DGE Q3, Just Eat, trading, soft drinks, slot machines & other:

A DAY IN THE LIFE:

Sometimes phrases help you to illustrate a few concepts, for example, I might say ‘they cut off his head but they gave him a biscuit’ and that helps to highlight a number of things.

Firstly, false equivalence. There’s good news and there’s bad news but these are hardly equivalent. The biscuit might be tasty but the head-chopping is a more substantial down downer.

At least it is to most people.

Secondly, timing. The statement is unclear. But a biscuit whilst your head is attached to your shoulders is one thing whilst, if it’s thrown in the basket to keep your head company after the latter has departed your body, that’s quite another.

And thirdly, linked to number one above, there’s scale.

False equivalence would encompass losing a tenner and finding a fiver but being gifted a chocolate digestive before (and even more so after) your head has been cut off is on a logarithmically different scale.

Anyway, don’t know why that came into my head. On to the news:

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PUBS & RESTAURANTS:

Trading:

GCA has reported that the sunny weather has been positive for long drinks with beer and cider sales sharply better. In the week to 26th April, it reports that cider sales were up 12.7% with soft drinks up 8% and beer sales 2.7% better. Spirits were still in negative territory at minus 2.4% and wine sales were worse at minus 5.9%. in the next week, ending 3rd May, CGA reports that cider sales were up as much as 43.2% with beer up 15.1% and soft drink sales up by 8.5%. Spirits sales were in nominal growth of 1.8% with wine still negative at minus 3.1%…

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Drivers of drink:

Japanese major Asahi has reported that alternative uses for time such as gaming, video streaming and social media have had a greater impact on alcohol consumption than concerns over health amongst Gen Z consumers…

Demographics:

The FCA has reported that as many as one in 10 UK adults have no savings whatsoever. This leaves them exposed to financial shocks and, as such, spending levels can be volatile and subject to sharp reversal. The FCA goes on to say that around a quarter of the UK adult population has ‘low financial resilience’.

Soft drinks:

Carlsberg Britvic’s Soft Drinks Review 2025 concludes that, as regards the on-trade, ‘soft drinks is one of the strongest performing sub sectors for the UK’s licensed operators. It says this sector has grown by 0.6% to £4.6bn on volumes down 5.6%. The review ‘reveals the challenges the industry is facing; a decrease in the number of pub visits, which has dipped by 1.7% to 1.15 occasions a week and an increase in demand for “quality” when they do visit’. It says this highlights ‘the importance of providing elevated experiences and a sense of occasion…’

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COMPANY NEWS:

Spirits giant Diageo has reported Q3 numbers saying that it saw ‘strong Q3 organic net sales growth’ and adding that it is ‘on track for [the] full year with sequential improvement in H2.’ The group reports that net sales for the third quarter increased by 2.9% to $4.4bn, with ‘positive organic growth partially offset by unfavourable foreign exchange and disposals’. The company says that ‘organic net sales were up 5.9% in the quarter, with organic volume up 2.8% and positive price/mix of 3.1%.’ the company adds that its ‘performance in the quarter was supported by favourable phasing which we estimate contributed c.4% of Q3 group organic net sales growth, mainly from North America and to a lesser extent Latin America and Caribbean, and is expected to reverse in Q4….’

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Prosus has today officially launched its recommended all-cash offer to buy Just Eat Takeaway at €20.30 per share. It points out that the price ‘represents a premium of 63% to the Company’s closing share price on 21 February 2025, and a 49% premium over the 3-month VWAP.’ It adds that the offer is ‘unanimously recommended by Just Eat Takeaway.com’s management board and supervisory board’ and the Acceptance Period runs from 20 May 2025 to 29 July 2025….

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Sir Harry Solomon is reported set to sell shares in Lola’s Cupcakes, which now has 45 sites, including concessions and vending machines in train stations. The brand was founded in 2006 by Victoria Jossel and Romy Lewis. City broker Shore Capital is thought to be handling the sale.

The FT reports that ‘Richard Caring is in advanced talks to sell a significant portion of his UK hospitality empire — which includes the Ivy restaurants chain and London private members’ club Annabel’s — to an entity controlled by the powerful Abu Dhabi royal Sheikh Tahnoon bin Zayed al-Nahyan….’

Champagne strikes. Staff at a number of LVMH’s Champagne houses have gone on strike amid fears of job cuts. Staff at G.H Mumm and Perrier-Jouët, owned by Pernod Ricard, are also taking industrial action.

NEOS Hospitality has confirmed that ‘Kuda’ in Clifford Street, York, which was formerly The Gallery, will reopen this month after a refurbishment following its closure on March 29.

Cava in the US has outperformed a number of other casual diners and has turned in 10.8% year-over-year growth in Q1.

Bloomberg reports that Starbucks Corporation is considering a sale of a stake in its China business.

HOLIDAYS & LEISURE TRAVEL:

The Daily Mail reports that Olga Polizzi, daughter of patriarch Charles Forte, is set to continue the expansion of her hotel empire.

The BBC reports that theme park operator Flamingo Land is set to be given permission by the Scottish government for a controversial holiday park development at Loch Lomond, overturning the decision of the national park authority.

The FT reports that tougher US border controls are prompting a rethink when it comes to business travel decisions. It says that ‘with Donald Trump back in the White House, many corporate executives, academics and government officials in Europe and elsewhere are approaching trips to the US with a level of caution more often associated with higher-risk jurisdictions such as China and some countries in the Middle East.’

Union Unite has said that a strike at Gatwick Airport, which could have disrupted half-term travel, has been called off.

The government is pushing for a deal with the EU to allow UK passport holders to use EU e-gates at airports.

OTHER LEISURE:

The Guardian reports that ‘slot machine companies are targeting Britain’s poorest neighbourhoods and channelling the proceeds to billionaire-owned overseas corporations.’ It says that ‘the number of slot machine shops has risen by 7% since 2022’ and adds that ‘venues are disproportionately concentrated in Britain’s most-deprived areas.’

Meanwhile, four Premier League clubs have been warned by the Gambling Commission that they risk prosecution over their relationship with an unlicensed gambling business that is advertised by the teams….

FINANCE & MARKETS:

The CBI has called for the UK to ‘build bridges’ with the EU. It says that the current agreement is ‘no longer fit for purpose’.

Moody’s has cut its rating for US debt saying that ‘successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.’

Rightmove reports that asking prices for British homes rose by 0.6% in the month of May. It says this was likely due to the 14% rise in new properties coming to the market.

Sterling mixed at $1.3299 and €1.1895. Oil higher at $65.07. UK 10 year gilt yield unchanged from Friday at 4.65%. World markets better on Friday but Far East down today & London set to open around 29 points lower as at 6.30am.

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