Tax, Xmas, house prices, rugby, false sickness claims etc.:

A DAY IN THE LIFE:

What is it that makes a film worth watching twice?

I mean you may attempt never to watch the same film more than once but the chances are that you will and I think that it’s a bit of humour that makes the difference.

Certainly, drawing from a sample of viewers, admittedly a small one, both out-and-out comedies and mainstream films that at least attempt to raise a smile from time to time (Star Trek(s), Star Wars(s), Indiana Jones etc.), seem to be top of the list when it comes to multiple viewings whilst hard-hitting dramas or films with a big reveal (Sophie’s Choice, Sixth Sense, Inception etc.) might only be good for one watch.

Hence, if I get the chance to come back as an actor, I’ll be in a position to make all the right choices when it comes to roles. On to the news:

LANGTON RESEARCH:

• Langton has put together a compendium of around 3 dozen 60-seconds pieces (c200 words or so each) for distribution at £200 plus VAT, free to clients. Please let us know if you would like a copy.

PUB, RESTAURANT & DRINK PRODUCERS:

• Around 20 Byron stores thought likely to close, around one third of the total.

• EI Group Thursday bought back 218k shares for cancellation at 136.2p each.

• The BBPA has urged the Treasury ‘to deliver more far-reaching reform, to ensure fairness across business and address the rapidly evolving nature of business.’ It says ‘the current taxation system is not fit for purpose, roughly £1 of every £3 (34%) made in the pub goes to the taxman, while well-known digital companies continue to pay only a fraction of this on their UK earnings. CEO Brigid Simmonds comments ‘the pub is unfairly burdened by the current business rates regime. We will continue to campaign for a tax system that allows the beer and pub sector to thrive, boosting the already large contribution the sector makes to the UK economy.’

• SLTA says Christmas trading was poor north of the border.

• The Scottish Licensed Trade Association has updated on Christmas trading saying ‘after successive years of decline, we are starting to see some emerging signs of growth with 39% of businesses reporting increases, but this is offset by poor Christmas trading with 53% of outlets saying they were down at Christmas/New Year.’

• Alistair McAlinden of KPMG, which prepared the report for the SLTA, comments ‘it is encouraging to see that more than a third of respondents have reported growth during 2017 – an improvement on the prior year.’ He says, ‘however, a significant proportion of operators are reporting year-on-year decline, which – together with disappointing festive trading results – is indicative of the headwinds which continue to affect the sector.’

• The SLTA says ‘Christmas sales were poor, with 39 % of outlets growing in the calendar year, but this fell to 28% at Christmas & 53% of outlets showed a decline at Christmas.’ It says ‘multiple outlet operators out-performed single outlet operators (40% in Christmas growth versus 22%).’

• Re the outlook, the SLTA says ‘the long-term outlook is mixed, less outlets are expecting growth versus their actual performance in 2017, but by contrast less expect a decline.’

• Chipotle shares in the US fell sharply yesterday on the back of a broker downgrade. The group’s founder, Steve Ells, stepped down in November and a new CEO is yet to be announced. Online reviews are reported to have hit an all-time low.

• Starbucks is teaming up with Chase and Visa to launch the Starbucks Rewards Visa Card, which is integrated with its popular Starbucks Rewards loyalty program and will allow users to earn rewards, or ‘stars’.

• NRN in the US says restaurants should look seriously at selling marijuana. The journal says ‘marijuana has the ability to impact nearly every aspect of the food world. From restaurant brands reaching their cannabis-friendly customers on social media to THC-laced concoctions competing with established restaurants. Certainly, there’s money in marijuana, even if it’s just benefiting from customers who come in with the munchies.’ The UK is some way behind in this area.

• IPic Entertainment in the UK has raised $15m via a ‘mini-IPO’ to expand its cinema-based restaurant business in the US. CEO Hamid Hashemi says ‘the plan is to open four locations a year, starting in 2019. Every location will have a restaurant attached.’

• Draft House is close to the sale of one of the six Grand Union sites it acquired last summer, the MCA has reported. The Chancery Lane site is to be closed because it was deemed too close to a preexisting Draft House site.

• EI Group have launched a new Beerista pub and coffee brand, as the UK’s largest pub company looks to enter the local coffee market.

• Soup and salad sales have fallen in US restaurants despite growing health concerns. Anne Mills, senior manager of consumer insights at Technomic stated: ‘While soup and salad have traditionally served as go-to options for health-conscious guests, consumers now have a wider variety of healthy options to choose from. As more healthy foods become available and health definitions shift, brands will need to find new ways to differentiate soup and salad, perhaps with ethnic varieties that offer a balance of health and flavor’.  

• Vianet data has revealed that the Six Nations is responsible for three of the top 10 days for pub beer sales throughout the year.

• Sainsbury’s has announced that it has paid £60m for the Nectar loyalty programme.  

• London craft brewery Fourpure has poured £2.5m into its ‘Bermondsey Beer Mile’ outpost, the move will create 20 new jobs.

• The Burning Night Group has acquired a freehold site in Southport, Merseyside. The site will be operated as a new brand, Authentic Alehouses.

• Morrisons has announced that it will cut 1500 middle management jobs, while creating 1700 more junior, customer-facing roles. Fellow supermarket chains, Sainsbury’s and Tesco also announced job losses.  

HOLIDAYS & LEISURE TRAVEL:

• Thomas Cook is set to bring new fraud prosecutions against holidaymakers in the fight against fake illness claims. The company won a landmark private prosecution for fraud in Liverpool Crown Court last October, when couple Deborah Briton and Paul Roberts were jailed after bringing £20,000 claim for sickness on consecutive Cook holidays in 2015 and 2016.

• US travel giant Travel Leaders Group has agreed to buy Barrhead Travel for an undisclosed sum by March this year. Chairman Bill Munro and chief executive Sharon Munro will remain in their roles in the company and no major operational changes are anticipated.

• Airbnb will not IPO this year, although the group’s CEO Brian Chesky said the group is ‘working on getting ready to go public’. A chief operating officer — ex business affairs and legal officer Belinda Johnson — has been appointed for the first time, signalling a more mature phase of the disruptor’s growth.

• Keensight Capital has sold its 30% stake in ski holiday business TravelFactory to resort operator Compagnie des Alpes.

• Premier Inn’s new 98-room hotel in the Arndale Centre, Leeds, has been completed 5 weeks ahead of schedule at a cost of £6.2m.

• For the week 21-27 January, STR reports US hotel occupancy up 0.6% to 58.2%, ADR up 3.9% to $124.72 and RevPAR up 4.5% to $72.55. 

OTHER LEISURE:

• Gfinity has announced that an e-sports team with over 2m YouTube subscribers will compete in the 3rd season of Elite Series. It says ‘Hashtag United becomes the latest franchise to join the third season of the esports tournament’. Hashtag United was founded in 2016 by internet entrepreneur Spencer Owen, a FIFA gamer. Gfinity CEO Neville Upton says ‘the signing of Hashtag United is further evidence of the success of the Elite Series and its appeal to multiple communities from real-world football to gaming.’

• Rank, owner of Mecca Bingo and Grosvenor, announced H1 profit before tax up 17% to £40.2m, alongside 16% growth in its UK digital business. Group LfL revenue rose 1% for the six months to 31st December.

• eBay will drop PayPal as its main payment processor, instead customers will be able to pay on without leaving its website in a move which will give sellers lower processing costs. Buyers will be able to use PayPal until at least 2023. 

• Ladbrokes, William Hill and PT Entertainment agree to change online game promotions following the Competition and Markets Authority (CMA) saying punters must be able to cash out when they want. Previously, punters would have to play more to release winnings in some promotions, effectively trapping their money.

• Wm Hill has confirmed that Roger Devlin has commenced appointment as Chairman Designate. It says it ‘confirms, further to announcement of 20 December 2017, that Roger Devlin has formally joined the Board as Chairman Designate with immediate effect.’

• Apple sold fewer iPhones in the final quarter of 2017, although higher prices made up for the dip in volume. A record $20bn in profits was reported on the back of strong growth in Japan and Europe, with demand for its iPhone X — where prices start at a hefty $1,000 — surpassing expectations.

• Google owner Alphabet saw lower than expected profits of $6.8bn (£4.8bn) in the last three months of 2017 after higher costs outstripped a jump in advertising sales. Analysts had been expecting $7bn of profits.

• The board of CBS Corp is set to discuss a merger with Viacom that would reunite the two media companies after more than ten years apart. That could help CBS’ streaming service compete with Netflix Inc and boost the combined company’s leverage with cable and satellite distributors.

• Time Warner beat profit and revenue expectations in its quarterly results on Thursday, with its premium HBO channel a stand-out performer. Time Warner, which is waiting to see if AT&T gets given the go-ahead from the Department of Justice to conclude its $85bn purchase of the New York-based media company, said it expects adjusted operating income in the high single digits for 2018 and ad revenue in the high single to low double digits in the first quarter.

FINANCE & MARKETS:

• UK manufacturing growth slipped in Jan to 55.3 from December’s 56.5. Any number above 50.0 implies growth.

• Eurozone manufacturing PMI fell from 60.6 to 69.6.

• Nationwide has reported that annual house price growth picked up to 3.2% in January from 2.6% in December. Nationwide’s comments ‘the acceleration in annual house price growth is a little surprising, given signs of softening in the household sector in recent months.’ It adds ‘retail sales were relatively soft over the Christmas period, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.’

• Pound up vs dollar at $1.4257

• Sterling down vs Euro at €1.1411

• Oil up a dollar or so at $69.86

• UK 10yr gilt yield at another 2yr high of 1.53% (from 1.51% yesterday)

• World markets: UK markets down yesterday with Europe & US also lower. Far East mostly down in Friday trade

• Brexit, politics etc.:

o Times warns liberals should not sneer at populism. Maybe but, if you substitute ‘look aghast’ for ‘sneer’ and ‘ignorance’ for ‘populism’ and you might get a different answer.

o Sun reports a senior minister is ‘preparing to resign and denounce Theresa May from the backbenches’

o Liam Fox has suggested that the UK could stay in the Customs Union. The EU has repeatedly said that, in the absence of the other two freedoms, this would not be possible

o Mrs May has said that EU citizens will not have the same rights as UK citizens in the transition period

o Unilever CEO Paul Polman has said that the “worst case scenario” for the UK would be trading under world trade rules post Brexit

o Bloomberg reports ‘political dysfunction is unquestionably aggravating the U.K.’s Brexit nightmare.’ Jeremy Corbyn remains the Hard Left PM in waiting.

o Bloomberg suggests the ‘anti-EU wing of the [Tory] party is making the country ungovernable.’ Bloomberg observes ‘bringing order out of anarchy isn’t so easy.’

• Irish Times suggests Brexit brouhaha has caused a nervous breakdown across the political classes. Says UK’s ‘humiliation is excruciating’. Says Boris Johnson’s ‘calculated mendacity is matched only by inflated self-regard. Says Mr Johnson’s ‘rhetorical flatulence has landed us where we are.

• Irish Times says the 52% vote, which has politicians doing what they know is wrong, has an ‘absurd, almost mystical status’.

• Democracy, which is great but which gave us Boaty McBoatface & got the Birdie Song to no2 in the charts, has now given us Brexit

ADMIN ETC.

• Langton is between offices. Please communicate via email. MIFID II is now in operation.

LATER TWEETS:

• Later tweets: Comptoir reports FY trading was ahead of reduced market expectations. Shares up 1p to 20p. They were 60p last year

• France is to ban “buy one, get one free” offers on food products in supermarkets. Wants to raise farmers’ incomes. Now there’s a thought

• McD UK extended McDelivery to 270 units in Q4. Byron to shut stores. High Street’s best years are a) if front of it or b) in the past?

• UK manufacturing PMI misses expectations down in Jan to 55.3 from 56.2 in Dec. Any number >50.0 implies growth. Eurozone PMI 59.6 vs 60.6

• Nationwide has UK house price growth 3.2% in Jan, slightly ahead of inflation & up on Dec rate of 2.6%. Affordability where art thou?

• UK political dysfunction worsening (Bloomberg), UK ‘mired in Brexit’ (Reuters), this ‘may be the end’ (for Ms May, The Sun).

• You can have your wacky baccy and smoke it says Liam Fox. May stay in Union, ban migrants & not pay into pot. Nutter?

• Sun says ‘top Tory’ is to resign & denounce Mrs May as hopeless, wounded, clueless etc. etc. Could be a long list…

START THE DAY WITH A SONG:

Yesterday’s song was Hotel California by The Eagles — a popular choice, it would seem… To kick off the weekend, who sang:

Monday you can hold your head,

Tuesday, Wednesday stay in bed

Or Thursday watch the walls instead

RETAIL NEWS WITH NICK BUBB:

• Today’s Press and News: The Apple Q1 and the Amazon Q4 results came out too late last night in the US for the FT to be able to pick them up, but the other papers had no such problems with print deadlines, not least the Daily Mail, which trumpets “Amazon trounces Apple and Google” as its main Business story, whilst the Times flags that weak iPhone sales took the gloss off Apple’s performance and that Amazon shares rallied strongly after hours as it revealed a 38% surge in Q4 sales. Back in the UK, the big Retail story is that Sainsbury has bought the Nectar loyalty card for just £60m (and will make it into a pure Sainsbury product, after the loss of Homebase and British Gas as clients), although there are also a few snippets about the store management job cull announced by Morrisons.

• Trade Press: The front cover of Retail Week magazine today is a picture of a road sign saying “How to speed past the etail slowdown”, flagging up a feature (based on forecasts from IMRG and Capgemini) on “As ecommerce growth slows, how can retailers innovate to accelerate sales?”. RW also has features on “New Year Detox” (“Is it time for retailers to kick the deep discounting habit?”) and “Resetting Sainsbury’s” (“Talking costs, colleagues and customers with Retail and Operations Director Simon Roberts”). In terms of News stories, RW highlights the news that Ikea founder Ingvar Kamprad has died aged 91 following a short illness, Next has partnered with multichannel car retailer Rockar to turn excess space at its largest store in Manchester Arndale into a car showroom, Bunnings UK Merchandise boss Craig Castelino is leaving the business, the Co-op is to cut prices by £50m in the latest
salvo in the grocery price wars and Zara has opened its first ever  “click-and-collect” store in Westfield Stratford while it doubles its flagship store at the centre to 48,000 sq ft. And in his column the Editor thunders that “Kamprad’s Ikea story should inspire retailers”.

• BDO High Street Sales Tracker: We flagged on Wednesday that John Lewis had a pretty decent time last week, thanks to a surge in Electricals sales, but today’s BDO High Street Sales Tracker for small/medium-sized Non-Food chains for last week, w/e Sunday Jan 28th, flags that Fashion Store LFL sales dipped by 1.7%, despite a soft comp of -2.6% last year, with “poor weather” getting the blame. Including Homewares and Lifestyle chains, total Store LFL sales were also down, by 1.3% (vs -1.6% a year ago). Overall Online sales were up by 18.5% (versus +20.2% a year ago), with Online Fashion sales 21.5% up. 

• News Flow Next Week: We get the BRC-KPMG Retail Sales figures for January first thing on Tuesday, quickly followed by the Ocado finals and the latest monthly Kantar/Nielsen grocery sales data. On Wednesday ScS are taking analysts to see their new Chelmsford store and then on Thursday their rival DFS issues a pre-close trading update.