Loungers, sales v margin, World Cup, delivery, H Chocolat, hotels etc.:

A DAY IN THE LIFE:

So, December starts today and, from this moment on, it will become more difficult by the day not to put the tree up, not to wear tinsel when eating at the dinner table and not to be permanently humming something that you would rather not be associated with like The Frog’s Chorus or, ugh, Mistletoe and Wine.

And on that subject, whilst A Fairy Tale of New York is just about acceptable and singing something by Slade or Wizzard, double-ZZ, is pretty much mandatory every day this month, something by Jona Lewie most definitely isn’t and may get you the instruction to ‘leave the building immediately and do not use the door’.

Anyway, it’s the season to be jolly and that was me doing my best at stupid o’clock on a cold and dark morning. On to the news:

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LOUNGERS H1 NUMBERS – SALES GOOD, MARGINS SHARPLY LOWER:

Loungers has this morning held its H1 Analysts’ Meeting for the 24-week period to 2 Oct 2022 and our comments thereon are set out below:

Trading & pricing: Loungers reports revenue up from £102.4m last year to £122.3m. Revenues are up by 53.2% in total against H1 FY20, the last H1 period not impacted by Covid. It adds that its ‘headline three-year LFL sales growth of +17.0% is testament to the strength of our brands and our teams.’ The company said the next round of price increases would come in April/May next year, saying it will have to take a bit of price. LGRS said that its regional ‘price banding’ strategy hadn’t seen any negative impact on demand. In October, LGRS moved a few sites between bands for the first time and reported that it ‘saw no negative impact at that time’.

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PUBS & RESTAURANTS:

World Cup:

A Sunday match matters. The Welsh may be coming home but England won its group and the team will play Senegal at 7pm on Sunday 4 December. That is beneficial to the wet-side of the on-trade as it adds a drink occasion to what would otherwise be a quiet evening…

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The Oxford Partnership reports that the England Wales match saw some 9.2 million pints sold across the UK in the on-trade…

Delivery.

Foodservice analyst Peter Backman has commented on the market for food delivery globally saying that ‘seven delivery companies accounting for 50% of global restaurant delivery (80% excluding China) measured at GTV.’ These companies have announced their latest trading figures in the last few weeks. He says the numbers ‘tell a story of a slowing market…’

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Other news:

Covid fraud. The HMRC has said that fraud across three COVID-19 schemes totalled £4.5bn. It estimates that only around £1.1bn will be recovered…

The consumer. The Social Market Foundation has reported that, if energy support is withdrawn in the spring, some 7 million people will face fuel poverty if average heat and light bills remain at £3,000…

The BRC reports that food inflation rose to 12.4% in the year to November, up from 11.6% in October. The increase was driven by meat, eggs, dairy and coffee prices climbing particularly sharply. The prices were in turn driven by the rocketing cost of energy, animal feed and transport.

COMPANY NEWS:

Hotel Chocolat says there is ‘a range of outcomes’ for the full year to June 2023 & charges £30.4m of exceptional items to the P&L…

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The Azzurri Group, owner of ASK Italian, Zizzi and Coco di Mama, reports revenue up £119m YoY to £235.9m in its full year accounts. EBITDA increased by £19.6m from last year to £25m, with profit for the financial year of £2.7m. The company launched loyalty schemes at ASK and Coco, with 40+ Zizzi kitchen upgrades during the year.

In partnership with Ringtons Tea, the Inn Collection Group is inviting over 65s to use the pubs as a warm space alongside a special offer on hot drinks in a campaign named ‘WINNter Warmers’.

Loungers’ shares closed yesterday little changed on the back of the report of the company’s H1 numbers. Margins were sharply lower but the press seems to have concentrated on strong sales, on growth (Co will ‘not rest on its laurels’ – The Times) and on Brightside (‘Little Chef Revival’ – Daily Mail etc).

Little Caesars Pizza has announced that it plans to open its first UK store in December, located in Derby. The company is the third largest pizza chain in the world and currently operates in 27 countries and territories. The Derby site will be followed by two stores in London and a store in Liverpool early next year.

HOLIDAYS & LEISURE TRAVEL:

HVS has reported that UK hotel rates have risen by around 0.75% above inflation. It says ‘hotels have successfully passed on increases in costs directly to consumers, with ADRs outpacing inflation over the long term.’ It says ‘this tendency held true even during the 1970s when inflation rose from 9% in 1973 to a peak of more than 24% in 1975, effectively shielding hotels from inflationary pressures…’

Hilton is to open Motto by Hilton units in the UK.

Dalata Hotel Group has opened its 50th hotel, Clayton Hotel Glasgow City, creating 100 jobs locally.

Hotelbeds expects growth of 30% above this year’s levels over the next 12 months as it predicts ‘revenge travel’ will continue to gain momentum next year. This prediction comes despite consumers facing a severe cost of living crisis. The company also claims that people are  taking advantage of hybrid and remote working to combine business with pleasure.

Cruise.co.uk MD Tony Andrews has stated that cruise prices will ‘remain at the same price as an equivalent sailing a decade ago’ despite high inflation. Andrews said ‘Next year we can really showcase the amazing value of cruise against other holiday types.’

Security staff for the Eurostar train service who are members of the RMT union are set to strike on the 16, 18, 22 and 23 December in a dispute over pay. The union said the strike would ‘severely affect’ services.

The US Travel Association has warned that excessive wait times for visas was compounding a worsening economic outlook and meant that international arrivals to the US will fail to surpass pre-pandemic levels until 2025. The group’s biannual forecast shows a significant downgrade in international inbound travel for the rest of 2022 and 2023.

OTHER LEISURE:

The European Union has reportedly said it will ban Twitter unless Elon Musk abides by content moderation rules.

Frontier Developments reports that ‘as planned, David Gammon has retired from the Board after serving a full term as Chairman since joining in February 2012. David Wilton, who joined the Board on 22 September 2022 as Chairman designate, has stepped up to the role of Chairman, as planned. These changes are effective 1 December 2022.’

FINANCE & MARKETS:

Governor of the Bank of England Andrew Bailey has told the House of Lords economic affairs committee that former chancellor Kwasi Kwarteng had broken with tradition in not briefing the Bank as to the contents of his disastrous mini-Budget….

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Flash estimates of inflation in the Eurozone suggest that it has fallen (albeit only from 10.6% to 10.0%) for the first time since the middle of last year…

The US Fed has hinted that it will moderate the pace of its current round of interest rate rises.

Sterling up at $1.2102 and €1.1585. Oil price higher at $86.37. UK 10yr gilt yield up 4bps at 3.16%. World markets better yesterday and London set to open up around 22pts as at 6.30am.

RETAIL WITH NICK BUBB:

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