Leisure Wrap & Other:

So the trading day is grinding to a close. We’re another day older but are we any wiser? After a day of intensive head-scratching, pen flipping and gossip, we have been considering the following. As always, contact us if you’d like further details:

JD Wetherspoon buyback:

• JDW has spent c£3.8m this week so far (we won’t be notified if there has been any buying Friday until Monday) buying back its own shares

• It has paid £3.83m to buy back and extinguish 624,794 shares – an average price of 613p per share.

• This adds up to about two new pubs – assuming that they were both paid for in cash – or perhaps three new pubs if some borrowings were taken out against them

• Hence JDW is making good on its promise that it would move cash from new build to share buybacks on an opportunistic basis

• It flagged up the move by announcing at its Q1 update that it would open around 15 new units in the current FY and then by edging this back to ‘ten to fifteen’ at its Q2 update.

• In addition, the group has been buying in the freeholds of units that it currently rents but, when it comes to increasing the size of the group’s footprint, there is a definite scaling back going on

Coffee – mature market:

• So who’d be a bear, huh?

• Just when you think it might be safe to suggest that the world has enough coffee shops, Starbucks comes up with 8% LfL sales growth – and 9% sales growth it the most mature market of all, the US.

• Sure ‘only’ 4% is due to traffic (the rest is price) but that’s 4% on a big number on a big number on a big number, etc.

No tipping restaurants more common in New York:

• For anyone who’s been chased down the street in New York (and in Chicago, for that matter) by a waiter keen to explain that he/she expected 20% not a paltry 10% odd on the bill, it may come as a surprise that there are a growing number on tip-free restaurants in New York.

• Ha, yeah, self-service restaurants you may add but no, for rea.

• Restaurant News – here – carries the story that Union Square Hospitality Group now no longer accepts tips at its 13 full service restaurants

• Menu prices have been increased accordingly

• Boss Danny Meyer has said he thought raising menu prices was a ‘more honest approach’

• Restaurant News quotes Meyer as saying ‘the practice of tipping was an obstacle in the company’s efforts to “provide even more meaningful career opportunities and advancement for our 1,800 employees”’ and it adds that ‘the change would allow for more equitable pay for his staff members.’

• Meyer says ‘hospitality is a team sport’ and adds ‘many of our colleagues — our cooks, reservationists, and dishwashers to name a few — aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants.’

• No (very poor) pun intended but possibly food for thought?

Random information, hopefully not all of it useless:

• Oil price up overnight, oil stocks rallying, markets better. Traders saying oil may go to $32 in a hurry but, at that point, a number of them are suggesting selling it

• Sterling up a little, adds to the feeling that markets are pausing for breath. Would be a brave observer who felt bold enough to say that the worst is over

• Defensives giving a bit back on the equity markets

We’re so 21st Century, this morning’s Tweets (diff. font size denotes importance):

1. JD Wetherspoon Wednesday spent £3.4m buying back 553k of its shares. Just announced it spent another £404k Thursday

2. Starbucks reports Q1 numbers, says strong holiday period drives +9% in US and +8% globally with traffic up by 4%.

a. Starbuck Q1. Says consolidated net revenues up 12% in Q to $5.4bn. Operating income +15%, EPS of 46c up 15% on last year

b. Starbucks sales +5% LfL in China/Pacific area. Global consolidated margin +60bps at 19.7% and 528 net new stores opened

3. Japan’s biggest brewer, Asahi + Thai rival Thai Beverage are thought to be competing with at least four private equity firms to buy Peroni, Grolsh + Meantime brands

4. McDonald’s franchisees in the US are optimistic on the coming financial quarter and year following a period of falling sales in 2015.

5. Amazon is ramping up its investment plans across Europe this year amid stricter tax scrutiny

6. Rémy Cointreau has recovered from a poor first half, posting 3.2% organic growth in the three months to 31 Dec

7. Treasury Wine Estates reports H1 earnings will exceed expectations of A$120m and instead be in the range of A$140m-A$150m

8. Alcohol is the most stolen item from British supermarkets, c-stores and off-licenses, according to a survey of 100 shops

9. Visit Britain is pushing the UK as the ‘Home of Amazing Moments’ to would-be travellers in Brazil, France, Germany & the US

10. STR reports US hotel industry grew REVPAR by 2.8% last week. Occupancy was down 0.7% but achieved rate rose by 3.5%

11. Sharm tourism authorities maintain improved airport security will bring holidaymakers back sooner rather than later

12. European Central Bank president Mario Draghi has said that Eurozone interest rates will stay low for an extended period

13. Mortgage lending in 2015 rose 8% to a seven-year high of £220.3bn but remained well below the pre-crisis peak of £356bn