Lockdown leaks, younger staff, costs, dark kitchens, FUL, holidays etc.:

A DAY IN THE LIFE:

Thinking about the phrase ‘guilty pleasure’ led me to consider that one of the many unintended or unexpected consequences of the pandemic has been that it’s no longer a guilty-pleasure, or even guilt-ridden at all or indeed much of a pleasure, to take a day off when it’s not strictly necessary ‘to work from home’ – but also to cut the grass, check out the football, spark up the barbie and drink oneself senseless.

Because, we can all now do it.

And, like working out in your early-teens that you can now afford more chocolate than you could ever sensibly eat at one single sitting, there seems to be some link between desire, scarcity, want, guilt and the resultant pleasure of an event that, once broken, can’t easily be put back together again.

So, that’s another thing to blame Matt Hancock for. Must write to Dom. On to the news:

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PUBS & RESTAURANTS:

Trading:

• The leaks to the Press are increasing in volume such that City AM feels able to say ‘England is on track to lift all remaining lockdown restrictions next month, with ministers encouraged that, despite a rise in Covid cases, deaths have remained low.’ Interestingly, deaths on Tuesday were the highest in eight weeks. Nonetheless, the narrative is moving in another direction. An announcement is due on 5 July. City AM says the ‘government is expected to confirm on 5 July that restrictions will be lifted two weeks later, giving the UK a little more time for adults to have a second jab, and therefore the maximum protection available against the Delta variant.’

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Staffing & labour. Unintended consequences:

• The vaccine rollout started with the oldest and most vulnerable in society and, with youngsters not yet vaccinated, restrictions have been partially lifted. This is sensible stuff but it does mean that a larger proportion of those getting ill at the moment (and their contacts) are young people and, as hospitality staff are by-and-large very young, this is exacerbating some already-present staffing problems.

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• Per Bizimply, hospitality employers will need to keep clear records of their team members’ immigration and right-to-work status from 1 July, with employers facing imprisonment and unlimited fines for knowingly employing someone who does not have the right to work in the UK.

Working from Home:

• A City AM opinion piece suggests that ‘older workers planning to work from home permanently are selfishly risking the development of young people.’ Whatever the rights and wrongs of such statements, it is unlikely that city centre office volumes will be getting back to anything like ‘normal’ in the near term.

Inflation:

• As night follows day, commodity and producer prices will (almost always) be carried through into consumer prices. Add inflation in China, the undisputed workshop of the world, and higher freight costs and prices will rise. The BBC says ‘cost pressures on UK firms have gone up at a record level, suggesting that the current surge in consumer prices may be more than just a blip.’ See our previous comments on the vested interest of some bodies in pushing the ‘blip’ theory.

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Delivery & Dark Kitchens.

• The Local Data Company looks at the market for dark kitchens. It says various industry figures confirm how important the ‘at home’ market has become for the food and beverage sector; ‘not only as a revenue stream unaffected by changing lockdown rules, but also as a way for their brand to reach a new audience.’ It says dark kitchens are one way of centralising delivery and preserving food quality on what could be rather long journeys otherwise.

• LDC says ‘dark kitchens are one of ways surplus space can be utilised.’ It says the ‘location of these units is critical, not only do they require the square footage for a fully functioning kitchen, but they also need to be situated in an affluent, residential catchment in order to be close by to consumer’s homes. These units tend to be in residential areas within city centres, with a large proportion of residents who do not own a private car but are relatively affluent with disposable money to spend.’ There will need to be transport links (both for inbound and outbound deliveries) and ‘often these locations would not be appropriate for the same brand to open a full customer-facing unit due to location and as such costs tend to be lower (at the moment anyway) for these units.’ LDC says ‘an example of a brand that has focused on this strategy is Wagamama, which have opened 5
delivery-only sites across London since the pandemic under a new fascia of Wagamama Delivery Kitchens.’

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Company & other news:

• The Times comments on Franco Manca owner, Fulham Shore’s positioning saying that the group ‘targets ten to twelve openings this year, and is hoping for fifteen to sixteen next year. New flags on the map will include sites in Cardiff, Cheltenham, Norwich, Manchester and St Albans.’ The deals (and indeed the quality of the sites) being offered by landlords are very much improved. The Times adds ‘there are strong rumours that Fulham Shore is close to signing up franchisees to take the Franco Manca brand overseas…probably to Portugal and Greece.’ The paper says ‘the company is trading strongly.’

• In a letter to the Institute of Directors and R3 Business Secretary Kwasi Kwarteng said the govt will take a ‘cautious approach’ to firms that owe it money in the wake of the coronavirus pandemic.

• The Good Beer Co teams up with Royal Voluntary Service and Together to recruit pubs and breweries to be part of ‘Cheers For Volunteers’ on Thank You Day.

• Marmadukes, a Sheffield-based cafe chain, opened its third site in the South Yorkshire city on 23 June.

• High Street blow. Lloyds Banking will close 44 branches due to a lack of customers at the sites as people move to digital banking. 

• Figures from France’s official Champagne body show May champagne shipments are up almost 13% compared to the same month in 2019, and up 150% on May 2020.

• Next week, Nestlé will launch Wunda, a plant-based milk alternative, in Tesco and the Co-op.

HOTELS & LEISURE TRAVEL:

• The government’s review of the travel traffic light system will happen later today, with speculation that destinations such as the Balearic islands and Malta could be added to the green list.

• Research by Battleface has found that almost a quarter of people plan to travel abroad in 2021 or 2022 for family reasons, while 28% would like a foreign holiday. Almost three quarters are prepared to complete a full vaccination programme in order to travel internationally this summer.

• Travel industry leaders and organisations held events outside the parliaments in London and Edinburgh, and in cities and airports around the UK, to call for the safe reopening of travel, highlighting the impact of Covid restrictions and appealing for more financial help.

• ABTA estimates that 195,000 travel jobs have been lost or are at risk as a result of the pandemic. Tim Alderslade, CEO of Airlines UK said ‘It is now or never for the government to reopen travel and save what is remaining of the summer season’.

OTHER LEISURE:

• The influential public accounts committee has called on the government to offer urgent support to outdoor events organisers as many festivals are facing ‘devastating consequences to their survival’ this summer amid confusion within government over how a £1.57bn post-Covid arts fund will affect the sector. 

• Ministers are pushing ahead with controversial plans to sell Channel 4 as part of a shake-up of the public-owned media industry. Unlike other broadcasters, Channel 4 is currently required to reinvest its profits in new shows, funnelling cash to the independent production companies that make all its programmes.

• Users can now shop on WhatsApp after CEO of Facebook Mark Zuckerberg announced three e-commerce updates – shops on WhatsApp and Marketplace, Shops Ads and Instagram Visual Search.

LATER NEWS – SEE PREMIUM EMAIL:

• In the US, Alignable says 39% of restaurants unable to pay rent in June

• Various Eateries H1: Seen a ‘very strong performance since reopening.’

• Carnival updates on the dates on which its various brands will recommence cruising.

• PPHE ‘unlocks £113.7 million of equity through a joint venture with Clal Insurance.’

• 888 announces partnership with Authentic Brands Group in US

• Genting has invested $4.3bn (£3bn) in Las Vegas

• Sterling up, oil up, gilt yields down, London set to open higher

FINANCE & MARKETS:

• The Markit Flash PMI numbers for May put the cat amongst the pigeons as far as inflationary fears were concerned. Markit says ‘inflation worries have continued to intensify.’

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• The Markit Flash PMIs for May in the UK suggested yesterday that growth continues but that the pace has moderated since April. The announcement mid-May that unlocking was to be pushed back four weeks may have had a dampening impact. The Manufacturing PMI was 61.7 (April 62.9), the Services PMI was 61.7 (April 62.9) and the Composite PMI was 61.7 (April 62.9).

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TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 22 Jun 21 Coca Cola HBC AGM

• 23 Jun 21 UK Markit Flash PMI numbers

• 24 Jun 21 Carnival Cruises Trading Update

• 24 Jun 21 Bank of England MPC meeting

• 25 Jun 21 GfK Consumer Confidence

• 28 Jun 21 Escape Hunt AGM & Q1 update

• 30 Jun 21 Constellation Brands Q1

• 8 Jul 21 Fuller’s FY numbers

• 13 Jul 21 Pepsi Q2 numbers

• 21 Jul 21 Loungers FY numbers

• 23 Jul 21 Premier Foods AGM & Q1 update

• 27 Jul 21 Campari H1 numbers

• 27 Jul 21 Games Workshop FY numbers

• 3 Aug 21 Domino’s Pizza H1 numbers

• 5 Aug 21 Bank of England MPC meeting

• 10 Aug 21 Intercontinental Hotels H1 numbers

• 12 Aug 21 TUI Q3 numbers

• 18 Aug 21 Carlsberg H1 numbers

• 19 Aug 21 Rank FY numbers

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 26 Oct 21 Campari Q3 numbers

• 8 Dec 21 TUI FY numbers

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