Polarisation, consumer support, business confidence, delivery etc.:

A DAY IN THE LIFE:

I think that snooze alerts on various social media platforms – those that caution you that you’ve ‘gone to sleep’ because you haven’t made any vacuous posts for a few minutes – are as good for your mental health as free flights to casinos are for your financial welfare.

Because they have to be seen in the context that, as they say with social media, if you can’t see the product, then you are the product.

And, if somebody is making money out of you, then it could be that the little blue circles or green ticks or like buttons (which give you an endorphin rush) and the snooze alert (that’s intended to make you feel guilty or trigger FOMO), are just means to an end that could be optimal for someone other than yourself.

But what do I know, until recently, I refused to believe that ‘influencer’ was a real job. On to the news:

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QUESTION OF THE WEEK?

Question of this week:

What will happen to the delivery market now that restaurants are open again, times are getting hard and there may be some discounting?

PUBS & RESTAURANTS:

Some evidence of slowdown:

Spending may normally dip towards the end of the month. However, though it wouldn’t do to call a trend with too little evidence, there are some signs that there may be something more of fundamental going on. An RSM analysis of the latest data from Datscha shows that London saw a slight increase in footfall of 5% in April, however, it says Oxford Street is still 52% lower than pre-pandemic levels. It suggests this is partly down to the sustained impact of hybrid working.

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Overall, UK footfall was up 4% MoM in April, which was driven by significant increases in Leeds (up 23%), Glasgow (up 16%) and Manchester (up 11%). Footfall as a whole in the UK is still 28% lower than in 2019.

The ONS reports that the UK has seen a dip in weekly card spending, with overall  restaurant bookings falling by two percentage points in the week to 22 May and spending on credit and debit cards falling three percentage points on the previous week.

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Cost of living crisis.

A KAM study shows that 46% say they will cut back on non-essential spending during the cost of living crisis. The study also found that 37% say they will have less takeaways than they used to have, 29% say they will visit restaurants less, 19% say they will drink less alcohol and 25% say they will switch to going to cheaper restaurants and pubs.

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Chancellor Rishi Sunak has hinted he could provide more help for households struggling with soaring living costs.  Current measures will see a £400 discount on all energy bills, part-funded by a windfall tax on oil and gas company profits.

Inflation:

Chancellor Rishi Sunak has claimed that the new measures’ impact on inflation will be ‘much less’ than one percentage point. The IFS’s Johnson told BBC Radio 4 ‘I think the biggest risk here is that the Chancellor will be tempted to do this again and again and I think if that happens then we really could be in for a bit of trouble.’

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Various Eateries boss Hugh Osmond has told that Mail on Sunday that the price of eating out could be about to ‘soar in the coming months.’ He says the price of some food products are up by as much as 30 per cent. He says the cost of buying chicken and fish from suppliers has gone ‘bonkers’.

The RAC reports that average petrol prices have hit a new record high of 171.1p a litre with diesel at 181.6p a litre. It calls for a reduction in tax on fuel saying ‘while the chancellor chose not to intervene on fuel prices earlier this week, drivers continue to pay around 30p a litre in VAT alone.’ It adds that it ‘seems very unfair that the Treasury should benefit so significantly at the expense of hard-pressed motorists who are struggling to make ends meet because of sky-high pump prices.’

Other news:

The Night Time Industries Association and the UK Door Security Association have reiterated their view that a shortage of door staff will restrict opening hours for late-night venues. The bodies report that some 75% of members surveyed say that security staff shortages were impacting on their ability to trade.

COMPANY NEWS:

Comptoir Group, which currently owns and operates some 21 restaurants with a further 4 under franchise, has reported full year numbers to end-December saying that group revenue was up by 66.9% at £20.7m with adjusted EBITDA of £6.4m, up 3.5x on 2020’s Covid-impacted £1.4m. The reported PBT is £1.5m compared to a loss of £8.1m in 2020. Although less badly hit than 2020, the year just reported was still impacted by Covid. The company says it had ‘all sites closed from 5 January 2021 for indoor dining, [and they] re-opened in April 2021 for outdoor dining and dine-in from May 2021.’ The company says ‘net cash and cash equivalents at the period end of £9.9m (31 December 2020: £7.8m).’

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Documents filed for collapsed restaurant chain Jamie’s Italian show that the celebrity chef himself was able to recover some £2.4m from the business after it went into administration. Interpath says that Mr Oliver spent some £25m trying to save the chain in 2019.

Eurovision runner up Sam Ryder was on hand to welcome guests at an opening party for Soho House’s latest venue in Brighton.

The Times reports that ‘Just Eat Takeaway’s sale of Grubhub has been thrown into disarray as bosses prepare for a multibillion-pound write-down on the US business in what could go down as one of the tech sector’s most disastrous deals.’

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Deliveroo. The Times comments on a broker’s not suggesting that Deliveroo’s lack of profitable trading means that its name “scans unfavourably.” The broker points out that the ambition to turn a profit only from 2024 means that there is ‘limited scope for outperformance in the short term.’ See our many earlier comments and our current Question of the Week. Both Deliveroo and Just Eat finished Friday trading lower in what was otherwise a strong market.

Luckin Coffee reports Q1 net revenues of RMB2.4bn ($379.3m) and operating income of RMB16.1m (US$2.5m). The results marked the Chinese coffee chain’s first quarterly profit since the company was founded in late 2017. Luckin Coffee reported 556 net new location openings in the first quarter, ending the period with 6,580 sites, 4,675 of which are self-operated stores and 1,905 franchised.

The MCA reports that Lemon Pepper Holdings, the master franchisee of Wingstop UK, has secured a multi-million pound debt facility from Barclays to help facilitate the continued roll out.

HOLIDAYS & LEISURE TRAVEL:

Travel delays:

Getting back to ‘normal’ has been more problematic that the outbound tourist industry would have liked. The BBC says ‘more than 30,000 people face disruption to their half-term travel plans over the next week, after airlines cancel dozens of flights.’ It follows with a series of cautionary stories that may not do much to boost holiday demand.

EasyJet, which is to cancel more than 200 flights over the next 10 days, says ‘we are very sorry for the late notice of some of these cancellations and inconvenience caused for customers booked on these flights, however we believe this is necessary to provide reliable services over this busy period. Customers are being informed from today (Friday) and provided with the option to rebook their flight or receive a refund and can apply for compensation in line with regulations.’

Sky also carries stories of ‘hellish’ experiences at Gatwick. Tui has apologised regarding lengthy flight delays this week. Some holidaymakers had reportedly been forced to wait for more than 40 hours for a flight from Cardiff airport to Zante.

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CEO of Dnata Travel Group, Alisa Pollard, says she is optimistic about the future following a strong rebound in the market as demand returns.

The Caterer reports that Craig Bonnar has stepped down as chief executive of Travelodge due to personal reasons, with former chief financial officer Jo Boydell replacing him in the role.

OTHER LEISURE:

The Telegraph reports that a legal battle could stop the National Lottery from operating for the first time in 30yrs. Camelot, which has operated the lottery since it started in 1994, has lodged an appeal against its loss of the franchise.

The CMA  has launched a second investigation into Google’s practices in advertising technology. The watchdog said it is investigating whether Google has broken the law by restricting competition in the digital advertising technology market. 

FINANCE & MARKETS:

Shanghai authorities have announced that some Covid-19 lockdown measures are to be lifted from this Wednesday.

Sterling barely changed at $1.2646 and €1.1753. Oil higher at $119.95. UK10yr gilt yield down some 6bps at 1.92%. World markets better on Friday & London set to open up around 18pts as at 6.30am.

FORTHCOMING NEWS:

This is both a short and a quiet week. Very few companies have inked in announcements. We have Comptoir’s full year numbers today and Sportech’s AGM on Tuesday and that, at the moment, is about it.

The following week (beginning 6 June) is only a little more active with City Pub Group holding its AGM on the Wednesday and Fuller’s full year numbers on the Thursday.

RETAIL WITH NICK BUBB:

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