Elasticities, inflation, Scotland, trains, energy costs, CINE, Heineken etc.:

A DAY IN THE LIFE:

We got turfed out of the house for a night at the weekend so that teenaged daughter could have a get together.

More fool us, perhaps, but the word ‘party’ wasn’t used and little damage was done and we got the chance to book into a pub in Old Malton at short notice for the very reasonable price of £70 bed & breakfast for two.

And the evening meal plus a round of drinks cost us £32.95.

All good stuff. A pint and a half of bitter set us back £5.50 but it was a land of contrasts as a couple of coffees in the town the following morning cost a much less reasonable £7.50 – yes, £3.75 each – and the sausage rolls (albeit venison and pheasant) set us back £2.75 each.

Still, not bad overall, there’s value to be had.

Anyway, Hull City’s lurch up the table has been suffering from a bout of vertigo and on Saturday we were reportedly lucky to get nil. Better luck to us this coming Friday. On to the news:

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PUBS & RESTAURANTS:

Outlook for cost inflation:

AlixPartners has commented on the outlook for cost inflation saying the impact of the war in Ukraine and increased trade friction means that companies will likely need to continue passing on price increases to customers. Partner & MD Anna del Mar says ‘in 2023 consumer businesses will need to be sharper and faster…’

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Supply issues:

Tom Bradshaw of the NFU has said that the shortage of some fruit and vegetables in UK supermarkets could be “the tip of the iceberg.”. Former environment minister George Eustice says that the shortages will last for three to four weeks.

Scotland:

The Society of Independent Brewers (SIBA), Wine and Spirit Trade Association (WSTA), Scotch Whisky Association (SWA), and Scottish Wholesale Association (SWA) have suggested that the cashflow measures announced for the Deposit Return Scheme don’t go far enough…

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UKH Scotland Executive Director Leon Thompson has said the upcoming change in first minister north of the border represents an ‘opportunity to build a genuine partnership with Scottish hospitality, for the benefit of the economy…’

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Price elasticities:

Companies may be testing price elasticities or, put more crudely, they should be seeing what they can get away with, albeit often after the provision of a ‘better’ service or product . Premiumisation saw…

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Trading:

UKHospitality warns of a ‘stark year ahead’ as figures show a third of businesses are at ‘risk of failure’ unless the government steps in with help. CEO Kate Nicholls said ‘The demand from the public is quite clearly there, with revenue exceeding pre-Covid levels, but there is no way venues can take advantage of this demand as they drown amidst price rise after price rise.’

Train strikes:

Members of the Transport Salaried Staffs Association (TSSA) have voted to accept pay offers by train companies, with ballots for industrial action being withdrawn. Separate disputes, however, remain between tens of thousands of RMT members at Network Rail and at the train operators.

The consumer:

Bills going up. Ofgem will announce its latest fuel price cap today. The maximum amount that an average household should pay may drop to around £3,300 from its current £4,300 as wholesale energy prices have fallen. However, the government’s subsidy to consumers will also fall on 1 April with the maximum payable under that scheme rising to £3,000 from its current £2,500.

Other news:

Stay in a Pub is spearheading research alongside CGA and Visit England. Paul Nunny, founder of Stay in a Pub, says ‘the purpose of the research is twofold: to establish profiles and behaviours of buyers, and potential buyers, of pub accommodation and to discover sector trends, insight and business challenges for pubs that sell rooms…’

Business busts. Business recovery and financial advisory firm Begbies Traynor has updated on its own business today saying ‘in business recovery, we continue to take an encouraging level of new insolvency appointments…’

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COMPANY NEWS:

Moody’s has reported that the latest share buyback announced by Heineken, of some €1 billion of its shares from Fomento Económico Mexicano, will marginally increase Heineken’s Moody’s-adjusted gross debt/EBITDA ratio. Fomento Economico Mexicano holds a combined interest of 14.75% in Heineken N.V. and its parent company Heineken Holding N.V., worth around €8 billion…

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Meal-kit delivery service Gousto has cut 14% of its headcount in recent months. Earlier this month, Sky News revealed that Gousto had sharply cut its valuation from $1.7bn after raising £50m at a ‘significant’ discount to steer it through a volatile economic period.

Leon opened sites in Earls Court and Hanover Square in the capital last week and plans to open its first restaurant in the South West soon, located in the centre of Bath. Other regional UK locations are currently being considered for further expansion.

Brewhouse & Kitchen reports LfL sales growth of 5.3% in the last quarter of 2022, with growth in all its own-brewed beer volumes, which now account for just under 50% of its total beverage sales…

Molson Coors has launched Staropramen 0.0, available in 330ml bottles for the on-trade from the beginning of March, expanding its offer in the no & low-alcohol market segment….

North Brewing Co and The Orielles have created a light, zesty 4.6% Session Pale Ale, with band member Henry Carlyle working closely with North’s designer, James Ockleford of Refold Studio, to create the artwork.

NQ64, a retro gaming bar, is set to launch its second site this year, located in London Shoreditch Old Street with a capacity of up to 450 people. NQ64 is a neon graffiti-covered bar featuring retro arcade games and classic consoles alongside game-themed cocktails and craft beers.

HOLIDAYS & LEISURE TRAVEL:

VisitBritain has launched a £9.8m campaign for 2023 to drive inbound tourism to Britain. The first phase will focus on markets where VisitBritain is seeing strong recovery including the US, Canada, the Gulf Cooperation Council (GCC) countries and European markets including France, Germany and Spain.

IAG reports operating profit of €1.2bn during 2022, up from a loss of €2.7bn the year prior, with capacity reaching 87% of 2019 levels. The company projected a further recovery in profits in 2023 to between €1.8-2.7bn, with capacity predicted to reach 98% of 2019 levels.

OTHER LEISURE:

Cineworld shares fell 43% to 2.3p on Friday on the company’s announcement that it did not believe it likely that the upcoming restructuring or sale would mean there would be cash for equity shareholder.

FINANCE & MARKETS:

Despite recent somewhat less downbeat comments from S&P and even the ONS, the CBI has reported that ‘business confidence within the service sector continued to fall in the three months to February, albeit at a slower pace than in the previous quarter…’

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Quantitative tightening: Fitch reports that asset unwinds by the Fed, the ECB, the Bank of England and the Bank of Japan will amount to some US$1 trillion in both 2023 and 2024…

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Labour leader Sir Keir Starmer has said that the Tories had put the country on a “path of decline” and if recent growth trends continued, people in the UK (per capita) would be worse off than Poland’s population by 2030. He says by 2040 would have fallen behind Hungary and Romania.

Sterling weaker at $1.1937 and €1.1323. Oil down slightly at $82.63. UK 10yr gilt yield up 17bps at 3.75%. World markets down on Friday but London set to open up around 21pts.

RETAIL WITH NICK BUBB:

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