Everyman, consumer, confidence, inflation, Red Oak, DGE, TUI & other:

A DAY IN THE LIFE:

The dog’s getting a bit creaky in his old age and, in a bid to improve his lot, we’ve got him a selection of tablets and, whatever the merits or demerits of medicating a dog, we can be sure of at least one thing, the results won’t be clouded by any risk of a placebo effect.

• Nick is taking a well-earned break.

Anyway, we’ve made it to another Friday. The weather’s glorious. High teens in the day and around freezing at night. Suits me but, apparently, it’ll mean the death of many a newly-planted runner bean. On to the news:

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THE CONSUMER:

Introduction:

• The Spring Statement – encompassing fiscal & tax policy – is only one of a number of factors impacting the consumer. Others include interest rates, specific cost increases (food, energy & fuel) and wider inflation.

• Having said the above, the reaction to the Spring Statement was almost uniformly non-positive.

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GfK has reported that consumer confidence has slipped by five points in the face of the deepening cost of living crisis. GfK says ‘a wall of worry is confronting consumers this month and there is an unmistakable sense of crisis in our numbers.’

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PUBS & RESTAURANTS:

Inflation & costs.

More letters and emails are going out from industry suppliers to hospitality operators informing them of price rises.

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RTN and JDW last week maintained that their costs were rising by ‘five percent plus,’ and by ‘a little less than inflation’ respectively.

Altus Group claims that hospitality businesses in England face a ‘dangerous cost of doing business crisis’ with high street business rates set to rise £3.1bn on 1 April.

Milk company Arla has said that supermarket milk prices need to rise by about a third to cover spiralling costs as the dairy co-operative said it would start exporting British milk overseas where farmers can get better returns, reports The Times.

The Daily Mail reports that the ‘hospitality industry [is] on a knife edge…’

Trading:

CGA has released trading data for last week, with its Drinks Recovery Tracker showing that out-of-home drinks sales were 7% up on pre-pandemic levels.

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Next yesterday made some interesting comments on consumer behaviour. See Tweets. The company believes it may lose some revenues to hospitality over the coming months as consumers switch to experiences over products.

COMPANY NEWS:

MCA reports that Red Oak Taverns CEO Mark Grunnell says the company has ‘significant firepower’ for acquisitions following a debt refinancing with Hayfin Capital Management. Grunnel said he would be ‘very disappointed’ if the tenanted pub company did not beat its 2021 openings tally of 34 pubs this year.

Victors Newcastle restaurant has submitted plans for its £1.5m restaurant in the site of the former Las Iguanas. The American-inspired restaurant will cater for 175 diners of which 80 are outside dining spaces.

The MCA reports that Stonegate’s managed pub conversions completed so far are delivering ‘promising results’ with plans to maintain its capital investment programme going forwards. The 4,580 strong pub company reported strong trading, with revenue of £714m for the year ended 26 September 2021. The company reported a loss before tax of £233m, up from a loss of £746m the year prior.

Gusto Italian says that Mother’s Day will be its busiest day since before the COVID pandemic. Advance bookings are already 35% higher than their previous busiest post-COVID day, Friday 17th December 2021, and gift card sales are also up 115% compared with this time last year.

Next has warned that prices are set to raise this year, forecasting them to increase by 3.7% in H1 and 8% in H2. The retailer said it still expects to make a £850m profit this year. Inflation data showing overall clothing and footwear prices rose 8.8% in the year to February 2022.

Diageo has agreed the sale of its Windsor business to Bayside/Metis, a South Korean-based private equity group.

HOLIDAYS & LEISURE TRAVEL:

Travel Weekly reports that German authorities are probing the transfer of a large stake in Tui by Russian billionaire Alexey Mordashov in a potential breach of EU sanctions triggered by Russia’s invasion of Ukraine. The transaction, on February 28, saw the 29.9% stake, worth about £1.1 billion, transferred to BVI registered Ondero Ltd with no owner listed, despite a legal requirement that stakeholders be named. A subsequent filing revealed Ondero’s owner to be Mordashov’s wife Marina.

Advantage Global Network, formerly known as WIN Global Travel Network, said it expected annual turnover for its members to total around $7.5 billion this year. The network said that 80 per cent of its partners had now moved from ‘pandemic mode to recovery mode’, with 95 per cent planning to recruit new staff this year.

Business Travel Show Europe research shows that business travel buyers are seeing healthier budgets for 2022 than they did six months ago, but travel levels are still unlikely to return to pre-Covid levels for at least two years for most organisations.

Hex Hotel has opened in Doncaster, just metres from the entrance to the 175-acre Yorkshire Wildlife Park.

Peter Hebblethwaite, CEO of P&O Ferries, has admitted to MPs that a decision to sack 800 workers last week without consulting the unions broke the law. ‘We chose not to consult and we are, and will, compensate everybody in full for that’ he said.

STR reports that ‘lifted by spring break travel, U.S. hotel performance rose from the previous week and showed improved comparisons against 2019.’ It says occupancy in the week to 19 March was 66.9% (down only 3.7% on 2019) and rates were up 13.6% at $151.63. The resultant REVPAR was up 9.5% on three years ago.

OTHER LEISURE:

Everyman Media Group has reported full year numbers to end-December, saying that the company traded normally for 24 weeks during the period, was restricted for a further nine and shut for 19 weeks. It says for 2021, admissions rose by 67% to 2.0m from 2020, when admissions were 1.2m. Given the nature of the lockdowns in both years, this is not comparing apples with apples.

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Spotify has said it paid $7bn to music rights holders last year.

FINANCE & MARKETS:

The flash UK Markit PMIs for March were released yesterday showing the economy has remained buoyant following Russia’s invasion of Ukraine. The services flash PMI was 61.0, up on the 60.5 registered in February and the composite number was 59.7, just down on the 59.9 registered the month before.

Markit cautions on inflation saying ‘escalating inflationary pressures and concerns related to Russia’s invasion of Ukraine meanwhile led to a slump in business optimism to its lowest since October 2020.

Markit says that the service sector level of activity continued to benefit from the removal of COVID-19 restrictions. It says ‘there were reports that the return to offices and customer events had boosted business activity in the service economy, alongside pent up demand for travel, leisure and entertainment.’

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Some 187,000 people filed for unemployment in the US last week, the lowest number since 1969, the Labour reported Department reported. The number is down around 28,000 from the previous week.

Sterling mixed at $1.3217 and €1.1982. Oil price lower at $119.28. UK 10yr gilt yield down 1bp at 1.64%. World markets mixed yesterday. London set to open down around 8pts just before 7am.

See The Consumer above for GfK figures for March.

RETAIL WITH NICK BUBB:

• Nick is taking a well-earned break.