Langton Capital – 2023-05-12 – Advertising spend, foodservice inflation, interest rates, Black Sheep etc.:
Advertising spend, foodservice inflation, interest rates, Black Sheep etc.:A DAY IN THE LIFE: It’s pretty likely that a whole new generation of wannabe politicians where watching Donald Trump’s CNN Town Hall yesterday to pick up a few gaslighting tips and hone their weaponized disinformation techniques etc and, keen though I was to keep my lunch down, I had a look too. And it’s hard not to learn things, even when you don’t necessarily want to and I’ve decided that I won’t be wrong any more. About anything, ever, I’ll just be alternatively right. Or maybe, and this could be a failure to fully suppress my inner-snowflake, I might just be less conspicuously right at some times than I am at others or… No, who am I kidding, I just don’t have the right skillset. Nor could I manage the physical gestures so I’ll have to pass. Anyway, we’ve made it to the end of another truncated week. Have a great weekend, fingers crossed the thunderstorms will hold off and let’s move on to the news: LANGTON EMAIL: The Free Email is now written in short form. Extended versions of many stories (after the ellipses) are in the Premium Email. Reply to this email if you would like to upgrade. Prices for the Premium are £395 for one subscription, £695 for multiple, £995 for very large subscribers, all plus VAT. Or sign up for easy in, easy out monthly option per subscriber HERE https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN PUBS & RESTAURANTS: Foodservice price inflation: CGA and Prestige have updated on foodservice price inflation, saying that it has fallen below 20% (to 18.9%) for the first time in five months. They say this ‘is the fourth consecutive fall in year-on-year inflation and the first time in five months that the rate has dipped below 20%.’ They add that ‘while prices increased by 0.7% month-on-month between February and March, there are clear signs that inflation is steadily slowing after enormous challenges throughout the last year….’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. More on inflation: The NIESR has said that PM Rishi Sunak could struggle on his pledge to halve inflation this calendar year…. • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. The Bank of England yesterday said that inflation may abate more slowly than it had previously forecast due to high food costs. It still maintains that inflation would “fall sharply in April” (as heating cost increases drop out of the numbers). It expects inflation to be 5.0% at calendar year end vs its earlier forecast of 4%. Demographics: The NIESR says that the cost of living crisis is hitting less well-off demographics particularly hard. It says the poorest fifth of households are £4,000 a year worse off whilst the average for all households is £3,000… UK interest rates & economic forecasts: The Bank of England’s Monetary Policy Committee yesterday voted 7-2 to raise UK rates from 4.25% to 4.5%… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Interest rates, corporate comment. The CBI says ‘with inflation having been at or above 9% for a full year, the Bank are rightly concerned that higher inflation could become entrenched.’ It says ‘the future path for interest rates is as yet uncertain.’ Interest rates, the hospitality sector. UKH says ‘interest rates reaching their highest levels since 2008 will be a huge worry for hospitality businesses and could significantly impact business viability…’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Interest rates & disposable income: The Guardian is of the view that the Bank of England’s +25bp rise will mean that mortgage costs for almost 1.5 million variable rate borrowers will increase. That is self-evident but it reports that another 1.5 million households with fixed-rate mortgages will see their annual bills spiral by an average £3,000 when they refinance their loans this year… Interest rates & the cost of living crisis. Citizens Advice reports it has helped a record number of people between January and April, calling it ‘our bleakest-ever start to the year’. The number of people needing crisis support in just these four months is already higher than in all of 2019 and almost as high as in 2020. Recent trading – coronation weekend. Barclays data shows pub & bar transactions up 26.7% YoY over the Coronation weekend as venues benefitted from the longer opening hours. The figures are also comparing this year’s bank holiday weekend against last year’s regular weekend… • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. Other news: New York City has passed into law a bill outlawing discrimination based on people’s weight. Some 40% of American adults are considered to be obese. City Councilman Shaun Abreu said heavy people are ‘discriminated against with no recourse’ to law. COMPANY NEWS: Sky reports that Breal Capital is considering a rescue of the Black Sheep Brewery in Masham, Yorkshire. A spokesman for Black Sheep says ‘we’re are talking to a number of interested parties and expect to be able to make a positive announcement soon.’ Sky reports industry sources as saying that a deal is still not yet certain. Rosa’s Thai is reported to have secured £10m in funding from Barclays bank in order to step up its opening programme. FD Tsara Taylor says ‘I’m delighted with the result of our recent refinance, undertaken during what is still a very challenging period for the sector. It’s great to be able to look ahead with increased confidence for the future and I am very much looking forward to partnering with Barclays as we continue to grow the business.’ Per MCA, Liberation Group’s trading update covering the 37 weeks to 28 January 2023 showed managed UK LFLs were +4.5%, with drink +12.2% and food -2%… Restaurant Brands International (RBI) has announced Tim Hortons will enter the South Korean market in 2023. BKR Co. Ltd will be the franchise partner for the venture. BKR already operates more than 480 Burger Kings in the country. Beyond Meat reports Q1 net revenues down 15.7% YoY to $92.2m, but gross profit up to $6.2m compared to just $0.2m in the prior year’s Q1… Wendy’s CEO Todd Penegor reports that Wendy’s first UK drive-thru is performing ahead of expectations, with the format seen as a key driver for its growth in the UK. Its second drive-thru is to open in Colchester this month. In the US, Dutch Bros – coffee shops – reported 30% YoY revenue growth to $197.3m for the quarter ended 31 March 2023…. The Inn Collection Group has reopened Whitby’s The Stables following multi-million-pound refurbishment. Ongoing works are creating a brand new accommodation block on the site and will raise the number of available guest rooms by 30 to 39 once completed in the Autumn. Oatly reported Q1 revenues up 17.7% YoY to $195.6m, with an EBITDA loss of $59.3m, down from $81.4m in Q1 2022… Selecta Group reports Q1 revenues up 11.7% YoY to €309.1m, driven by a recovery in the vending group’s private sector business. EBITDA increased by 17.2% to €53.1m, with daily sales per machine growing 30.5% YoY to reach a ‘record’ €12.50. HOLIDAYS & LEISURE TRAVEL: Heathrow has warned that passenger growth may be levelling off. It reported handling some 6.4 million travellers in April, but says ‘there are early indications that passenger growth may be levelling off, with recovery now stable at 93%-95% of 2019 levels across each of the first four months of this year.’ Hotelier The Hoxton has opened its first property in Germany, in Berlin. FirstGroup is to be stripped of the TransPennine Express franchise at the end of this month, with the train operator set to be nationalised. The development comes after passengers suffered months of significant disruption and regular cancellations. FirstGroup shares fell by almost 6% yesterday on the announcement that it was to be stripped of the TransPennine Express franchise after months of delays and cancellations. OTHER LEISURE: The Atlas consortium has completed its takeover of Worcester Warriors following months of uncertainty after its initial bid was by the Rugby Football Union… Rail strikes are likely to disrupt travel plans for those intending to travel to the Eurovision Song Contest finals in Liverpool tomorrow. Elon Musk has said that he has found a new CEO for Twitter. He did not name the person although he said she would start in six weeks. Peloton is reported to be recalling over two million of its exercise bikes over safety concerns. Owners are being advised to immediately stop using the bikes and organise a free repair. FINANCE & MARKETS: For interest rate comments, see Pubs & Restaurants above. Bank of England comments on economy: The Bank says that its ‘improved outlook reflects stronger global growth, lower energy prices, the fiscal support in the Spring Budget, and the possibility that a tight labour market leads to lower precautionary saving by households…’ • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. Easy in, easy out. City AM reports that experts have ‘partially blamed post-Brexit uncertainty for helping France pip the UK to Europe’s investment hub crown for the second year in a row.’ EY says the UK was home to 15.6 per cent, or 929, of all European foreign direct investment (FDI) projects last year, down from 16.9 per cent in 2021. The Royal Institution of Chartered Surveyors has suggested that the UK housing market is perhaps stabilising somewhat… Sterling weaker yesterday despite the Bank of England’s rate increase at $1.2522 and €1.146. Oil down sharply at $74.65. UK 10yr gilt yield off 9bps at 3.71%. World markets broadly lower yesterday. London set to open some 26pts higher as at 6.30am. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £395, multiple £695. Limited time offer: PayPal alternative monthly £25 + VAT per sub. 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