill Q3 update
• 21 Nov 19 DART Group H1 numbers
• 21 Nov 19 Hotel Chocolat AGM
• 27 Nov 19 Marston’s FY numbers
• 27 Nov 19 Britvic FY numbers
• 27 Nov 19 On the Beach FY numbers
• 28 Nov 19 Greene King H1 numbers
• 4 Dec 19 Loungers H1 numbers
• 4 Dec 19 Stock Spirits FY numbers
• Est 6 Dec 19 EasyHotel FY numbers
• 12 Dec 19 TUI Group FY numbers
• Est 12 Dec 19 Fulham Shore H1 numbers
• 12 Dec 19 Fuller’s H1 numbers
• 12 Dec 19 Vianet H1 numbers
• 13 Dec 19 Hollywood Bowl FY numbers
• 19 Dec 19 Bank of England MPC interest rate decision