Confidence, trains, GDP, Airbnb, Molson, Wendy’s & other:

A DAY IN THE LIFE:

Pattern recognition is deeply embedded in us.

We see things that aren’t there (false positives) far more often than we actually miss things. And this isn’t a comment on the Lucy Letby case but pattern recognition can lead to errors whereby, for example, we mistake luck for genius or arrogance for smarts.

Indeed, the answer to most questions when asked what or why is ‘it’s complicated’ but that just doesn’t cut it with a human audience.

And many truisms, ‘too many cooks spoil the broth’ and ‘the early bird catches the worm’ have exact opposites such as ‘many hands make light work’ and the other one, whatever the advice is you should give the worm to avoid becoming avian breakfast.

And ‘fortune may favour the brave’ but it’s sensible to ‘look before you leap’. You maybe should seize the day but a stitch in time, saves nine, the tortoise beat the hare etc etc.

Anyway, it’s complicated but, on another completely random subject, now that the latest Foodservice Price Index confirms that the price of fish is falling, do you think all the chippies out there are sharpening their pencils to reduce prices?

Hint, no.

Have a good weekend and let’s move on to the news:

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PUBS & RESTAURANTS:

(Rich) consumer confidence:

Data from Saltus Wealth Index suggests that confidence in the UK economy across high net worth individuals has fallen sharply since Labour took power. That may not be a shock to many. City AM points out that the Index nonetheless found that some 48% of high net worth individuals had confidence in the economy, down from 84% in August…

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More general confidence levels:

Lumina reports that consumers may reduce the number of times they eat out or opt for lower-ticket choices as consumer confidence has slipped. Lumina Intelligence reports that consumer confidence fell to minus 22 in January….

Train strikes:

A bit like painting the Forth Bridge. City AM reports that train drivers on London’s Elizabeth Line will stage a series of strikes over the next month in a dispute over pay. ASLEF has announced that drivers will walk out on 27 February, and on the 1st, 8th and 10th of March for 24 hours….

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GDP:

UKH points out that ‘food and drink was the largest contributor to growth in consumer-facing services in December 2024.’ This follows on from a major contribution in November but the momentum could be lost as a result of tax and NMW changes upcoming in April…

Other news:

DIY coffee. Australian appliance manufacturer Breville Group has reported strong coffee machine sales globally…

Valentine’s Day. Dojo has reported that bookings for tables of two are up 15% this Valentine’s Day compared to the same occasion last year. Dojo says ‘this will be a welcome boost for hospitality venues, which are feeling the pressure of rising costs, particularly following last year’s Chancellor’s Budget…..’

Water costs: UKH points out that costs are an issue but adds ‘there’s one cost hiding in plain sight that too many operators are still overlooking – water waste.’ It says that the hospitality sector is one of the UK’s biggest users of water and adds that leaks are easy to ignore and costly to finance.

Straws in the wind. Denny’s Corp in the US has suggested that consumer spending tailed off towards the end of Q4. The company told analysts ‘we are a bit disappointed that trends have since softened to start 2025.’

COMPANY NEWS:

Greene King Pub Partners is to extend its franchised pub model to Scotland for the first time when it rolls out its Hive Pubs and Nest Pubs offer, likely in April this year.

Overseas majors:

Molson Coors yesterday reported Q4 numbers saying that Q4 sales were down 2.0% and FY sales were down 0.6%. That’s an unhealthy exit rate…

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Wendy’s similarly reported Q4 numbers saying that systemwide ‘sales grew 5.4% in the fourth quarter, reaching $3.7 billion.’ LFL Q4 growth was 4.3%. Q4 represents an acceleration as the company says ‘for the full year systemwide sales grew 3.1%, reaching $14.5 billion, including same-restaurant sales growth of 1.5%….’

Treasury Wine Estates reports Q2 and half-year numbers saying that net profits jumped 33% to AU$239.6 million (£121 million) in the six months, just short of analysts’ expectations. The company has edged back estimates for the full year…

Australia-based Domino’s Pizza Enterprises, which is the largest master franchisee of the Domino’s Pizza offer, is to close 205 restaurants. Some 172 of the units are “loss-making” stores in Japan….

US coffee offer Dutch Bros has reportedly reached 1,000 stores with a new outlet in Orlando, Florida.

Coca Cola Europacific Partners has reported full year 2024 numbers saying that revenue rose by 11.7%. CEO Damian Gammell reports ‘2024 has been another solid year for CCEP with continued robust top and bottom-line growth….’

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Nestlé has reiterated its desire to keep its water business but the search for a partners to work with it continues.

HOLIDAYS & LEISURE TRAVEL:

Airbnb yesterday reported Q4 numbers ahead of expectations saying that sales grew by 12% year-on-year in Q4 compared to 10% growth in Q3. Earnings were 73 cents per share on sales of $2.48 billion in the quarter….

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The Welsh government has rejected calls to exclude children from its plans for a £1.25 per night tourism tax in the principality. The charge at hostels and campsites would be 75p. It would be up to councils to decide whether to introduce the fee, possibly starting in 2027. Finance Secretary Mark Drakeford said leaving out the U-18s would lead to a ‘significant fall’ in revenue…

Heathrow CEO Thomas Woldbye has indicated that he would like planes to be using the airport’s third runway within ten years.

Airline departure tax in France is to more than double next month. Short haul flight tax will rise from €2.63 to €7.40 on flights departing from France.

OTHER LEISURE:

Merlin is reported to be exploring a sale of some of its aquarium assets as it seeks to prioritise investment in its biggest international sites….

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Elon Musk has reportedly said he would drop his $97.4 billion bid OpenAI if the company converted to a for-profit company.

It is rocket science company Blue Origin, owned by Amazon founder Jeff Bezos, is reported to be laying off about 1,400 employees, or about 10% of its workforce.

FINANCE & MARKETS:

GDP growth eases recession fears. The ONS yesterday reported that ‘the economy picked up in December after several weak months…’

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The Telegraph reports that Business Secretary Jonathan Reynolds is to tell the Competition and Markets Authority to ‘be more agile.’ This sounds like an instruction to take more risk.

The RICS reported a pickup in property activity in January.

Sterling up at $1.2554 and €1.2012. Oil higher at $75.12. UK 10 year gilt yield down 5 basis points at 4.49%. World markets mixed yesterday & London set to open around 2 points better as at 6.30am.

RETAIL WITH NICK BUBB:

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