Clarity on Covid, food costs, services, Whitbread & other:

A DAY IN THE LIFE:

Just on a bit of a jaunt so shorter email than usual but, having hopped on a plane along, it seemed, with most of the rest of the population of the UK on Friday, I couldn’t help wondering when looking at the seatbelt signs, just when did they ban smoking on airplanes?

I mean the seat rest ashtrays seem to have gone but the no-smoking sign is still there.

Anyway, a quick Google tells us the answer but, for a bit of fun, which is which concerning smoking bans on (or in) UK trains, tubes, pubs and airplanes – 1987, 1990, 2005 and 2007?

On to the news. 

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PUBS & RESTAURANTS:

Service sector:

The CBI’s latest quarterly Service Sector Survey has found that business optimism in both services sub-sectors remained broadly unchanged in the three months to May…

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Food costs:

Health secretary Steve Barclay commented on ‘price-caps’ on basic food items in supermarkets…

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The BRC and Nielsen have reported that food inflation in the UK has slowed from April’s record level to 15.4%. The report says this is the second-fastest annual increase that the BRC has ever measured….

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Disposable income:

Nationwide’s mortgage costs saw significant increases  of up to 0.45 percentage points on Friday, following higher than expected inflation figures which in turn increased the expectation of rate rises by the Bank of England.

Rail strikes:

UKHospitality CEO Kate Nicholls has said rail strikes have put a ‘dampener’ on the May half term for hospitality. Nicholls said that ‘disruption throughout the week will cost £132 million to the sector, bringing the total impact of the year-long strikes to an eye-watering £3.25 billion.’

Other news:

UKHospitality Scotland Executive Director Leon Thompson claims that a UK-wide Deposit Return Scheme is ‘essential to make the Deposit Return Scheme a success, particularly for businesses.’ Thompson said ‘Hospitality businesses have sunk millions into preparing for a scheme and will likely have to spend more once again to meet new requirements.’

The FT has highlighted the fact that closures in the casual dining have exceeded those across hospitality as a whole…

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SOME CLARITY ON COVID:

This is an expanded version of a note that was sent to clients earlier in the year. The theme being that, as time was now passing, the impact of Covid – social, financial, cultural etc – was becoming a little clearer and the ‘new normal’ likewise.

On the other hand, other events, such as the war in Ukraine and the attempt to reverse QE have impacted trade, disaggregating the various factors has become difficult. Nonetheless…

Summary: The pandemic caused significant and rapid change in the hospitality industry. Some of these impacts disappeared almost as soon as lockdowns were lifted whilst other impacts are linger. Still other changes could be permanent. Today, we’ll consider which effects melted away almost immediately….

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COMPANY NEWS:

The Telegraph reports that Whitbread is preparing a sale of part of its £700m pub and restaurant arm having hired advisers to explore options for the division…

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Oodles Chinese has opened a unit in Walsall, taking the Indo-Chinese QSR concept to 36 sites, with plans to open a further 9 sites this year. The chain has openings lined up in Whitechapel, Newcastle, Northampton, Elephant & Castle, Aberdeen, Glasgow, and Birmingham.

TheBusinessDesk.com suggests that UK-based food manufacturer Plant and Bean may be on the brink of administration. Despite their standing as a supplier to numerous major supermarkets, Plant and Bean has filed a Notice of Intention to appoint administrators (NOI).

Yum China has said its Lavazza coffee shop network is thriving in China, reaching a total estate of 89 stores as at the three months ended 31 March 2023. In September 2021, Yum China and Lavazza pledged $200m to grow the concept to 1,000 stores by 2025.

Sky reports that the issa brothers, the owners of Asda, are set to announce a £10 billion tie- up of the supermarket with their petrol station empire imminently.

OTHER LEISURE:

Hollywood Bowl has reported 6mth numbers to end-March saying that it is seeing continued strong customer demand reflecting the attractiveness of its offer and the ‘great value for money proposition’….

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Sportech has updated on trading in a statement that will be read out at its AGM later today. The group says ‘in the first four months of the year, trading has been in line with the Board’s expectations. Sports betting continues to experience a stable rate of growth, supporting the operational cost base of the business….’

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FINANCE & MARKETS:

The Telegraph quotes Luke Hickmore, investment director at asset manager Abrdn, as saying that the UK will fall into recession by the end of this year or early next year…

Sterling $1.2352 and 1.1539. Oil price $76.36. UK 10yr gilt yield 4.33%. UK FTSE set to open up around 2pts as at 6.30am.

RETAIL WITH NICK BUBB:

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