Queen’s funeral, Fuller’s, Tasty, TUI, Hawksmoor, HM Gov, trading etc.:

A DAY IN THE LIFE:

A short week given the Bank Holiday yesterday and, after the historic events, attention for most of us will swing back to the mundane but important struggle to pay the mortgage, keep the lights turned on and still manage to have enough left over to buy something to eat.

Rather than go off on one regarding the above, which we did in our first draft, let’s consider a few phrases and words that litter our language.

If we said, this was a watershed moment that could herald a sea-change in attitudes and that the search was on for a bellwether stock or industry in order to judge sentiment, we’ve uses three well-known words or phrases – but, whilst we know what they mean, do we really know how they came about?

They’re easy enough to Google, of course, but a) which one is Willy Shakespeare responsible for (rather ghoulishly), b) which one involves animals and c) which one relies on gravity to produce an answer?

Anyway, enough of that. Don’t get us started on the etymology of the likes of ‘whipping boy,’ ‘scapegoat’ or the like. On to the news:

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THE QUEEN’S FUNERAL:

Please let us know how trading was, is and might be. We’ll collate feedback (without attribution) and comment tomorrow briefly in the free email and in more detail in the Premium and for those kind enough to let us know how they are getting on.

What we know (or believe) so far:

Amidst stories of £1,500 hotel rooms and packed trains, there could be a little disquiet. Whilst the Evening Standard reported (ahead of yesterday’s services) that ‘London is set to see a “huge increase” in hotel bookings and hospitality demand as visitors flock to the city ahead of the Queen’s funeral’, we’d suggest that a) London is not the UK as a whole and b) the above was yesterday, what about tomorrow?

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PUBS & RESTAURANTS:

Government

As mentioned, the mini-Budget on Friday will mark a return to current ‘normality’ with the delivery of Liz Truss’ promised tax cuts. Chancellor Kwasi Kwarteng should give further details of energy price support and may set out the costs. The scheme, which would mean a typical household energy bill would cost around £2,500 annually until 2024, could cost up to £150bn.

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Consumer spending (ability & intentions):

PwC reports that UK workers are facing a £1,400 hit to their real wages by the end of 2022 as inflation rises…

Elsewhere, Suren Thiru, Economies Director for ICAEW, adds to the news-flow, warning that a perfect storm of growing input costs for businesses, eye-watering energy bills and persistent supply constraints means that inflation could peak higher and later than the Bank of England predicts.

The Resolution Foundation says that new PM Liz Truss’s energy bailout plan will disproportionately benefit wealthier households…

Trading:

CGA Nielsen’s Drinks Recovery Tracker reports that ‘drinks sales dip again as cost crisis mounts.’ It says ‘after a flurry of late-summer trading, Britain’s drinks sales have dropped back below the levels of recent years in early September…’

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Insolvencies:

August saw 1,933 registered company insolvencies across England and Wales, an increase of 43% on the prior year and 42% higher than 2019 levels. The overall increase in company insolvencies has been due to a higher amount of CVLs. This trend has been apparent over the last few months since March.

Retail sales, sterling & interest rates:

The larger than expected 1.6% drop in MoM UK retail sales volumes prompted fresh concerns over the state of the economy, with the pound falling to a new 37-year low against the US dollar. Some analysts suggested retail figures showed the UK is already in recession.

Other news:

Trading in the US. Black Box Intelligence reported that US restaurant sales and traffic growth rebounded last month thanks in large part to an increase in consumer confidence…

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The FT reports that inflation has ‘killed off hopes for a return of the plant-based meat boom’. It suggests that affordability is now at a premium.

COMPANY NEWS:

Fuller’s has updated on trading saying ‘sales continue to rebuild from the impact of the pandemic with total sales in the first 25 weeks of the financial year up 3% against pre-pandemic levels and up 50% on the same period last year. On a like for like basis, sales for the 25 weeks to 17 September 2022 are 21% up on last year…’

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Tasty produced H1 results yesterday, a Bank Holiday. The Times reports this was as a result of advice from Cenkos, its broker. The company reports H1 revenue of £21.5m, up from £11.6m in the prior year and underlying EBITDA of £2.7m vs £0.8m. The loss before tax was broadly unchanged at £2.7m in each half year. The loss per share was 1.9p in each of the half years…

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The Mail on Sunday reports that Pret CEO Pano Christou ‘wants to take chain global like his former employer [which was McDonald’s]…

The Daily Mail reports that ‘steak restaurant business Hawksmoor in early stages of being put up for sale, according to City sources…’

HOLIDAYS & LEISURE TRAVEL:

TUI has updated on 12mth trading (ahead of its FY announcement in December), saying that the summer is ‘set to close in line with our expectations.’ It says that ‘later booking pattern continues into Winter.’ TUI says ‘Q4 [is] expected to deliver further strong progress’ with ‘Hotels & Resorts set to deliver its 5th consecutive positive quarter.’ It says ‘Cruise and TUI Musement are showing ‘significant improvement’ and Markets & Airlines are ‘significantly profitable despite airport disruptions.’

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Having gained some adverse publicity for its shut-open-shut comments regarding its parks on the day of the Queen’s funeral, the Telegraph reports that its accounts reveal that ‘Center Parcs was battling a shortfall of hundreds of workers at the start of the summer season…’

Monday’s funeral bank holiday saw most high street travel agents shut their doors. Travel businesses also planned to pause social media activity and marketing on September 19 to allow staff to pay their respects.

Friday’s French air traffic control strike saw Ryanair cancel 420 flights, EasyJet 76 flights and Air France only running 45% of its short-haul flights. On Monday, 15% of Heathrow Airport’s schedule will be altered during Queen Elizabeth’s state funeral.

Uber has confirmed it was responding to a “cybersecurity incident” after the New York Times reported that a hack had accessed the company’s network.

The BBC reports that drivers at 12 train companies are expected to strike on 1 and 5 October. This follows strike action being suspended following the announcement of the Queen’s death.

Trains are expected to be disrupted between Heathrow and central London today as a result of an overhead power line failure on Monday.

OTHER LEISURE:

Tencent laid off nearly all of the staff at its gaming site Fanbyte, following laying off 5% of its workforce last month after the games developer posted its first ever revenue decline last quarter.

FINANCE & MARKETS:

The World Bank has suggested that interest rate hikes by central banks around the world could trigger a global recession next year. As the central banks in question have had their eyes either wholly or mainly on taming inflation, this may well be correct…

The Telegraph reports that the number of 30-year mortgages is ballooning due to the continued rise in house prices.

The FT reports that some 40% of economists polled believed that the US Fed would have to increase interest rates to at least 4% in order to tame inflation. Some 20% of those polled believe that interest rates will peak over 5%.

The CEBR has said that ‘2023 would be a challenging year for the UK housing market.’ it says ‘we currently expect prices to fall by 4.5% on average next year, with a peak annual contraction of 6.2% expected in Q3 2023.’

Sterling down (since Friday) at $1.1427 and €1.1399. Oil higher at $92.09 and the UK 10yr gilt yield up 2bps at 3.16. Markets better yesterday and London set to catch up, somewhat, at up 29pts as at 6.30am.

FORTHCOMING NEWS:

This week sees TUI report H1 numbers and City Pub Group also report June H1 figures. Ten Entertainment and Cineworld also report H1 numbers and Games Workshop hosts its AGM. Carnival updates on Friday.

In the world of statistics & economics, the Fed opines on US interest rates on Wednesday (75bp rise baked in) and the Bank of England speaks on Thursday, where a 75bp rise is entirely possible. GfK updates on UK consumer confidence on Friday.

RETAIL WITH NICK BUBB:

Nick is taking a well-earned break.