Inflation, consumer confidence, new openings, prices, holidays etc.:

A DAY IN THE LIFE:

Have you noticed the magnetic appeal that high vis jackets & hard hats seem to have for politicians?

And, if they can be seen behind the wheel of something that Johnny Ordinary doesn’t get to drive very often, then so much the better and, if they can twiddle dials and jab buttons, then the day is complete and we mortals can rest easy, secure in the knowledge that the nation is safe for another day in the hands of our earthly leaders.

Anyway, there was quite a bit of that in evidence towards the end of last week which, if we were at all cynical, could suggest that some more news was about to break and we were being thrown a bit of distraction.

Indeed, come to think of it, just where is Mr Cummings at the moment?

It’s the start of another action-packed week so, without further ado, let’s move on to the news:

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PUBS & RESTAURANTS:

Inflation.

Tesco chairman John Allan has said that the ‘worst is yet to come’ on rising food prices. Mr Allan tells the BBC that the proportion of household income spent on food was on average about 9% last year, but could rise to about 15% by the spring. Meanwhile, the Mail runs a story quoting ‘Boris Johnson’s top economist’ as saying that Andrew Bailey at the Bank of England ‘misread’ signals and was too complacent about inflation which, until comparatively recently, Mr Bailey thought was ‘transient’.

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Deloitte’s latest consumer confidence tracker has shown a 1 percentage point drop in confidence to minus 11 per cent in Q4 last year. Deloitte says ‘rising utility and grocery bills increase personal expenditure for 41% of consumers, up from 36% in Q3 2021’ and adds that ‘household disposable income sentiment fell by five percentage points in Q4, to -26%; nine percentage points lower than Q4 2020.’

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Lumina Intelligence’s Operator Data Index suggests that the top 10 UK casual dining brands will grow in terms of footprint by 1.1% to 5,566 in the current year. Major additions will be Pret A Manger (+7.5%), Nando’s (+4.0%) and KFC (+2.1%). A number of operators including Pizza Hut Restaurants, Sizzling Pubs and Burger King are expected to cut the number of units that they operatate.

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KAM Media has produced a Family Dining report outlining the scale of the opportunity for servicing the market along with a number of pointers as to what could help sales. KAM says ‘of course there’s a fine line between children having fun and ruining the experience for other guests – this is where staff can be vital in ensuring that the environment works for all parties.’

The Sunday Times reports on a continued drift back to office working. 

The US Bureau of Labour Statistics has reported that foodservice and bar employment grew by 108,000 jobs in January. Levels of employment, however, are still around 10.3% on pre-pandemic numbers.

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UKHospitality figures suggest that businesses in the hospitality sector will be forced to pass on double-digit price rises to customers, due to cost pressures and the increase in VAT in April. Nearly half of operators (47%) are reporting that they will be forced to increase consumer prices by over 10% this year, with 15% anticipating hikes of over 20%.

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The Morning Advertiser reports that some licensees are seeing their electricity bills more than double. One operator said their bill went from an average of £2,700 per month last year to £5,900 in December 2021. Operators are now looking to invest in more energy efficient kitchen equipment, in a bid to save on electricity usage.

COMPANY & OTHER NEWS:

The Sunday Times reports that Richard Caring is no longer in the running to buy Corbin & King.

Carlsberg has reported full year 2021 numbers saying that the ‘2021 performance [was] well ahead of pre-COVID 2019: strong top-line growth and operating cash flow; increased returns to shareholders. Organic revenue growth was 10.0% with reported growth of 13.8% to DKK 66,634m. The group says that adjusted EPS is up 11% to DKK 48.3 and says that ‘the Supervisory Board will propose to the Annual General Meeting a 9% increase in dividend to DKK 24 per share.

Re the outlook, Carlsberg says ‘2022 will be another challenging year’. It says ‘COVID-19 is expected to continue to impact our markets to various degrees. At the same time, our business will be impacted by substantial increases in input costs, which we aim to offset in absolute terms through higher revenue/hl and continued tight focus on costs. The higher revenue/hl may have a negative impact on beer consumption.’

The MCA explores Nando’s agenda for sustainability for the last decade, with a spokesperson from the casual dining chain saying its ambition is to be a net zero business by 2030. The business has also been championing the reduction in food waste, through a food donation scheme which means that chicken not eaten in its restaurants is donated to more than 450 local charities.

Aramark will provide food and beverages at five of Merlin Entertainments’ UK locations, as well as two in the US. Aramark will begin operating from March this year in the UK, with US operations up and running by the end of March 2023.

Coffee company De’ Longhi Group credits its 2021 exceptional performance to ‘deep-rooted change in lifestyles at home’ with annual revenues rising 36.8% to €3.2bn ($3.6bn) over the last 12 months, with all of its global markets achieving double-digit sales growth. Hospitality trading restrictions and lockdowns during the pandemic have boosted sales of premium at-home coffee equipment as consumers seek to emulate the café experience at home.

The MCA reports that Danish restaurant group Sticks ‘n’ Sushi plans to open 3-4 restaurants in London over the next few years. The business previously credited the UK, where it has nine restaurants, as being crucial to the record revenue it achieved in the year to the end of June 2021.

Panera Bread will launch a new contactless dine-in feature across its US stores, enabling customers to order food and beverages for table service via the Panera Mobile App.

Northern Ireland Finance Minister, Conor Murphy, has announced that nightclubs in Northern Ireland could be eligible for additional payments of up to £36,500.

PubAid reports that it ‘has received its highest ever level of support from brewers, pub companies and industry suppliers, setting it on course to achieve its ambitions over this year and beyond to promote pubs as a force for good in their communities.’ It says that ‘receiving this level of funding is a great endorsement for our work and puts us on a sure footing to expand our activities.’

LEISURE TRAVEL & HOTELS:

Jet2.com and Jet2CityBreaks will resume their European cities programme on Monday. Three new routes will start in April: Manchester to Athens; Birmingham to Athens; and Birmingham to Barcelona.

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Britons wanting to go skiing or on city breaks in France for half term will have to get a booster if they received their second dose any earlier than May last year. The Foreign Office says ‘travellers aged over 18 and one month who had their full vaccine course over 9 months ago and have not since received a Covid-19 vaccine booster must follow the rules for unvaccinated passengers to enter France.’

Travellers are being further warned that visitors to Spain will also need a booster jab if they received their second vaccine more than 270 days ago. The EU has been aiming for a common approach across its 27 member states but this has not yet been agreed.

A YouGov poll has found that most people are supportive of continuing to wear face masks on flights, with 67% being either very (37%) or fairly (30%) comfortable with mask wearing on aircraft.

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Virgin Hotels will expand into the UK this year with Virgin Hotels Edinburgh, followed by Virgin Hotels Glasgow.  The portfolio continues to grow stateside, with the opening of Virgin Hotels New York scheduled for late summer of 2022.

Royal Caribbean reported Q4 numbers on Friday saying that ‘bookings in the fourth quarter were sequentially higher than the third quarter. Due to the impact of the Omicron variant, bookings decreased in December and remained lower over the holiday period, but have started to increase with each consecutive week since the beginning of 2022 and are now back to pre-Omicron levels.’

RCL says it ‘expects to return the full fleet before the summer season of 2022 and load factors approaching historical levels in the third quarter of 2022.’ CEO Jason Liberty says ‘during 2021, we made significant progress toward our recovery with over 85% of our capacity returning to operations.’ He adds ‘we expect 2022 will be a strong transitional year, as we bring the rest of our fleet back into operations and well-nigh historical occupancy levels.’

Travelzoo reports that the boom in staycations prompted by Covid will remain a feature of the holiday market for at least the whole of this year.

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OTHER LEISURE:

Sky Bet, which is owned by Flutter, is reported by The Telegraph to have launched an ‘11th-hour bid to return [the] National Lottery to UK hands.’ The paper says that Flutter is to buy one of the contenders for the lottery contract.

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Snap beat analyst expectations in its Q4 results, marking Snap’s first profitable quarter on a net income basis as a public company. The report comes a day after Facebook parent Meta delivered disappointing guidance for the first quarter.

The BBC reports that Amazon and Nike are casting the rule over Peloton with a view to possibly buying the company.

FINANCE & MARKETS:

The Bank of England, which has been criticised in some quarters for its ‘complacency’ regarding inflation, has said that the squeeze on living standards will not let up until next year. Governor Andrew Bailey says it’s ‘going to be a difficult period ahead, I readily admit, because we are already seeing, and we’re going to see, a reduction in real income.’ He says ‘we’re going to start coming out of it in 2023, and two years from now, we expect inflation back to a more stable position.’

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President of the ECB Christine Lagarde has said that the UK is in a worse position re inflation due to Brexit and the depletion of the workforce. She says ‘there was a lot of non-UK labour force that eventually had to leave the United Kingdom, which has not been totally replaced.’ She says ‘the shortage of work is actually having a bearing on the forces of the labour market in the UK.’

A court has ruled that checks on food and agricultural goods from GB to Northern Ireland must continue.

The US economy added 467k jobs last month per the Labour Dept. This was deemed a positive surprise that could increase upward pressure on US interest rates.

Markit reported on Friday that the Construction PMI for the UK rose from 54.3 in December to 56.3 in January. It says ‘supplier lead times continued to lengthen in January as staff shortages and a lack of haulage availability hindered deliveries.’

The EY Item Club has said that the economic recovery could be held back by inflation during 2022. It says that national income could have risen by as much as 7.1% last year but this year it could be 4.9% (down from a previous estimate of 5.6%).

Sterling weaker at $1.3519 and €1.1827. Oil price sharply higher at $93.50. UK 10yr gilt yield up again at 1.41%. World markets mixed on Friday. Far East better in Monday trade & London set to open up around 37pts better as at 7.10am.

RETAIL WITH NICK BUBB:

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