Saga, demographics, coffee, the consumer, Club Med & other:

A DAY IN THE LIFE:

I was giving one of the hawthorn trees in the garden something of a haircut at the weekend and, at the end of the job, I noticed that it had very few thorns.

At least fewer than would normally be the case because an untold number of them seem to be stuck in my hands.

And many others appear to be adorning my clothing awaiting their chance to pierce flesh not least one or two of the half inch long monsters projecting from the soles of my shoes.

So here’s the question (he asks typing with only two or three uninjured fingers), why do they have to have thorns quite that nasty?

Anyway, it’s the first of a series of short weeks in April & May this week. And we have a slightly shorter email than usual due to holidays etc, but let’s nonetheless move onto the news:

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DEMOGRAPHICS MATTER:

Below a piece sent to clients before Christmas but which still resonates given the uneven way in which the cost of living crisis is impacting consumers:

Summary: An economy comprises the myriad bits that make it up. It is possible for the economy to do ‘well’ whilst virtually everyone in it is less well off. And vice versa, of course but, whilst the above would be uncommon, for example if a series of billionaire oligarchs syphoned off the nation’s wealth and deposited it overseas, what is much more common is for some elements of the economy to be moving one way financially whilst others move in the opposite direction….

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PUBS & RESTAURANTS:

Commenting on hospitality sales, S4 Labour says that March saw a 1.8% fall in LfL dales. It says ‘overall March sales show a decline of 1.8% compared to 2022, albeit with a 6.4% uplift in London despite rail strike disruption….’

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Research from KPMG suggests that 55% of UK consumers have cut back on non-essential spending, citing the cost of utilities bills as the main reason…

World Coffee Portal’s Project Café Europe 2023 reports that the total European branded coffee shop segment grew by 3.3% over the last 12 months to reach 42,804 outlets, with 76% of operators surveyed reporting sales growth…

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Recruitment firm Hays has found that a third of employers are more likely to consider cramming a week’s work into four days if staff came back to the office to kick off the week. Last week the Lloyd’s of London boss John Neal said there will be times when staff ‘have to be in every day of the week’ and has said the Square Mile needs to ‘get Monday back.’

COMPANY NEWS:

Megan’s Restaurants reported revenue up 193% YoY to £22.7m in the year to 31 March 2022. Adjusted EBITDA rose to £4.1m from £1.7m in 2021, with an operating margin of 17.8%. The restaurant and café concept opened five new sites during the year, with a pipeline of a further 10 locations in place outside London.

Fine wine merchant Lay & Wheeler reported revenue up 9.9% YoY to £27.1m for the year ended 28 March 2022…

McDonald’s is reported to be temporarily closing its US offices this week ahead of an expected announcement on job losses. The cuts are said to be a part of a wider company reorganisation announced in January.

Gusto Italian’s new Spring/Summer menu has been designed to reflect a continued rise in consumers seeking meat-free menu items and mindful drinking options.

HOLIDAYS & LEISURE TRAVEL:

Saga PLC has reported full year numbers to 31 Jan 2023 saying that revenues rose to £581.1m from £377.2m in the prior year and that the group returned to underlying profit of £21.5m from a loss of £6.7m in FY22. The company is reporting a loss before tax of £254.2m against a loss of £23.5m in the prior year…

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Club Med has reported full year numbers showing revenues up by 100% to €1.7 billion. Operating profit was some €98 million. The company welcomed over 1.3 million customers to its resorts. This equates to 88% of the 2019 figure (up 64% on 2021)…

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European commissioner for transport, Adina Ioana Valean, told the Airlines for Europe summit in Brussels that ‘We are out of the crisis, but we are not out of the woods. The good news is travel is up and likely to reach 95% of the 2019 level this summer. The bad news is this will only increase the risk of delays as the skies become more crowded.’

FINANCE & MARKETS:

The S&P Global /CIPS UK Manufacturing PMI fell to 47.9 in March, down from February’s seven-month high of 49.3 and an earlier flash estimate of 48.0. Analysts said although the data allowed room for optimism the manufacturing sector was ‘not out of the woods just yet’ although March’s PMI suggests that the downturn now is bottoming out.

The oil price surge on the back of production cuts has led to worries that the fight against inflation could be prolonged. This in turn has led to concerns that interest rates may have be stay higher, for longer, than originally envisaged.

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