Inflation, shop numbers, labour, Adnams, Pizza Pilgrims, Parkdean etc.:

A DAY IN THE LIFE:

Maybe hypocritical to the last, having thought for a while that pigeons were idiots for being fooled by the ceramic models of owls or other birds of prey that are sometimes hoist atop buildings, I constantly find myself taking notice when driving of those (probably) harmless bobbles on top of lampposts that just might be cameras.

Not that I would ever nip into a bus lane for fifty yards to make a left turn or some such but, if ever I was minded to do so, a ceramic owl, no, a fake camera, might be sufficient to stop me.

Shame, perhaps, for the PM, his missus and his next door neighbour at no11, that there wasn’t a cardboard cut-out of a copper pinned up in the hallways of no10 when they were throwing on or other of their myriad parties. On to the news:

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PUBS & RESTAURANTS:

Inflation:

The ONS has this morning reported that the CPI index in the UK rose by 7.0% in the 12 months to March 2022, up from 6.2% in February. This is a fresh, 30yr high. It says ‘on a monthly basis, CPI rose by 1.1% in March 2022, compared with a rise of 0.3% in March 2021.’

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Labour:

Bizimply has said it believes that ‘hospitality businesses need to maximise the benefits of signs that the hospitality recruitment crisis is easing by investing in entry-level employees.’ CEO Conor Shaw says ‘in the current market, hospitality managers are having to invest in the pay and conditions of key staff such as GMs and Head Chefs with pay increases and retention bonuses.’ It adds that this is ‘already stretching wage budgets, so employers don’t always have the option to increase pay significantly for entry-level staff working front-of-house and kitchen shifts.’

UKHospitality has published recommendations for local government ahead of elections in early May. The manifesto lays out a dozen ways in which local authorities, councillors and council officers can help the sector get communities back on their feet, while simultaneously demonstrating that hospitality is best placed to lead the UK’s economic recovery.

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Consumer confidence:

Research conducted by University College London has found that 38% of consumers are worried about their finances, up from 32% in January. Meanwhile, operators face rising costs from increases in VAT, NI, NLW, food and energy prices, meaning price rises to consumers are likely as businesses protect margins.

The Bath Pub Company managing director Joe Cussens said ‘we’ve got this massive increase in costs, with no help or support at all, or even words of encouragement from the Treasury, and at the same time, you’ve got customers who are feeling squeezed because of their energy prices.’

The latest CGA Drinks Recovery Tracker showed that drinks sales are down 2% in the week to 2 April. CGA managing director UK & Ireland Jonny Jones said ‘Real-terms growth continues to be elusive, and consumers are clearly still cautious about both their spending and Covid infection rates.’

Research from The University of Stirling and published in the Drug and Alcohol Review journal has found that younger drinkers are more likely to perceive alcohol products as ‘socially unacceptable’ if bottles feature prominent health warnings.

COMPANY NEWS:

Adnams yesterday reported full year results for the 12 months to 31 December 2021 saying that, whilst not strictly comparable, revenues had risen from £50.7m in 2020 to £57.4m with the loss before tax reduced from £3.8m to £0.9m. Chairman Jonathan Adnams said that been volumes were level with 2020, bank debt was £11m, the group achieved a positive EBITDA of £2.6m and, though there is no dividend for the period under review, the group intends to recommence dividend payments once it is suitable to do so.

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Pizza Pilgrims has reported full year numbers (to 27 June 2021) to Companies House. Though the numbers are rather historic, the accounts were signed on 31 March this year and the comments are contemporary. The company, which welcomed Darrel Connell, representing investor Imbiba to its board in June last year, reports revenues broadly level at £11.7m (2020: £11.8m) with the loss before tax reduced to £290k from £647k in the prior period. After securing additional investment, the group had £3.1m of cash on its balance sheet at its June 2021 year end with some £1.9m outstanding to its bankers.

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Diageo’s Raising the Bar programme will make £2.4m available to help pubs, restaurants, and bars transform their outdoor sports areas, with funding capped at £50,000 per venue. Licensees must apply by 30 April.

Minor International, the new owner of restaurant group Corbin & King, has appointed an advisory board to guide plans for its UK business. Minor has a portfolio of more than 3,300 restaurants in the UK and is also an investor in the Patara and Benihana chains and nhow hotels in London.

Deliveroo’s shares fell fractionally yesterday in the wake of its Q1 update. The company has said that it believes it remains on track but says that it believes consumer spending could slow for rest of the year.

The Times reports that Arc Inspirations has secured backing from BGF in a deal valuing the business at around £60 million. The investment itself is reported to amount to £19 million. Arc believes the investment will allow it to double in size over the next few years.

HOLIDAYS & LEISURE TRAVEL:

Sky reports that Apollo Global Management is ‘plotting a £2bn takeover of Parkdean Resorts as it seeks a slice of Britain’s staycations boom.’ It says ‘Apollo is among the bidders picked by Parkdean’s owners to progress to the next phase of a sale process.’ Bourne Leisure, which owns Butlin’s & Haven in the UK, is reported to have been eliminated from the auction.

Immigration Services Union official Lucy Moreton has said that worker shortages mean airports and ports are facing a ‘very difficult summer’. Moreton said ‘Border Force is no longer attracting enough candidates to fill the vacancies that they’ve got… it takes nearly a year to fully train a Border Force officer’.

Wyndham Hotels & Resorts CEO Geoff Ballotti has told Hotel News Now that the leisure and extended stay markets should remain strong. He says ‘in our segments, in economy and midscale, [travel demand] is double digits ahead of 2019.’ He adds ‘we do think that trend is going to continue and we’re going to see people traveling this summer in record numbers.’

EasyJet claims that the relaxation of Covid-19 travel rules have led to a ‘strong, sustained recovery’ in its latest trading update. EasyJet has also reduced its estimated half-year losses to between £535 million and £565 million, compared with a loss of £701 million during the same period in 2021. Total revenue is expected to come in at around £1.5 billion.

HotelHub claims that hotel bookings are expected to recover to pre-pandemic levels faster than previously forecast, with global hotel transactions reached 87% of 2019 volumes in March – up from just 45% in January. HotelHub noted that domestic bookings continue to dominate the market with only a ‘gradual return’ to international travel.

UK Inbound reports that inbound tourism numbers are recovering, but it points out that the market is still lagging 2019 numbers.

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The European Travel Commission reports that some 77% of Europeans expect to take a trip in the next 6mths. It says 56% will visit another country whilst some 31% will travel within their own country. 

OTHER LEISURE:

Hornby, which owns the Hornby, Airfix and Scalextric brands, has reported that sales in the last quarter were ahead of last year but it adds that longer shipping times and fuel disruption have impacted its results. Its products are manufactured mostly in the Far East.

FINANCE & MARKETS:

Today’s inflation numbers – see Pubs & Restaurants above.

Shrinking workforce:

The BCC comments on yesterday’s employment and wages data saying ‘while payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.’ It says ‘increasing vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may remain a persistent drag anchor on economic activity.’

Real Wages falling:

The BCC says ‘although there was a rise in earnings growth, with inflation soaring, wages are still comfortably lagging behind price increases. If this continues as expected, real household incomes will be damaged further, stifling consumer spending, a key driver of UK economic output.’

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The rate of inflation in the US has hit a fresh 40yr high of 8.5%. Energy prices in the US are reported to have risen by 32% in the year to March.

Sterling mixed at $1.3002 and €1.20. Oil up at $104.48. UK10yr gilt yield down 5bps at 1.80%. World markets lower yesterday. London set to open down around 5pts as at 6.30am.

RETAIL WITH NICK BUBB:

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