Langton Capital – 2020-10-20 – PREMIUM – Wales, Level II, Britvic, Escape Hunt, trading & other:
Wales, Level II, Britvic, Escape Hunt, trading & other:PREMIUM EMAIL – PLEASE DO NOT FORWARD: A DAY IN THE LIFE: Our run-around is a 12yr old Skoda with 80k miles on its clock and about 80,000 dents on its bodywork. It motors really well and I’m rather fond of it, but our daughter does tend to wince when we pick her up in it and, as some chilled salmon or haddock that we bought last week seems to have leaked when we were transporting said produce back from the supermarket, it’s not likely to have risen in popularity as a result. Because it’s now not only a geriatric, multi-dented, never-very-expensive motor but it’s all of the above and it stinks of fish. And, even I have to admit as a diehard fan of the car, that’s not going to do much to endear it to anyone. Anyway, that’s enough of that. It’s nothing that a month on the drive with the windows wound down won’t cure. On to the news: ADVERTISE WITH US: Langton’s free email now carries adverts. See front page of website for today’s copy & contact us for further details. WALES GETS OFF THE FENCE, ANNOUNCES LOCKDOWN: The Welsh Government has announced a 17dy lockdown from 6pm Friday. 20 Oct 2020: Introduction: • The Welsh Government has announced a lockdown from 6pm this coming Friday. Pubs, bars, restaurants & non-essential shops will have to close. • Workers have been told to work from home if they can. Schools will remain open up to age 13 (though the 2wk lockdown does include a week of the half-term holiday) • Sky’s Kay Burley tweeted ‘everyone in Wales except critical workers must stay at home for two weeks from Friday 6pm.’ That isn’t strictly true as people will be allowed to go to work if they can’t work from home, most school children will still attend school after the half-term and, we are assuming, food shops will want customers as well as just their staff. • If we’re wrong on the latter point, the panic buying over the next 96hrs will truly be something to behold. Implications: • There will be compensation as closure is not discretionary. • The BBPA says the firebreak will force 3,000 pubs to close. Around the same number of restaurants could be affected. The BBPA says ‘the Welsh Government announced that grants would be available for some pubs but the trade association says a “far stronger” package of financial support for all pubs, brewers and their supply chains in Wales will be needed if they are to survive a full lockdown. It says 37,000 sector jobs across Wales are at risk too without more support.’ • These are what would normally have been good weeks (particularly in an era of staycations) • Halloween was almost certainly a washout this year already (in Wales as well as elsewhere) but this just puts the cap on it. The closure period includes Bonfire Night and the children’s Half Term, a week when family dining should be on the up. • Again, the supply chain may be disadvantaged as it may be allowed to remain open (as it is essential) but the bits of it that supply pubs & restaurants will have little to do. • As mentioned below, SIBA says brewers, who are a major part of the supply chain for pubs in Wales that will now have to shut. Breweries themselves could stay open, but why bother as 80% of small breweries’ output goes to the on-trade. • And pubs may have to pour much of their beer down the drain. They may ask breweries to help financially in this regards. Large brewers may be able to do this but smaller brewers cannot afford it. • And brewing is a chemical process. It can be switched on and off but the beer that will now not be needed next week or the week after by pubs that will now but shut is already being brewed. Where is that going to go? Pressure for an English lockdown? • Boris Johnson is battling the Libertarian wing of his own party. • He will not wish to timidly follow the example of Wales and to some extent Scotland. • The Parliamentary Labour Party is calling for a circuit break which, in the minds of the governing party, may be another reason not to do it • There was talk a month ago that an extended Half Term (to two weeks) with a lockdown was being planned. But Labour, Wales and Scotland have stolen those clothes and it would look weak if Mr Johnson obliged England to follow suit • But never say never THE IMPLICATIONS OF THE MOVE TO LEVEL II. York and also London moved from Level I to Level II over the weekend. 20 Oct 2020: The key point: • Not allowing people from different households to meet indoors removed at a stroke much of he rationale for pub meetings, dates in restaurants, catchups with friends over a coffee etc • Consumers have been acting accordingly. Reservations have been cancelled and trade has been poor Early evidence: • Quoted companies may be reluctant to give details as they must abide by certain rules when it comes to imparting information • The Evening Standard says ‘leading West End bar and restaurant operators today warned that they will not survive the winter after the “horrendous” first weekend of the capital’s Tier 2 Covid-19 clampdown triggered tens of thousands of cancellations.’ • And, let’s face it, why wouldn’t you cancel because, if your lunch or evening meal was with someone that you don’t currently live with, it would be illegal. • The Standard says: ‘the normally heaving streets of central London were left desolate on Saturday and Sunday following the imposition of tough new “no mixing” laws that resulted in up to 75 per cent of bookings being scrapped.’ • The two drinks ‘meetings’ and one pizza lunch that Langton had last week would, this week, be against the law. As would the coffee we had with a former work colleague. At that stage, surely, you’ve got to ask: ‘just what is the point?’ • And this is London Level II rather than Liverpool Level III although, in some ways, Level III would be better for some pubs and restaurants as, one would imagine, even if they supply ‘main meals’, they could choose not to do so for commercial purposes, supply only alcoholic drinks and therefore be ‘forced to close’ and at least get some financial contribution towards staff wages. Further comment: • The Standard says the ‘no mixing’ rules ‘resulted in up to 75 per cent of bookings being scrapped. • The Night Time Industries Association says ‘it’s been horrendous, it has decimated the sector. We are going to see some catastrophic results in terms of businesses deciding to close.’ • D&D London (Le Pont de la Tour and Quaglino’s amongst others) comments ‘Friday was a strong day with everybody out for dinner before Tier 2 kicked in. But Saturday was a disaster for our big West End restaurants: Quaglino’s and 100 Wardour Street both dropped 50 per cent compared with last Saturday.’ • Langton in York on Sunday afternoon found restaurants & cafes doing what looked like a fair trade. But perhaps lunchtime (and daytime in general) could be for families with evenings more likely to rely on groups who do not live together hooking up PUBS & RESTAURANTS: To lockdown or not to lockdown, that is becoming the question. Lockdown in Wales: • The Welsh Government has announced a lockdown from 6pm this coming Friday. Pubs, bars, restaurants & non-essential shops will have to close. See Premium Email for further detail, analysis & comment Industry reaction: • The BBPA says the firebreak will force 3,000 pubs to close. It says ‘the Welsh Government announced that grants would be available for some pubs but the trade association says a “far stronger” package of financial support for all pubs, brewers and their supply chains in Wales will be needed if they are to survive a full lockdown. It says 37,000 sector jobs across Wales are at risk too without more support.’ • CEO Emma McClarkin says ‘this ‘fire break’ in Wales will destroy many pubs, brewers and their supply chains in the country unless the financial support package is available to all businesses hit by the forced closure of all pubs.’ • The BBPA says ‘the Welsh Government must now urgently do the right thing and extend the availability of the full financial support package to all pubs no matter what their rateable value is, as well as to brewers and pubs’ other suppliers. This is to ensure they survive this fire break lockdown and will be able to serve their communities and to support thousands of local jobs and livelihoods once more.’ • SIBA says brewers, who are a major part of the supply chain for pubs in Wales that will now have to shut. CEO James Calder says his members have been hit already by a ‘halt on orders from small independent brewers for fear of having beer sitting unsold in their [pubs’] cellars.’ • SIBA says ‘despite 80% of small brewers’ beer being sold via pubs they do not receive any support from Government when pubs are forced to close.’ It adds ‘small breweries cannot just turn production on and off like a switch and this circuit breaker will mean that more small breweries will be deciding to throw in the towel rather than continue through an extremely uncertain time when they have not received the full financial support other sectors have been given.’ First weekend at Level II for York (and London): • The Evening Standard says ‘leading West End bar and restaurant operators today warned that they will not survive the winter after the “horrendous” first weekend of the capital’s Tier 2 Covid-19 clampdown triggered tens of thousands of cancellations.’ • And this is London Level II rather than Liverpool Level III although, in some ways, Level III would be better for some pubs and restaurants as, one would imagine, even if they supply ‘main meals’, they could choose not to do so for commercial purposes, supply only alcoholic drinks and therefore be ‘forced to close’ and at least get some financial contribution towards staff wages. • Greene King boss Nick McKenzie has told LBC that Tier II is ‘closure in all but name’. • See Premium Email for more comment and analysis. Other comments on shutdowns, Level II & Level III etc. • Hundreds of hospitality workers demonstrated outside the Houses of Parliament yesterday to draw attention to the plight of their industry. More than a half of the population of England is now at Level II or above. Organisers of the demonstration say that there is no evidence that the 10pm curfew will slow the spread of the virus. • Mayor of London Sadiq Khan yesterday said ‘I support those from across our hospitality sector protesting today deeply anxious about their future.’ He says ‘the huge failures in the test and trace system have meant that further COVID restrictions are now necessary, but our bars, restaurants and other venues must now get the extra financial support they need urgently to stay afloat.’ • Khan adds ‘the 80 per cent furlough scheme was a lifeline for many businesses at the start of the pandemic, and it is this level of support London’s hospitality sector now needs to prevent further widespread unemployment and ensure this world-leading sector can return to business when the virus is under control. Until the government gets a grip on this virus, ministers have an obligation to give businesses the support they need to survive while restrictions remain in place.’ • Labour Party leader Keir Starmer has called on the Government to enforce a “two to three week” national lockdown, closing hospitality venues while keeping schools open. Starmer says the pubs, bars and restaurants forced to close would be ‘compensated so no business loses out because of the sacrifices we all have to make.’ • The NIESR has said that an earlier lockdown in March would have saved perhaps 20,000 lives. Other pub & restaurant news: • Foodservice analysts Peter Backman reports that the mood across the industry is darkening. He says ‘after a promising summer (reopening, EOtHO, fine weather encouraging people to go out), the outlook is turning darker. Consumers were already forsaking the good eating out habits they had rediscovered in August and then the long heralded second wave struck.’ • LVMH’s wine and spirits division reported encouraging signs of recovery in Q3 following a “significant drop” in Q2. The wine division saw “improving performance” in Europe in Q3, although the US and Japanese markets were still “challenging”. The Hennessy Cognac business returned to growth. • Propel reports that Abokado is to be sold via a prepack with all staff to lose their jobs. The company underwent a CVA in September last year. Although the Covid-19 pandemic was not foreseeable at that stage, the operator clearly did not cut deep enough, • Remy Cointreau has taken a majority stake in champagne producer, Champagne J. de Telmont, for an undisclosed sum. • Puttshack has announced that Logan Powell is to become UK President as well as Group CFO. Hugh Knowles has been appointed UK Managing Director • Four Intu retail sites, Lakeside, Watford, Nottingham’s Victoria Centre and Glasgow’s Braehead centre, have been sold. HOTELS & LEISURE TRAVEL: • UKHospitality Cymru says that ‘another lockdown, even a short one such as this, is a severe blow to Welsh hospitality and tourism.’ It says that, as a sector, ‘we can lead on safe socialising, helping make sure people across Wales can meet friends and family safely in a licensed, protected environment.’ • The World Tourism Organisation is to work alongside the Expedia Group to collaborate on a range of topics aimed at driving tourism recovery’ • UK Inbound has urged PM Boris Johnson to introduce a US-UK travel corridor OTHER LEISURE: • The UK’s video games industry has been booming over recent years. The lockdown earlier in the year helped boost sales. FINANCE & MARKETS: • Ministers have been told £13bn will be needed per annum to retrain 90% of the UK’s workforce over the next decade. The government’s flimsy algorithm told Langton it may have a future as a dressmaker at £13,500 per annum (after training). • Chancellor Rishi Sunak has been warned by the food supply industry that supplies to care homes, schools, hospitals and prisons are not secure unless the government steps in to give money and support to struggling wholesalers RETAIL WITH NICK BUBB: Today’s News: There is no new Retail company news today, but, given the 20% slump in the Boohoo share price yesterday, we ought to flag that the story that PwC is set to resign as auditor to Boohoo was not the only development concerning investors yesterday, as the Sunday Times also ran a News story that the National Crime Agency (NCA) is investigating clothing suppliers of Boohoo on suspicion of money laundering and VAT fraud. News Flow This Week: Thursday brings the Superdry AGM and then we get the much-awaited GFK Consumer Confidence index for October first thing on Friday, shortly followed by the belated ONS Retail Sales figures for September. |
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