The off-trade, food price inflation, other costs, trading, 888 & other:

A DAY IN THE LIFE:

When our daughter was born she was known, to the maternity hospital authorities if to nobody else, as Female Infant Brumby.

And, though it was a tad impersonal, it was appropriate.

And it was accurate but, as she’ll have a big birthday before too long, she’ll migrate to Female Adult Brumby, which at least accords with her real-world initials.

We’ve made it to the end of a short but not short-feeling week. Have a great weekend, the weather is on the up and let’s move on to the news:

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PUBS & RESTAURANTS:

Competition from the off-trade

With Tesco in the news after the retail giant reported full year numbers yesterday, we considered it appropriate to consider competition from the off-trade. Because, whilst hospitality industry players have to compete with each other (e.g. pubs with pubs), with similar operators (e.g. pubs with restaurants), with delivery companies and also, they have to compete with the off-trade….

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Food price inflation:

CGA by NIQ and Prestige Purchasing’s Foodservice Price Index shows that food inflation fell slightly to +20.6% YoY in February from the peak of +22.9% in December. The report suggests that food inflation will continue to fall lower during the remainder of 2023…

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Cost pressures:

UKH says that ‘with sustained inflation showing no meaningful sign of abating and price rises mounting across the board for hospitality businesses’, it is ‘urging energy regulator Ofgem to force suppliers to engage in automatic renegotiations for those businesses paying the highest costs…’

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Trading:

S4 Labour has reported that March sales overall showed ‘a decline of 1.8% compared to 2022, albeit with a 6.4% uplift in London despite rail strike disruption…’

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The Consumer:

The Bank of England’s latest Credit Conditions Survey has found that household loan defaults are rising and it believes that mortgage supply is set to weaken. It reports that banks and building societies believe the rate of defaults will “increase further” in the next quarter.

COMPANY NEWS:

Per Morning Advertiser, Brasserie Bar Co has acquired three new freeholds acquired so far this financial year with executive chairman Mark Derry saying the company has a ‘big pipeline’ of sites. The company reported ‘record-breaking’ sales for the year to 26 June 2022 of £57.5m and commented that trading has been strong in the period since.

Boxpark Liverpool is searching for ‘emerging and independent street food businesses on a regional and national scale’ to occupy its 8 kitchens. Boxpark  says it will focus on championing local independent businesses, through both its food offering and entertainment offering.

LVMH reported Q1 sales +17%, significantly exceeding analyst expectations of +8%, as China rebounded sharply after Covid-19 lockdowns. LVMH said Q1 sales grew by 14% in Asia, excluding Japan, compared with an 8% decline in Q4, with China expected to drive further growth in 2023.

M&S is to remove some t-shirts from sale after The Craft Beer Co objected to the logo ‘Proper Good Beer – Craft Beer Co.’ The Craft Beer Co tweeted ‘can we expect a royalties cheque in the post!?’

Activist investors are reported to be shaking the tree at Hostmore. Harwood Capital has increased its stake.

Subway’s sale process is proceeding as planned reports…

Heineken plans to launch Spanish lager brand Cruzcampo on draught in pubs and bars across the UK. The 4.4% ABV lager will be sold at an ‘accessible price point’.

North Brewing Co has secured £375,000 in funding from Bibby Financial Services (BFS) to expand its business internationally. The Leeds-based brewery plans to expand into the US and East Asian markets.

Tim’s China reports revenue up 57% YoY to $146.6m, opening 227 net new stores in 2022 to reach 617 outlets, 547 of which are company operated. The coffee shop operator reported an 89% increase in registered loyalty club members during the 12 months ended 31 December 2022 to reach 11.3 million, up from 8.9 million.

Indian coffee chain Barista aims to have 500 stores across the country within two years having reached the 350 milestone this month…

HOLIDAYS & LEISURE TRAVEL:

Levelling up secretary Michael Gove has announced that holiday home owners may need to get planning permission to let their properties to holidaymakers…

UKHospitality has said that the short-term lets registration scheme must be mandatory to drive real change and level the accommodation playing field….

The ETC reports that 72% of Europeans intend to travel this summer, with 40% planning to travel early-to-mid summer – June to July. The ETC said ‘This shift in seasonal travel patterns may reflect a growing desire to avoid peak crowds and heat waves’.

Haven plans to invest over £170 million in 2023 across multiple parks in the UK, building new activity and entertainment facilities, as well as an increase in new holiday homes…

Manchester airport is reported to be back to 92.5% of pre-pandemic levels with some 1.9 million passengers flying in March, up 30% on last year.

OTHER LEISURE:

888 Holdings has reported full year numbers to end-December and has updated on Q1 trading for 2023. The company says FY22 results are in line with expectations. It says revenue was up 74% at £1.24bn with an adjusted PBT down to £80.5m from £89.1m in the prior year. Adjusted EPS is 15.1p (2021: 22.2p)….

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Premier League clubs  have collectively agreed to withdraw gambling sponsorship from the front of their matchday shirts by the end of the 2025-26 season. The announcement follows a consultation between the league, its clubs and the Department for Culture, Media and Sport as part of the government’s ongoing review of current gambling legislation.

FINANCE & MARKETS:

Chancellor Jeremy Hunt has told an audience in Washington that he is “confident” the UK will do better than the poor growth forecasts predicted by the IMF.

The IMF has said that the UK’s national debt will increase each year for the next five years. It is not forecasting beyond 2028.

The British Chambers of Commerce, commenting on yesterday’s zero GDP growth number in the UK, says ‘although today’s GDP figures indicate the UK economy continues to technically avoid a recession, it’s now clear we are stuck in a prolonged period of almost no growth…’

The ONS has reported that the UK’s trade deficit with the rest of the world widened in February. Export volumes fell more than imports and the net deficit rose to £4.8bn for the month. The Times points out that the average deficit in the 2010s was £2.8 billion.

Sterling mixed at $1.2539 and €1.1325. Oil lower at $86.39. UK 10yr gilt yield down 1bp at 3.56%. Markets mixed to better yesterday and London set to open up around 16pts as at 6.30am.

RETAIL WITH NICK BUBB:

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