Entain, TUI, McDonald’s, DGE, Pernod, Barclaycard data, trading & other:

A DAY IN THE LIFE:

Bit rushed today.

Just time to make the point that you know your life has become a little boring when you get excited that the local supermarket has restocked its Tuna in Olive Oil.

No more of that brine or sunflower muck but, on reflection, it’s a bit sad, isn’t it?

And, if you need to be in bed by 10pm, the hole where your earring used to go has healed up and you have to wear odd socks to show how alternative, wacky and trendy you are, it’s even worse.

Checks socks.

On to the news:

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PUBS & RESTAURANTS:

Consumer spending, Jan 2025, Barclaycard data:

Barclaycard has produced spending data for January saying that ‘consumer card spending rose by 1.9% in the month compared with the same month last year. This follows a 0.0% month in December and a decline of 0.5% in November. The 1.9% in January is therefore the best number in three months but it still lags general inflation….

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Q4 trading:

Lumina Intelligence has commented on the eating out market in Q4 last year saying that stronger spending power and less industrial action boosted participation in the quarter. Its Eating and Drinking Out Panel found almost six in 10 UK adults – up 3.4ppts year-on-year – enjoyed eating or drinking out of home each week in the 13 weeks to 31 December….

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Jobs market

Demand for staff. The state of the jobs market influences consumer confidence. With that in mind, noteworthy that the latest jobs report from KPMG and the Recruitment and Employment Confederation has found that demand for staff last month fell at its fastest rate since August 2020. This is likely impacted by the upcoming NIC changes, which will make labour, particularly part time labour, considerably more expensive…

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Cost of labour. Lidl has announced a pay rise for thousands of workers that will take their entry-level hourly wage from £12.40 to £12.75. Lidl will leapfrog Sainsbury’s and Aldi, all this ahead of the NIC rises in April….

Other news:

The Daily Mirror reports that PM Sir Keir Starmer is ‘backing’ its campaign to save Britain’s pubs. The PM says pubs are hugely important to communities. He says the pub is ‘s a place of warmth, of opportunity, to have a nice time with friends, family and for many people to have the friendship and engagement that is so important to their wellbeing….’

Consumer spending. Rising retail sales (see Nick Bubb) have spurred hopes that the UK economy is emerging from stagnation.

Consumer spending. With regard to disposable income, worth keeping an eye on the wholesale gas price which is now at a two year high. The direction of travel for energy costs could be upwards.

COMPANY NEWS:

McDonald’s yesterday reported Q4 numbers below estimates. Revenue fell by 0.3% to $6.39 billion in the quarter, below expectations for $6.45 billion. Adjusted earnings per share of $2.80 missed the estimate of $2.84. Global LFL sales were up 0.4%, below inflation in most territories. US LFL sales were down by 1.4%, impacted by an E. coli outbreak in the quarter…

Diageo. Moody’s comments on Diageo’s results saying that these were ‘below our expectations’. It concedes that ‘most of the miss was the consequence of adverse exchange-rate movements’ and it says that ‘despite slower growth prospects than before, the company’s high margins, strong cash generation and ongoing commitment to return to a net leverage ratio of between 2.5x and 3.0x, are credit positive…’

Pernod Ricard. Reuters reports that Pernod Ricard is considering a sale of its Mumm champagne brand. Pernod says it ‘regularly assesses and evaluates its strategic opportunities and is continuously exploring options, including divestments or the streamlining” of businesses….’

The Cornish Bakery has reported numbers to end-May to Companies’ House saying that revenue rose to £29.4m from £23.7m in the prior year. EBITDA rose to £3.4m from £3.2m but PBT slipped from £1.4m to £1.1m. The company says its ‘directors believe that the business is well capitalised, with a cash rich balance sheet and a platform that is set up for continued expansion.’

Liverpool-based brewery Carnival Brewing Company, which was established in 2017, entered administration on 29 January.

Pizza chain Santa Maria ‘is celebrating its 15th anniversary with the opening of its sixth location in Paddington on Monday, 24th February 2025’.

TUI AG – Q1 NUMBERS:

TUI AG, which is no longer listed primarily in London, has updated on q1 trading (to end-December) and our comments are set out below:

Headline numbers: TUI reports that its Q1 (to Dec 2024) was its ‘10th consecutive quarter of Underlying EBIT growth’ It says Hotels, Cruises and TUI Musement all helped to drive the improvement. Q1 revenue ‘was ahead across all segments, up +13% to €4.9bn overall, supported by higher demand at improved prices as well as rates, and underlining the popularity of our product portfolio.’ The company reports that ‘in particular our Holiday Experiences businesses, contributed to a tenth consecutive quarter improvement in underlying EBIT of +€44.9m to €50.9m.’

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HOLIDAYS & LEISURE TRAVEL:

TTG reports a conversation with Dover CEO Doug Bannister as suggesting that the EU’s Entry-Exit Scheme is to be delayed until November.

Hilton Worldwide has reported Q4 numbers saying that the group achieved occupancy of 74.4 per cent in Q4, up 1.9 percentage points on the same period in the prior year. The company says ‘as we look to the year ahead, we feel incrementally a bit better than we did a quarter ago.’

Eurostar yesterday resumed direct train services from Amsterdam to London.

OTHER LEISURE:

Entain plc has this morning announced that ‘by mutual agreement Gavin Isaacs, Chief Executive Officer, is stepping down with immediate effect.’ The company does not give details but adds that ‘Stella David, currently Entain’s non-executive Chair, will again assume the role of Chief Executive Officer on an interim basis until a permanent replacement has been found. Stella was previously Interim CEO from December 2023 until September 2024.’

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A consortium of investors led by Elon Musk is reported to have offered $97.4bn to take over ChatGPT owner, Open AI.

FINANCE & MARKETS:

President Donald Trump has signed into law a 25% import tax on all steel and aluminium imports into the US. The levy will come into force on 4 March.

MPC member Catherine Mann has told the FT that companies will struggle to raise prices this year as consumers are hit by job losses and spending softens’ She says ‘demand conditions are quite a bit weaker than has been the case — and I have changed my mind on that.’

Sterling down at $1.2356 and €1.1999. Oil price higher at $76.25. UK 10 year gilt yield down 3 basis points at 4.46%. World markets mostly better yesterday but Far East mixed & London set to open around 7 points lower as at 6.30am.

RETAIL WITH NICK BUBB:

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