Restaurant Group, GYM, C&C, Fever Tree, Pret, footfall, holidays & other:

A DAY IN THE LIFE:

Demands on the consumers’ time and money: I try not to use the misleading term ‘the good old days’ but, having said that, do you remember the good old days when all you had to pay for as regards media content was your TV license?

Because now, you still have to shell out the cost of the license – and that won’t have gone down – but in addition, you have to, or may believe that you need to, shell out for Sky, Amazon Prime, Netflix, Britbox, Disney Plus and the rest and then, when you really want to watch something, you can still find out that it’s pay-per-view only.

And heaven knows what the above adds up to.

The £2.49 and £3.49 pay-per-view charges on my credit card are legion. They never get explained but they, added to the various costs above, could total north of £1,000 a year, all of which eats into the budget for goods and services that would otherwise have been purchase with the money.

Anyway, on to the news:

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RESTAURANT GROUP – FULL YEAR NUMBERS:

The Restaurant Group has this morning released full year numbers and our comments thereon are set out below:

The numbers:

• RTN reports sales for the full year of £636.5m against £459.8m in 2020.

• The company reports that LfL sales compared with 2019 were up 15% at Wagamama, up 9% in its pubs, up 14% at its leisure outlets and down 41% at its concessions. In each case, RTN says that it outperformed its peer group

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PUBS & RESTAURANTS:

Inflation:

Stories continue to run as to how the Russian invasion of Ukraine is causing some food prices to spike ahead of what could be shortages of fertiliser and poor or harvests.

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The CEO of poultry-processing company 2 Sisters, Ronald Kers, claims food prices could jump 15% this year as a result of the war in Ukraine.

Discounts:

Pizza Express is offering ‘2022 pizzas at 2002 prices’. It is offering margherita pizzas at just £5 ‘Monday to Thursday from 4pm’. The deal runs to 7 April.

The state of the industry.

The latest Future Shock report from UK Hospitality and CGA comments on the size & shape of the hospitality industry in the wake of the covid pandemic. It also ‘highlights the vulnerable state of the UK’s pubs, bars, restaurants and nightclubs. It also demonstrates, however, how the industry can play its part in solving the cost of living crisis.’ It says that operators may pass on price rises of around 11% to consumers.

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Labour market, wages & cost of living:

UKHospitality CEO, Kate Nicholls, has said the latest ONS labour market figures ‘show jobs in the hospitality sector up 252,000 over the last 12-months and unemployment substantially down, now at 4% and therefore below pre-pandemic levels…If hospitality is to be able to continue to provide jobs and support wider UK recovery and growth, then the sector needs further support from the Government. The key to this will be for the Chancellor to keep VAT at 12.5% beyond April.’

Russia sanctions:

The UK government has placed an export ban on luxury goods to Russia and hiked up import tariffs from the country on iconic products such as vodka. The new import tariff hike will represent a 35 percentage point rise on current rates and will hit £900 million worth of key products such as Russian vodka, metals, fertilisers and other commodities

Footfall:

Pret has told Bloomberg that trade is picking up. Bloomberg reports ‘London’s financial districts are getting busier and busier as life returns to normal in the capital.’ It says Pret’s ‘transactions are 88% of pre-Covid-19 levels there…a performance the chain had last reached in November before cases soared the following month. The figure puts banks’ return-to-office efforts in London well ahead of New York’s, with Pret’s sales in the cluster that includes Wall Street standing at 55% of pre-pandemic levels last week.’

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Other news:

The Insolvency Service has updated on the number of companies and individuals who have entered formal insolvency procedures. It says in February 2022 there was a total of 1,515 registered company insolvencies across England and Wales, further broken down as to 1,329 creditors voluntary liquidations, 40% higher than in February 2020, 109 administrations, 26% lower than February 2020 and 74 compulsory liquidations, 68% lower than February 2020. There were only 3 company voluntary arrangements.

Lumina Intelligence has reported that majors Greggs, McDonald’s and Costa Coffee increased their share of the food to go market in 2021. It says they took market from supermarkets. Greggs had 5% of the food to go market – up from 4.4% in 2020 with McDonald’s taking a 4.4% share of the market in 2021, up from 3.1% in 2020. Costa had 4.3% share, up from 4.1% in 2020.

Data compiled by Northern Restaurant & Bar says that Liverpool is the city that has increased its number of bars and restaurants by the largest percentage with units up 4.4% between September 2021 and December 2021. Leeds is in second place on 3.9%, Manchester fourth on 2.5% and Newcastle fifth on 2.3%, all far outstripping the 1.6% growth shown by London.

COMPANY NEWS:

C&C has updated on year-end trading saying that the year finished with ‘a robust return to trading driven by strong consumer demand.’ the company says ‘C&C expects to report a FY2022 operating profit in the range of €45-47m.’ It adds ‘in January 2022, restrictions in our core markets of the UK and Ireland were eased and we are pleased to see positive trading in the on-trade. We were back trading with 81% of direct delivered outlets in February 2022 versus February 2020, with corresponding volumes at 68% and momentum building as outlets continue to re-open.’

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Fever Tree Drinks has reported full year numbers to 31 December 2021 saying that it ‘delivered revenue growth of 23% (26% at constant currency), growing strongly across all markets, extending its position as the leading global premium mixer brand.’ The company says ‘the Off-Trade performed well, and remained ahead of 2019 levels, even as the On-Trade re-opened.’ It says the company ‘maintained its number one position in the UK retail mixer category, with 39.8% value share.’

Fever Tree reports sales of £311m against £252m with adjusted EBITDA of £63m vs £57m. EPS is 38.2p vs 35.8p with a dividend of 15.99p vs 15.68p. The co says that it had net cash at the year end of £166.2m vs £143.1m at the end of the prior year.

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JD Wetherspoon has raised the price of a pint by 10p on average, with an extra 20p being added to drinks at London venues. One customer who noticed a price hike at a Spoons in Exmouth told Devon Live they saw a pint of Ruddles go from costing 99p to £1.49.

Prezzo has exited a further 30 sites since it was acquired in a pre-pack administration in February 2021. The majority of the business was sold in a pre-pack demonstration to NewCo, owned by Cain International, for £5.04m.  

Curious Brewery has announced a further substantial investment into its Ashford brewery. It reports that its new £0.4m bottling line will package the full range of Curious premium products.

Small Beer intends to expedite its expansion plans after smashing its £300k crowdfunding target on Crowdcube. The company which describes itself as the ‘world’s first brewery dedicated to classic beer styles below 2.8%’ has so far raised £700k.

Yum China has said that sales in China fell by 20% in the first two weeks of March due to a surge in Covid cases across China. Yum China said “the situation has rapidly deteriorated” due to regional lockdowns.

Food delivery company Foodstuff has raised capital of $1.4m (£1.1m) in a Seed Round. The funding round was led by Base Investments UK. Hospitality investor Charlie McVeigh will become non-executive chair of the board.

The MCA reports that EG Group’s acquisition of Leon last year has opened up the door for the growth of the brand. The business recently more than doubled its openings target from 20 sites this year to 50 in 2022, with drive-thrus forming a good proportion of this.

HOLIDAYS & LEISURE TRAVEL:

The Business Travel Association has welcomed the removal of all Covid-19 travel restrictions in the UK, saying ‘Removing passenger locator forms will oil the wheels of the UK economy. It will make business travel more frictionless, stimulating trade and reducing the £2.5 billion a week impact our economy still faces from Covid travel restrictions.’

Heathrow will remove the requirement for wearing face coverings at the airport from Wednesday. British Airways and Virgin Atlantic welcomed the move, signalling that they were preparing to follow suit by dropping the mask mandate on their aircraft as soon as regulatory requirements for their destinations allow.

Uber is to begin charging consumers fuel surcharges of $0.45 or $0.55 on Uber rides in the US. It will add surcharges of $0.35 to $0.45 on Uber Eats orders starting today.

OTHER LEISURE:

The Gym Group has reported full year numbers to end-December saying it is ‘recovering strongly.’ CEO Richard Darwin says ‘the Gym Group has had an encouraging start to the year, building on the momentum of our excellent recovery in 2021. We have now grown our membership by 50% in the 12 months to February 2022.’

Camelot has lost the licence to run the National Lottery, with it being awarded to Allwyn Entertainment Ltd instead. The Gambling Commission said it had received the highest number of applications to run the National lottery since the first licence was awarded in 1994. 

Tesla has put up its prices in the US and China for the second time in less than a week – after boss Elon Musk complained of rising costs. Key input materials for electric batteries such as nickel have seen prices surge after Russia invaded Ukraine.

FINANCE & MARKETS:

Commenting on the ONS Labour Market statistics released yesterday, the BCC said that ‘rising payroll employment and declining unemployment suggests that demand for workers remains robust despite growing headwinds.’ It says ‘although there was a modest pick-up in regular pay growth, wages are still comfortably trailing behind inflation, which is putting the brakes on consumer spending by eroding their spending power and confidence.’

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Sterling up at $1.3062 and €1.1895. Oil up around a dollar at $102.55. UK 10yr gilt yield down 4bps at 1.57%. World markets heading better yesterday and London set to open up by around 92pts as at 7am.

RETAIL WITH NICK BUBB:

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