Langton Capital – 2021-06-30 – Footfall & changed working habits, supply lines, labour & costs etc.:
Footfall & changed working habits, supply lines, labour & costs etc.:
A DAY IN THE LIFE:
There may be a few sore heads around this morning and, after what was a truly memorable match, all we can say around here is that we’re glad it didn’t go to extra time and penalties.
A bit time pressured as a result of the match so, without further ado, let’s move on to the news:
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PRIVATE COMPANY ACCOUNTS – TIMOTHY TAYLOR & CO LTD:
• Keighley-based brewer and pub co Timothy Taylor has reported numbers for the year to end-September 2020 to Companies’ House. See premium email.
PUBS & RESTAURANTS:
• England’s progression through the round of 16 to the quarter-finals of the Euros (match to be played 8pm Saturday) will provide a boost for pubs. It could be moderately negative for food sales, restaurants and indoor leisure companies. In a normal year, there would be a boost to holiday sales, both domestic and overseas, when or if England exits.
Different working & living habits:
• B2C businesses need customers and habits – including where people live and work – may be changing. The Telegraph quotes analysis carried out by consultancy Advanced Workplace Associates as concluding that ‘London risks losing more than 835,000 jobs as the pandemic sparks a permanent shift in working patterns’. It says that ‘around two out of five people living in the capital’s 14 central boroughs could do their roles from elsewhere.’
• UBS has said that up to two thirds of its staff will be allowed to work from home on a part-time basis. The FT has seen a memo suggesting that the move is to differentiate the Swiss business from its American dominated rivals who, for the most part, seem to be insisting that staff get back into the office. The memo says ‘we’re committed to offering you the flexibility for hybrid working (a mix of working from the office and from home) where role, tasks and location allow.’
• The above moves could influence where people spend their time and their money. There are implications for sandwich shops, coffee shops, cafes, pubs, bars and restaurants and, indeed, for the space that they and the offices around them will need and the price that they will be willing to pay for it.
• Further comment. See premium email
Food and drink supply:
• There are physical issues in getting food (and drink) to market and to hospitality venues. Road haulage sources believe the UK could be short of up to 100,000 lorry drivers and The Guardian says that bosses have written to PM Boris Johnson calling for ‘an urgent intervention to allow eastern European drivers back into the country on special visas, similar to those issued to farm pickers.’ Tesco says that the driver shortage is affecting fresh food with a short shelf life most acutely.
Labour shortages & costs:
• Per Morning Advertiser, pub operators are boosting wages in a bid to protect themselves against the sector’s staff shortage. Pierre Needham, head chef at the Teatro restaurant in Gloucestershire, said ‘Hospitality has seen droves of staff leave the sector during Covid simply because they’ve had a taste of the good life – hours limited to 45 a week, evenings and weekends off, overtime etc.’
• Big Hospitality reports that Youth Mobility and Graduate Visa schemes can offer a short-term fix to the hospitality skills gap, but that longer-term solutions are still needed. The report suggests that recruitment strategies will be impacted going forwards as the right to work and live in the UK will now be more restricted for EU citizens.
Other covid news:
• Fully discounted business rates will end from tomorrow, Thursday 1 July. However, they will not go back up to the standard rates but will be reduced by about two thirds (67%) up to £2m for closed businesses with a lower cap for those who have been able to reopen. The return marks an end to the 15 months exemption period during the height of the pandemic.
• Further comment. See premium email
• South African president Cyril Ramaphosa imposed a 14-day ban on alcohol, which started on 27 June. Ramaphosa said the move was necessary to ease pressure on hospitals caused by emergency incidents related to alcohol consumption, as the country experiences its third wave of coronavirus.
Company & other news:
• Heineken has taken majority control of United Breweries, India’s biggest brewer, after buying another c40m shares in the company. Heineken used to have 46% of the company and it now has c60%.
• Australian wine company Accolade Wines has bought pear cider brand Lambrini for an undisclosed sum.
• Nichols’ brand Vimto reports it is ‘set to revive the iconic SLUSH PUPPiE frozen drink brand in the UK, following a significant new agreement with the brand’s US owners, J & J Snack Foods Corp.’
• See Finance & Markets for consumer credit trends.
• German Doner Kebab will open its 65th site in the UK, with the latest one being its new flagship at the O2 arena. The company plans to open 47 restaurants in the UK this year.
• Windsor & Eton Brewery, which is crowdfunding on the Seedrs platform, has raised £432k from 181 investors. The company had initially targeted £300k.
• Provincial Hotels & Inns has entered into administration. The Lancashire-based company owns four pubs and one hotel. Patrick Lannagan, administrator, said ‘Given the popularity of the pubs and hotel, the joint administrators are confident of achieving a positive outcome for the sites.’
• THIS, a plant-based meat brand, has secured an £11m investment for its expansion plans in a funding round led by BGF. Andy Shovel, co-founder of THIS, said ‘this investment will unlock the most exciting new product development schedule. We’ve got some wacky plans for new tech and a huge line up of plant-based products’.
HOTELS & LEISURE TRAVEL:
Legislation (comes from overseas as well as the UK).
• Travel isn’t currently simple. Further comment. See premium email
• The Guardian reports that negotiations with Brussels regarding Covid passports for British citizens are ‘nearing completion’ despite Germany’s attempts to convince popular destinations to pull an ‘emergency brake’ on UK visitors. The passports would give more certainty of the prospect of summer holidays for many British holidaymakers.
• The Department for Business has said that foreign business leaders will not have to quarantine when coming to England if there is a benefit to the UK in their visit. The Dept says ‘this exemption is designed to enable activity that creates and preserves UK jobs and investment, while taking steps to ensure public health risks are minimised.’
Company & other news:
• Tui has cancelled all holidays to more than a dozen destinations until at least 21 July as it makes plans in line with latest Foreign Office (FCDO) travel advice. Destinations include Turkey, Croatia, Cyprus, Italy, mainland Spain and the Greek islands.
• ABTA have sent an open letter to Chancellor Rishi Sunak and secretary of state for transport, Grant Shapps, calling on the govt again to provide tailored financial support to travel agents, add more countries to the green list and remove quarantine by the end of July for fully vaccinated travellers to amber list countries.
• Saga Holidays reports that it saw a surge in searches and bookings on its website after the government expanded the travel green list. The over-50s operator described Madeira, Spain and Sicily as top sellers while requests for brochures rose by 67% over the past week.
• Hyatt Place will open its first central London hotel, located near Aldgate East station. The hotel has 280 rooms, as well as a restaurant on the lower ground floor, a bar and terrace, and a full fitness centre.
• STR quotes a new report from The Highland Group, which shows that extended-stay hotels’ revenue per available room is now at 90% of its 2019 level. This represents a faster recovery than that of other segments.
• Duolingo has filed for an IPO, with the language learning business last valued at $2.4bn.
• Hangloose has opened the new Skywire, England’s longest and fastest zipline at Bluewater. It says ‘the zipline is just the first of a number of sensational adrenaline activities that will be added over the next two years. The plans include Britain’s only outdoor Skydive machine, one of the largest swings in Europe, a bungee jump, a massive climbing wall and more.’
FINANCE & MARKETS:
• The Bank of England has reported that households took on more consumer credit than they repaid in May for the first time since August. Net consumer credit borrowing was £280m in May, reversing the trend of paying down debt. Credit card lending was relatively weak with £101, repaid in the month.
• Mortgage approvals for house purchases rose to 87,500 on the month, up from 86,900 in April.
• Eurozone economic sentiment hit a 21-year high according to the European Commission’s economic sentiment indicator, which tracks business and consumer confidence.
• The Nationwide reports that house prices in the UK rose by 13.4% in the year to June.
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