Langton Capital – 2022-07-12 – Costs, consumers, Restaurant Group, Hostelworld, Heathrow etc.:
Costs, consumers, Restaurant Group, Hostelworld, Heathrow etc.:A DAY IN THE LIFE: Having just come back from a few days in Wales, it’s clear that inflation is causing some distortions in hospitality. Because some operators have embraced inflation as an opportunity to jack up prices, whilst some others don’t appear to have noticed that costs have risen or, if they have, then they must have been staggeringly cheap only a few weeks ago. Anyway, pie & chips might set you back £9.95 in one pub and £14.95 in its neighbour. Burgers were still to be had for a tenner but anything with a bit of lamb in it might be £15, £16 or £17. Fish & chips is no longer a cheap dish and some operators seemed to be struggling to put anything on the menu much below £20. We paid £3 for iced creams and £3.65 for a coffee but, just before we lost faith in humanity altogether, we found beers at £3.50 and £4 a pint and a really nice minted lamb pie in Dolgellau for around £13. Anyway, it’s a minefield out there and, to anyone who might still refusing to throw out BHS clothing because it hasn’t yet physically dropped to bits, it’s all getting a bit tricky. On to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories are in the Premium Email. Reply to this email if you would like to upgrade. Prices for the Premium at time of writing are £345 for one subscription, £595 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option HERE RESTAURANT GROUP – BUYS BARBURRITO, FIXES RATES ON SOME DEBT… The Restaurant Group has this morning announced that acquisition of Barburrito alongside comment on its early debt facility repayment and the purchase of interest rate caps. Acquisition: RTN announces that it has bought Barburrito Group for £7m in cash. RTN updates, saying that it has chosen to ‘repay a further £44m of its term loan’ and ‘has purchased interest rate caps…’ • See premium. Reply to this email to upgrade. PUBS & RESTAURANTS: The Consumer: Barclaycard has reported that around nine in 10 UK adults say they are worried about the impact of rising household bills… • See premium. Reply to this email to upgrade. Where might consumers save money? The current environment (Brexit, Covid, Ukraine) is unique but, if consumers find their real incomes falling, as they will, what could they cut back on? Big ticket items, subscriptions and perhaps top end dining come to mind… The BRC has said that retail sales are now falling at a rate “not seen since the depths of the pandemic” as a result of the consumer squeeze. It says people are cutting back ‘against a backdrop of unprecedented price rises on the High Street’. See Nick Bubb. Costs continuing to rise. Whilst the fuel cap has been hiked already and it will go up again, the Citizens’ Advice Bureau reports that UK households will pay an extra £164 a year for fuel through their bills to pay for collapsed energy suppliers… Ofgem CEO Jonathan Brearley has told MPs, that earlier estimates for winter bills now looked too low. The cost could rise in October by nearer to £1,200 than the £800 originally estimated… Governor of the Bank of England Andrew Bailey has reiterated his view that inflation will fall sharply next year. He says that inflation should be back to its 2% target in two years’ time… Food company Arla Foods has warned that dairy shortages (likely to be accompanied by higher prices) are likely as a lack of workers is causing farmers to cut production. Licensing Act scrutiny. UKH has responded to the new House of Lords select committee follow up report on the Licensing Act 2003… Footfall: Springboard has updated on footfall and, for the week to 9 July, it says it is down 0.1% on last year and down by 3.8% on 2019… Looking on the bright side: Foodservice analyst Peter Backman interviews industry veteran Ian Neill… COMPANY NEWS: Brew York is set to open its fourth venue this week, a tap room at its brewery in Osbaldwick. The Times notes that ‘the Scottish company behind the fast-growing German Doner Kebab [is]…eyeing up a public listing in New York as part of its global expansion plans’. The Times considers that the merger between Dufry, the Swiss duty-free shopping group, and Autogrill, the Italian café and restaurant operator, which will create the world’s largest travel stores business, could be a threat to SSP. HOLIDAYS & LEISURE TRAVEL: Heathrow yesterday reported traffic stats, apologised for cancellations and asked airlines to but another 61 flights from Monday’s schedules… Aslef train drivers have voted to strike later in the summer. Hostelworld Group has updated on trading… Quoting Barclaycard data, Travel Weely reports ‘the travel sector defied growing cost of living pressures last month as consumers continued to book summer holidays’. Pragma consulting comments on the cruise industry, which saw an 80% decline in capacity during the pandemic, saying that ‘despite those setbacks, the industry is forecast to fully recover by 2023.’ OTHER LEISURE: Shares in Twitter fell yesterday on the back of Elon Musk’s comment that he is pulling out of the $44bn deal to buy the platform… FINANCE & MARKETS: With a dozen or so hopefuls in the running to head the Tory Party (and the government), the Bank of England is presumably unable to formulate policy as it will be as unaware of what it is as the rest of us. Given the stronger than expected payroll numbers in the US on Friday, a 75bp interest rate rise is now said to be a virtual certainty later this month. Sterling has fallen to a two year low against the dollar on a mixture of dollar strength (the Fed is raising rates faster than other central banks) and concerns over political instability in the UK. Sterling mixed at $1.1862 and €1.1848. Oil lower at $105.23. UK 10yr gilt yield down 6bps at 2.16%. World markets lower yesterday. London set to open down around 31pts as at 6.30am. FORTHCOMING NEWS: A bit of life this week before the pace of announcements busies up later this month. Hostmore updated on H1 trading yesterday and Pepsi updates today. Loungers reports full year numbers on Wednesday and JD Wetherspoon comments on full year trading also on Wednesday. DP Poland hosts its AGM on Friday. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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