Langton Capital – 2019-08-27 – Busaba, London pubs, discounts, calories etc.:
Busaba, London pubs, discounts, calories etc.:
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A DAY IN THE LIFE:
It’s a short week and it’s still August but, for many, this week will mark the return to work.
Others will be keeping their shorts and sunhats on for another week but, as the Langton family is back from a five-night working ‘break’ in London, it’s worth considering just what a ‘break’ consists of.
Because, whilst it’s a departure from the routine, glancing at credit card receipts and racking one’s memory, it’s clear that it’s hardly a rest. Indeed, groups of the family (from three to six at any one time with another in Yorkshire to mind the dog) packed quite a lot into the short week.
We graced the casual dining, UK pubs, coffee and convenience store markets with our presence. We ate or drank at Pizza Union, Wagamama, Byron Burger, Franco Manca, Nandos and Meat Liquor. Similarly, we visited Stonegate, Fuller’s, Greene King, Sam Smiths, M&B and independent pubs. We bought iced creams and visited Pret, Costa, Starbucks, Tesco and Sainsbury.
We travelled via train and tube, saw the inside of King’s Cross & Marylebone stations alongside countless tube stations, visited the Imperial War Museum, the Shard & the Cutty Sark and tried to go rock climing in Mile End (where we were declined entry due to unpreparedness).
We saw Tower Bridge, Oxford St, Hyde Park, the House of Commons, Balliol the Bodelean etc in Oxford, Selfridges, the Sherlock Holmes statue at Baker St and many other landmarks that we just ignored. We bought innumberable fridge magnets (why?), post cards and the like and managed over 100k steps on the pedometer (which is just as well as the calorie and alcohol intake was significant.)
That was largely to numb the pain of what this was all costing but then, content in the knowledge that if everyone in Britain did similarly the F&B industry would be in rude health, we went home for a rest.
Where the grass needed cutting. On to the news:
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PRIVATE COMPANIES: Busaba Eathai last week reported numbers to end-May 2018 to Companies’ House. The figures should have been delivered in February. Here we have a look beneath the headlines. 27 Aug 2019: See Premium Email.
GENERAL NEWS – PUBS & RESTAURANTS:
• Research undertaken by London City Hall shows that the number of pubs in London remained stable between 2017 and 2018. The numbers had fallen by a quarter between 2001 and 2017. There were 3,540 pubs in London as at March 2018. There were 10 fewer a year earlier.
• The data shows that 11 London boroughs saw an increase in pub numbers after years of decline and some 74% of Londoners think pubs are important for the capital’s cultural heritage.
• City Hall says ‘the traditional London pub has long been a part of everyday life in the capital and research shows that, despite ongoing pressures, they remain a key part of life in the city.’
• The survey continues ‘pubs are also an important attraction for tourists, with previous research showing that 54% of international visitors visited one during their stay in the capital’.
• Sadiq Khan’s office says ‘the mayor is doing everything within his powers to support the pub trade and London’s cultural venues. This includes tough new planning rules to protect venues in his draft London Plan – including protecting beer gardens and ensuring new developments are soundproofed – and establishing a world-first Culture at Risk Office to help support pubs at risk of closure.’
• Sadiq Khan says ‘London pubs have been a key part of our capital’s heritage for generations, helping to unite Londoners and acting as a vital hub in the community. Sadly, their numbers have been falling for decades, which is why I’ve been doing all I can to support the trade and turn this tide of closures. I’m encouraged by these results, but with pressure from rates, rent and development, it’s crucial that the Government and local authorities give them their full support too.’
• UKHospitality has welcomed the publication of statistics showing an increase in the number of pubs in London. CEO Kate Nicholls says ‘pubs in London have shown great resilience and ingenuity to continue to prosper and cater for constantly-changing customer tastes.’
• Discounts. 40% off mains at Prezzo & Bella Italia with 30% off food at Café Rouge. Toby (M&B) letting kids eat for a quid.
• Bakery chain Greggs is reported to be creatign a vegan version of all its best-selling lines in a bid to capitalise on the success of its best-selling vegan sausage roll.
• Food labelling. Commenting on the proposal that calorie labelling should be compulsory on out-of-home foods, former Honorary Secretary of the All Party Parliamentary Beer Group Robert Humphreys MBE, has said that mandatory labeling could lead to an increase in the consumption of processed food rather than a decrease.
• Mr Humphreys says ‘I am most sympathetic with the objective of reducing obesity but believe that paradoxically such a change would have the opposite effect while also creating other perverse incentives.’ He says ‘intervention which led to a significant shift away from fresh ingredients prepared on the spot and towards greater dominance of the market by major food processors would be hugely detrimental to public health and to the culinary reputation of the UK nationally and internationally.’
• Thai restaurant chain Busaba Eathai has reported numbers for the year to 26 May 2018 to Companies’ House saying that EBITDA was £877,000, up an EBITDA loss of £402,000 in the prior year. Turnover fell 3% to £28.4m and pre-tax losses remained at £17.9m. See Premium Email for further analysis.
• FT reports that the £4.6bn deal to buy Greene King suggests that the death of the UK pub has been exaggerated. The chain took some 230yrs to build.
• The FT says the deal came as no surprise to some as ‘there are bargains available in Brexit Britain’. We suggested last week that every purchase requires a seller and that the board of directors and some of the shareholders at Greene King had decided that now was the time to sell.
• Franco Manca has opened its first site in Scotland. The site, on South St Andrew Street in Edinburgh, will offer the seven regular pizzas served at its branches elsewhere in the UK.
• Yum Brands Inc said yesterday that it will be testing Beyond Meat Inc’s plant-based chicken nuggets and boneless wings at an Atlanta KFC restaurant.
• Jamie Oliver is to register his businesses into an ethical ‘B Corporation’ that gives equal weight to people, the environment and profit. Jamie’s Italian collapsed earlier this year. Mr Oliver has spoken out on topics such as animal welfare and childhood obesity. Some 3,000 companies worldwide have thus far become B Corporations.
• Asahi has acquired the Brisbane-based craft brewer Green Beacon Brewing. The executive chairman of Asahi Holdings Australia, Peter Margin stated: ‘This is a very exciting time for our business, as we add this great brand and great business to the Asahi Beverages family’.
• Pret A Manger has placed 13 Eat stores in London on the market, following the group’s £60m takeover of the sandwich, soup and salad chain.
• Costa Coffee workers have made numerous complaints about poor working conditions across 29 franchise stores. A Costa Coffee spokeswoman commented: ‘Given the serious nature of the allegations, we have today informed all of our Individual Franchise Partners that we will be launching an independent audit into the legal and ethical compliance of their operations, including employment matters’.
• The MCA Insight Pub Brand Monitor Q2 2019 has found that roast dinners are rising in popularity, with 12.2% of visits including the British classic, up from 11% in Q2 2018.
• Salcombe Brewery has launched its first small batch brew, Hop Garden.
• Per FT, Beverly Dixon reports difficulties in hiring the roughly 1,500 seasonal workers needed each year to harvest lettuce, radishes and onions on G’s Farms in the UK. Attracting the 60,000 to 70,000 seasonal workers needed across Britain each year has been a struggle since the Brexit referendum in 2016.
HOLIDAYS & LEISURE TRAVEL:
• Manchester airport expected its busiest day last Friday, with the airport expecting to handle around 115,000 on the day and around 430,000 travellers across the bank holiday period.
• An annual Which? poll rates Ryanair as the worst firm for customer service. When presented with a choice of 50 words to describe the carrier, most of Ryanair’s passengers opted for “greedy”, “sneaky” and “arrogant”.
• STR reports Europe hotel occupancy up 1.2% to 79.0% yoy in July, with ADR up 0.1% to €120.92 and RevPAR up 1.3% to €95.54.
• Poor complaint handling and a lack of communication has been blamed for a fall in satisfaction levels for the UK’s airlines. The satisfaction level fell to 81% from 82% last year and 90% in 2016.
• Statements last week have suggested that the casino industry may be legalised in Japan.
• Manchester has installed two 75-metre long ‘mobile phone safe lanes’ on pavements in the centre of ths city after research found that 96% of the population say that they have experienced someone walking and not paying attention because they were too busy looking at their phone. It’s not April 1st.
FINANCE & ECONOMICS:
• Bank of England Governor Mark Carney has suggested that Britain’s economy will stagnate in Q3. He suggests that underlying growth still looks muted even when the effect of Brexit volatility is stripped out.
• Major British employers gave an average pay rise of 2.6% to staff in the three months to July, the highest pace of increase in more than 10 years per XpertHR.
• President Donald Trump has announced an additional 5% tariff on Chinese imports.
• Sterling down a little at $1.2216 and €1.1003. Oil down at $59.00. UK 10yr gilt yield up 6bps at 0.58%. World markets better yesterday and Far East up in Tuesday trade.
• The BBC reports that the bank of mum and dad is still active when it comes to getting children onto the housing ladder. The average parental contribution for homebuyers this year is £24,100 per L&G. The insurer warns that, as a source of cash, parental contributions will be finite.
• Brexit, politics etc.:
o Fresh from his Greenland rejection, President Trump reported to be considering buying (or at least economically and politically taking over) another island off the coast of Europe.
o President Trump has also promised a ‘very big trade deal’ with the UK. PM Boris Johnson has played down extectations of a quick deal.
o Jeremy Corbyn now trying to rally voters to prevent a ‘Trump Brexit’.
o Having said that a no-deal Brexit was a ‘million to one’ shot, PM Johnson has now said that it is ‘touch and go’.
o President Trump has said that leaving the EU will be like losing ‘an anchor round the ankle’.
o PM Boris Johnson has said the UK would not pay the £39bn divorce bill in full in the event of a no-deal Brexit. The EU says it expects Britain to honour all of its financial obligations made during its membership of the EU.
o Boris Johnson has advised the EU not to listen to MPs who are working towards stopping a no-deal Brexit. He says it is ‘the job of everybody in Parliament’ to deliver Brexit.
o A Reuters poll of ‘housing experts’ has suggested that UK house prices would fall by 3% nationally and by 10% in London in the event of a disorderly Brexit.
START THE DAY WITH A SONG:
Last Friday’s song was Shout by Tears For Fears. Today, who sang:
“The people are freezing
And the water is warm,
And the ice caps are melting
What will happen when they’re gone?”
RETAIL WITH NICK BUBB:
• Saturday’s Press and News (1): The news that the fashion chain Reiss has reported strong first half trading was picked up by the Daily Mail and the Times (which also flagged that Reiss is about to start a big advertising campaign at Piccadilly Circus) and also provided yet another fashion model photo opportunity for the Telegraph Business pages. Without a trace of irony, the Telegraph flagged on its front page that the court hearing in Arizona has just started into the allegations of improper conduct at a luxury spa by the embattled Philip Green…
• Saturday’s Press and News (2): The struggles of the Ann Summers adult toy chain were also a big topic in the Saturday papers, with the founder and CEO Jacqueline Gold whining that some landlords have their “heads in the sand” about store rents, as noted by the Guardian and the Daily Mail. The Times flagged that the beleaguered South African chain Steinhoff has at last put its two UK furniture chains, Bensons for Beds and Harveys up for sale and the Times led its market report with the fears that M&S will lose its place in the FTSE 100 index in the upcoming quarterly review. And the Daily Mail highlighted in its “Popular Shares” column the recent weakness in the share price of Morrisons, despite the view that it is vulnerable to a takeover bid. Finally, the FT had a feature on a pop-up shop operation called Appear Here (“Airbnb-style shop rentals freshen up the High Street”).
• Sunday’s Press and News (1): The Sunday papers were a bit thin on the ground in terms of Retail news, but the Sunday Times made a bit of a splash out of the news that Asda is cutting costs (specifically product development costs) ahead of a potential IPO and it had a separate article about the problems that Judith McKenna has had in cutting Walmart’s exposure to the UK supermarket industry (“Walmart prays that Asda won’t be left on the shelf”). The Sunday Times also flagged that the struggling shoe chain Clarks is the latest retailer to ask its landlords for lower store rents and it highlighted that the City will be keen to hear how WH Smith’s US acquisition is bedding in when it gives a pre-close update on Wednesday. And Oliver Shah devoted his column in the Sunday Times to the subject of Sports Direct’s problem in finding new auditors, noting that everyone is afraid to touch
• Sunday’s Press and News (2): The Sunday Telegraph flagged that unsurprising news that Boohoo has cleared out the management team of the Karen Millen fashion chain, led by CEO Beth Butterwick, after the recent acquisition. The Sunday Telegraph also highlighted that Wall Street is unhappy with the recent acquisition spree at the recently floated Online luxury business Farfetch (“Online fashion darling is coming apart at the seams”). Finally, the Mail on Sunday highlighted that the struggling Motor dealer Lookers got a boost last week when non-exec Tony Bramall bought £1.2m worth of shares at 45p.
• Bank Holiday Monday Press and News: The Daily Mail picked up on the Sunday Times story that Asda is cutting costs. The Times flagged that the US investment fund Apollois backing a new fund with the restructuring firm Altieri to invest in distressed retailers. The Guardian had a feature on the fast-growing Online business Hush, which is making a virtue out of not selling “fast fashion”. And the Telegraph highlighted that the struggles of the High Street operation of WH Smith will be a focus in Wednesday’s trading update.