Trading, food prices, general inflation, flight disruption, Goals & other:

A DAY IN THE LIFE:

I bought a new Stanley Knife the other day and was interested to see that the blades weren’t set up and had to be accessed from the handle and fitted manually.

This was to guard against idiots injuring themselves, presumably but, after I unscrewed the handle and watched everything ping out and roll around the floor a bit, I realised that I was perhaps the idiot they had in mind and, to anyone watching me try to set the thing up thereafter, I quite likely looked like a walrus trying to play the violin.

While wearing boxing gloves and without a violin, in fact but, after twenty minutes or so I had got the thing set up and, after taking a bit of time to bandage up my various cuts, the knife, I am pleased to report, worked fine.

Anyway, with the wistful and diminishing thought that it would be easy to get used to these four day weekends, let’s move on to the news:

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QUESTION OF THE WEEK?

Question of this week:

We’ll run this one on because it was such a short week, last 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:

Trade:

Whilst this will clearly have been overtaken by events, UK Hospitality, the British Institute of Innkeeping (BII), the British Beer and Pub Association (BBPA) and Hospitality Ulster say the extra £2bn of trade from the Platinum Jubilee weekend is almost £400m more than pubs, bars, restaurants and other hospitality venues could expect to earn during a normal Thursday to Sunday in May.

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CGA’s latest Drinks Recovery Tracker shows average sales by value in Britain’s managed venues in the seven days to Saturday (28 May) were 13% behind the same week in 2019. It says ‘the figure is skewed by the absence of a Bank Holiday Monday this year. However, positively average value sales were +5% ahead of the previous week’s results, and the…double Bank Holiday ahead of the weekend should help to recover at least some of the sales that were missed last week.’

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S4Labour reports that the month of May saw hospitality sales up by 10% on 2021 levels. Given that the UK was coming out of its third lockdown around a year ago, that is perhaps not surprising. S4Labour says ’wet-led sales were up 16.5%, while dry-led sales were still up but by a smaller 4.5%.’

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UKH CEO Kate Nicholls has told The Mail on Sunday that more than 10,000 pubs and restaurants are at risk of closure due to ‘perfect storm’ of inflation and surging energy costs. She says that the hospitality sector is facing ‘as big a crisis, if not bigger’ than during pandemic. Ms Nicholls estimates that some 20,000 hospitality businesses are still operating below break-even.

Tube strikes today (Monday) will do little to boost trade. Many TfL stations are likely to be closed, especially those in central and south London.

Food prices:

The Evening Standard quotes the BRC as it maintains that food price inflation is “likely to get worse before it gets better” over the coming months ‘as the cost of living crisis shows no sign of abating with the steepest rises in goods for a decade.’

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The Daily Mail has reported on ‘fury as Costa Coffee increases drinks prices for second time in six months with average of rise of 14p.’ It says ‘drinks such as a flat white have increased in price from £2.95 to £3.30’ and adds ‘the price increases were introduced on June 1, worsening the cost of living crisis.’

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COMPANY NEWS:

BrewDog CEO James Watt has commented on LinkedIn: ‘We’ve started 2022 well. Our bars are delivering record sales so far this year, and though like all our peers we are facing rising costs, we are well placed to weather this challenge in particular as our new anaerobic digester plant in Ellon comes on stream and we become fully self-sufficient in our gas requirements by using our waste to generate green gas to power our brewery’.

RedCat Pub Company has acquired two major hospitality venues on the North Norfolk Coast; The Pheasant Hotel and Blakeney Manor Hotel, bringing The Coaching Inn division to 28 pub hotels.

Chopstix has partnered with Haven Holiday Parks, bringing their Pan-Asian offering to holiday park guests with plans to roll out across the Haven estate later this year.

The Sunday Times reports that the founder of Grubhub had earlier teamed up with US private equity company General Atlantic in an attempt to buy back the company he sold to Just Eat Takeaway for $7.3 billion last year.

The BBC reports that Camden Market has been put up for sale by its owner, Teddy Sagi.

Parsley Box Group last week reported that ‘for the 5 months ending 31 May, the adjusted EBITDA loss is circa 10% better than management expectations, with losses reduced by circa 44% from the prior year.’ It said that ‘sales for the 5 months ending 31 May 2022 are circa 11% below management expectations.’

HOLIDAYS & LEISURE TRAVEL:

Ongoing flight problems:

Transport Secretary Grant Shapps has claimed that airlines and operators have ‘seriously oversold flights and holidays’ relative to their capacity to deliver. It would seem from the headlines that problems persisted throughout the half-term holiday week. Mr Shapps says he would meet with airports, airlines and ground handlers to ‘find out what’s gone wrong and how they are planning to end the current run of cancellations and delays’.

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Finger pointing. Aviation industry leaders say the government must take its share of responsibility for the challenges facing the sector after failing to support the industry fully during the pandemic. Jet2 chief executive Steve Heapy said ‘I think government ministers need to realise that, because of the pandemic and the actions that were taken, they’ve made the travel industry not a very attractive one to work in. It was the first industry to go into lockdown and the last industry to come out.’

As the half term holiday period drew to a close, airlines including Easyjet and Wizz Air were cancelling more flights. Easyjet cut 80 flights on Sunday. It said ‘we are very sorry and fully understand the disruption this will have caused for our customers. We are doing all possible to fly them as soon as possible to their destination.’

Travel intentions:

An Ipsos survey has revealed that 63% of Brits said they had no plans to travel outside of Europe in 2022, while nearly half (47%) said the same for travelling within the continent. Almost half (49%) of Brits cited financial concerns as the main reason for not wanting to travel, while around one in seven said airport and port delays were putting them off.

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HotStats reports on global hotel performance saying that it remained widely steady, if not getting better, in April, with increases in both the top and bottom line despite the inflationary macro environment. In the US, April gross operating performance per available room (GOPPAR) hit $96.08, which was 92% back to where it was pre-pandemic. Europe is seeing a continual performance rise in its metrics, with GOPPAR up to €40 in the month, around €11 off its pre-pandemic number.

Carnival Corporation president Arnold Donald told Travel Weekly that next year could surpass 2019 in terms of booking volumes and pricing, leading to a potentially record-breaking year for the cruise industry.  Donald said ‘We’ve now seen record booking days for Carnival and Cunard in the UK’.

The Marriott hotel chain has announced it will cease operations in Russia after 25 years of activity in the country.

OTHER LEISURE:

Sky reports that Goals Soccer Centres, one of Britain’s biggest operators of 5-a-side football pitches, is to be sold to its management team. It says that Inflexion Private Equity, which bought the business in 2019, has struck a deal to offload the company that could be announced within days.

Tesla shares were weak on Friday after CEO Elon Musk said that he had a ‘super-bad feeling’ about global growth prospects. He has said that he will need to cut 10 per cent of jobs at the electric car-maker.

Gfinity has announced that it has extended its relationship with Formula 1 for a further yea. CEO John Clarke says ‘the F1 Esports Series presented by Aramco is one of the most exciting esports tournaments in the world. We are delighted to continue to work with Formula 1 to deliver an expanded 2022 programme.’

COO Sheryl Sandberg has announced, on Facebook, of course, that she is to leave the company after 14 years.

FINANCE & MARKETS:

The S&P Markit PMI for UK Manufacturing in May has reported that growth eased in the month from 55.8 (in April) to 54.6. The result is the same as the Flash Estimate last month. The sector remains in growth but this is the lowest figure since last October.

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The Institute of Directors has reported that directors’ economic confidence has been ‘hit by inflation and Brexit’. It says ‘business leaders are growing more anxious about the economic outlook, as they grapple with rising costs and the UK’s new trading relationship with the EU.’ The measure fell to minus 45 in May from minus 36 in April. This is the lowest reading since October 2020.

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The Nationwide house price index for May showed that house price inflation slipped from 14.3% in March and 12.1% in April to 11.2% in May.

The Telegraph quotes some property agents as saying that price reductions across the housing market are becoming more common. It headlines ‘property sellers slash asking prices by a fifth as market slows.’

The US Labour Department announced on Friday that US employers added more new jobs than expected in May. No changes to forecasts but analysts believe that this makes further interest rate rises all but certain.

Sterling weaker since last reported (on Wednesday 1 June) at $1.2495 and €1.1648. Oil higher at $120.42. UK10yr gilt yield up 3bps at 2.15%. World markets lower on Friday but London set to open around 53pts higher as at 6.30am.

FORTHCOMING NEWS:

Back to work for a full week but, with companies not apparently keen to report so soon after the double-Bank-Holiday, there’s not a great deal going on. City Pub Group is holding its AGM on Wednesday and Fuller’s full year numbers will be reported on Thursday.

RETAIL WITH NICK BUBB:

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