Rates, costs, the Gig Economy, travel agents & other:

A DAY IN THE LIFE:

Good news and bad news.

Yesterday I was both lucky enough to be selected to take part in a survey that could win me £500 worth of Lidl vouchers and then received back-to-back phone calls informing me that I’d been involved in a car accident (though for the life of me I have no memory of it) and that some heinous bank, the caller was unsure which one, had ripped me off in some indeterminate year by selling me PPI insurance.

Well I had to decline all three approaches and in the process informed the callers that I had signed up to TPS (check it out, it pretty much works) to stop nuisance – or even very informative and value added – cold calls.

The callers then blanched a bit as it would appear that TPS, which they all must pay into a fund to maintain, has teeth.

They then admitted that they didn’t know who I was, didn’t know where I lived and had rung me only because they had picked out a random number and then started ringing 10 above it, then 20, then 30 etc.

So, so much for targeted marketing. On to the news:

PUB, RESTAURANT & DRINK MANUFACTURERS:

• The Scottish Beer and Pub Association has welcomed the 12.5% one year cap on business rate increases in Scotland for the hospitality sector, which should save pubs an estimated £6m. Brigid Simmonds, SBPA Chief Executive, commented: ‘Pubs pay a disproportionate share of business rates in Scotland, and some pubs were facing huge increases with bills due to go out in just a few days time… This cap will give the Scottish Government an opportunity to reflect on how business rates in Scotland work for the pub sector. We need a system of relief that is specifically tailored to help Scottish pubs, and so continue to offer our support to the ongoing Barclay Review.’

• BT Sport will not restructure its pricing in April 2017 to reflect pubs’ new business rates bills.

• The Scotch Whisky Association says more must be done to cement the UK Scotch market’s recovery. Figures released by the HM Revenue and Customs (HMRC), showed the number of 70cl bottles of Scotch whisky released for sale in the UK in the first three quarters of 2016 totalled 57.2 million – up 5.6% from 54.2m in the same period of 2015. However, fewer bottles were sold in the first nine months of 2016 than in the same period ten years ago, with 62.6m bottles released for sale in the first nine months of 2006.

• ALMR chief executive Kate Nicholls has laid out a three point plan as part of the trade body’s stepping up of its business rates campaign, calling for the UK government to implement a 12.5% rate cap as put forward by the Scottish and Welsh governments and ‘sector-specific relief’.

• G1 Group has agreed to purchase the 69-bedroom Scotsman Hotel on North Bridge in Edinburgh.

• The Department of Coffee and Social Affairs (DoCaSA) steps up roll out plan for next year, aiming to double its site numbers to 22. The group currently operate 13 sites, with its first non London unit recently opening in Bristol.

• Rising costs of and reductions in supply of vegetables, sugar, oils, fats and hot drinks has caused a 2.9% increase in foodservice prices in January 2017, on the same period last year. The price inflation has largely been blamed on the poor weather conditions across Europe resulting in fluctuations in supply.

• Timothy Taylor’s Brewery completes the purchase of Harrogate Brasserie. The acquisition allows the brewery to capitalise on the high levels of tourists, theatre goers and delegates using the nearby conference and exhibition centre throughout the year.

• Bosses of online food ordering services, Uber, Deliveroo and Hermes tell MPs they will have to reduce flexibility and work hours to staff if they are forced to give greater employment benefits. It is believed that 5 million people work in the so-called ‘gig’ economy. Deliveroo UK and Ireland managing director Dan Warne stated ‘We cannot offer that amount of flexibility to those riders if we’re forced to pay a given wage and a given hour to every single rider’.

• Brexit secretary David Davis has said the UK will not ‘shut the door’ on EU workers. He says ‘in the hospitality sector, hotels and restaurants, in the social care sector, working in agriculture, it will take time – it will be years and years before we get British citizens to do those jobs.’ He adds ‘don’t expect just because we’re changing who makes the decision on the policy, the door will suddenly shut: it won’t.’

• A US Reuters poll has suggested that higher menu prices are proving to be a drag on restaurant demand

o Papa John’s shares fell by 8% yesterday in the US on (what looked like good but) weaker-than-expected Q4 numbers. LfL sales were still up by 3.8%.

o Texas Roadhouse shares also fell yesterday on poor numbers. The shares finished down by around 13%

LEISURE TRAVEL & HOTELS:

• Accor full year revenue grew by 0.9% (+2.2% LfL) to €5.63bn and EBIT rose by 4.6% (+3.8% LfL) to €696m. Sébastien Bazin, Chairman and CEO, said: ‘AccorHotels has posted an excellent performance for 2016 in a challenging environment, in particular with record levels of EBIT and numbers of hotel rooms opened. Thanks to the efforts made by our teams around the world, we have implemented strong operational levers, which enabled growth in earnings to outpace that in revenue.’

• Kuoni is to expand its network of 65 branded stores nationwide and is looking to boost the number of third-party tour operators sold in its branches, in contrast to Thomas Cook’s strategy of high street retrenchment.

• KPMG’s Rohitesh Dhawan told attendees at the Business Travel Show that Donald Trump’s proposed travel policies could have a longer-lasting impact than Brexit

OTHER LEISURE:

• William Hill is reported to be close to promoting acting CEO Philip Bowcock to chief executive.

• Australia’s Crown Resorts said to have shelved plans to spin off property trust. It is to focus on further share buybacks

FINANCE & MARKETS:

• UK Q4 GDP growth revised up from 0.6% to 0.7% per ONS. Manufacturing exceeded earlier expectations

• ONS nonetheless cut its estimate of growth for 2016 as a whole from 2.0% to 1.8%. Brings us in just below Germany at 1.9%

• US Treasury Secretary Steven Mnuchin has reassured the IMF boss Christine Lagarde that he wants to work with the body. He says the Trump administration has an interest in maintaining financial stability.

• Council of Mortgage lenders reports fewer London home owners moved house last year than at any time over the last 25yrs. CML reports ‘persisting supply and affordability issues appear to be exerting an ongoing restraint on growth, meaning there is some uncertainty around how the market will perform going into 2017.’

• Minutes of the latest Fed meeting show that the US body is ready to raise interest rates ‘fairly soon’. Betting is currently on June but March is beginning to look like more of a contender.

• Brexit. Lloyds’ CEO Mr Horta Osorio has said that Brexit has not impacted spending & says ‘consumer behaviour is exactly the same’

• Eurozone CPI was up to an annual 1.8% in the year to January, in line with earlier estimates

• World markets: UK mixed yesterday whilst Europe moved higher. US was down & Far East is down in Thursday trade

• An unidentified ‘number of hedge funds’ are said to be shorting the market in the belief that the current Brexit-then-Trump rally has run far enough

• UK 10yr gilt yield down again to 1.20%. Was 1.24% on Wednesday

• Oil at $56.30 (was $56.89)

• Sterling down against US$ and Euro. Trading at 1.2438 vs $ and 1.1781 vs Euro

YESTERDAY’S LATER TWEETS:

• Later tweets: Lloyds posts ‘best results in a decade’. Now hold on, that’s not saying very much, is it? Shares were over 7 quid 20yrs ago. Yes, 20yrs…

• Good Eurozone macro performance. World on the up? Dow hits 8th consec. Record. Interest rates ditto though B of England is wriggling

• Bank of England says natural rate of unemployment could be 4.5%. Come on Mark, what happened to the 7% you mentioned in 2013?

• Bank accused of selective interpretation of data in order not to put rates up. Just inflating the bubble further, guys?!

• ASDA bad but less bad. No clarity re strategy going forward. Just ‘do better’? Will lead to fears it could pull the price lever

• With base rates at 0.25%, Lloyds’ Horta Osorio says interest rates ‘will no longer decrease’. Worth every penny of his £8.5m 2015 total pay

RETAIL NEWS WITH NICK BUBB:

• Intu Properties: After the finals from Hammerson on Monday and Capital & Counties yesterday, it is the turn of the shopping centre giant Intu Properties (the owner of Trafford, Lakeside, Metrocentre etc) to pronounce upon the state of the Retail property industry today, on the back of their finals, and the news is reasonably reassuring, although the company remains in threat of losing its place in the FTSE 100 index in next week’s review. David Fischel, the CEO, commented: “In a year which will be remembered for its political turbulence, intu is pleased to have recorded a strong set of results with 6% growth in underlying earnings per share, an increased dividend and stable property values”. And the company says that “We intend to deliver continued growth in like-for-like net rental income and we reiterate that we expect this to be in the 0 to 2% range for 2017…this includes an
adverse impact of some 2% from units being held for redevelopment and from the full year impact of BHS closures”.

• Howden Joinery: If you were wondering how “white van man” is feeling about life post-Brexit, then the finals from the kitchen/joinery company Howden are worth a look this morning and the news is that “softer trading conditions seen in the UK in the second half of 2016 have continued into the early part of this year, with volumes having weakened slightly.  We raised prices towards the end of last year in response to cost pressures in our business and the early signs from this are encouraging”. The upshot is that UK depot revenue in the first two periods of 2017 rose by 3.6%, in line with management expectations (albeit that excludes the first trading week, which had one fewer trading day in 2017 than in 2016).

• Today’s Press and News: The Capital & Counties and Hotel Chocolat results get plenty of coverage in today’s papers, but the big news is that the AO.com founder and CEO John Roberts is stepping down in favour of COO Steve Caunce (albeit “motor-mouth” will stay on the Board and remain the biggest shareholder): the FT quotes him saying that “My brain and eyes are better placed there (in an innovation lab), than sat in front of an analyst in the City”.

• News Flow This Week: The CBI Distributive Trades Survey for “February” is out at 11am this morning.