60 Seconds. Actions Speak Louder than Words…:

August 11 2017

Demand softer & economy is slowing; why so little comment?

  • Data shows construction, industrial output & manufacturing output fell in Q2
  • Car production is lower year to date & GDP targets may be undershot
  • Big ticket spending (see e/ms) may bear the brunt
  • House transactions, furniture sales & car sales are slowing but holidays look OK
  • In light of the above, what comment should we expect from leisure retailers?

No reward likely for bearer of cautionary news:

  • Unsurprising, perhaps, that there is no rush to be the first to speak.
  • Some operators, Richoux, Tasty (twice) & others have had no choice
  • But elsewhere, there are no prizes for caution. But actions speak louder than words

Unit closures, unit sales, share buybacks rather than expansion seem the order of the day:

  • Tasty, Richoux, Comptoir, Restaurant Group & others have warned on trading
  • Many operators are selling (or simply shutting) units. JDW has cut c10% of its estate
  • The Diner, Byron, Restaurant Group, Wildwood, Prezzo, ASK, Strada & others have units for sale. Good luck with that.
  • JDW has spent c£42m buying back shares since 4 July. It has cut around 10% of its units
  • To succeed one must be relevant, authentic, well-financed & not overrented.
  • And it helps to be lucky. Give it a try someday.