Trading, staff issues, virtual brands, Roadchef, Adnams, Rekom etc.:

A DAY IN THE LIFE:

Thanks for the suggestions re walks in London.

And yes, considering that I’ve lived in London, Cambridge, York, Geneva – and of course, Hull – you also were right to point out that it’s scarcely forgivable that I know the above cities more for their pubs (or lack of them in the case of GVA) than I do for their public appeal.

Further, I agree that the Tower is more than just a tumbledown outhouse, Trinity College’s Great Court is indeed a sixteenth century work of art rather than an annoying bit of greenery you have to cross to get to the bar etc. And York in its entirety is a historical treasure, Geneve’s vieille ville is more than an annoying hill, Mont Blanc isn’t just a white bump on the horizon and Hull is, well, much, much more than just a strange accent and the vague smell of fish and chocolate. 

Aside: If you’ve never heard me Turk, you can get a flavour of it HERE at 6:40 into this video:

So I promise to do better but anyway, it’s the end of a light news week – as can be witnessed by the emergence of yet more stories about Geronimo the Alpaca – so have a great weekend and on to the news:

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PUBS & RESTAURANTS:

Trading:

• Lumina Intelligence says the ‘impact of eased restrictions has yet to be felt for hospitality’. We have a view on this comment that we outline below. The analyst says that a net 93% of respondents to its recent survey found trading ‘net challenging’ compared with only 54% in 2019. Looking on the bright side, the number peaked at 97% in 2020. Some 63% found trading ‘extremely challenging’ (vs 68% las year) and 30% (in both 2021 and 2020) found trade simply ‘challenging. A resounding zero percent (in both years) said that trade was ‘extremely positive’.

• Further comment: See premium email.

Supply:

• Lumina Intelligence has added its voice to those of other operators and observers saying that ‘staffing is a key challenge.’ It says this is ‘exacerbated by Brexit’ and says ‘the online opportunity will grow through delivery and DTC Brands admired for adaptation to and alignment with consumer trends.’ It says ‘pre-existing recruitment challenges – particularly in the hospitality market – have been worsened by Brexit with over half of surveyed professionals impacted by Brexit-related staff shortages. There is overwhelming demand for more EU workers.’

• Further comment: See premium email.

• The Scottish Hospitality Group has called for a migrant worker visa scheme for the hospitality sector to be introduced. It says that a staff shortage is “preventing businesses from opening to capacity”. The pingemic element of this should be falling away. And furlough finishes at the end of next month so, if things are not much improved by then, depending on your politics, automation, less supply or immigration may be the solutions. The SHG says ‘the issues of furlough, lack of staff and supply chain complications are jeopardising hospitality’s ability to try and scrabble back to pre-COVID trade levels.’

Other developments:

• Feedback. See premium email.

• Virtual brands are being tested out by a number of operators. Brinker International in the US has made a success of its virtual brand ‘Just Wings’ and it is reported to be rolling this out via the introduction of Maggiano’s Italian Classics. But what is a virtual brand?

• Further comment: See premium email.

• The IROAR (the Independent Restaurant Owners Association Rescue), which represents around 50 businesses in two boroughs in New York, is reported to be suing New York City Mayor Bill de Blasio for demanding that customers and employees effectively show vaccine passports if they want to dine indoors.

Company news:

• Roadchef is reported to have expanded its outdoor catering options by adding new open-air food huts at some sites across its motorway service area network. It says this is to accommodate the high volume of road users expected as a result of increased staycations this year. Roadchef says ‘we’re anticipating a busy summer ahead as travellers take to the roads and visitor numbers increase. Our new food huts provide even more options for those looking for a tasty treat to enjoy as they stop and de-stress at one of our regional sites or if they just need a grab-and-go option on the way to their staycation.’

• Further comment: See premium email.

• Suffolk brewer and hospitality company Adnams has said that it made a pre-tax loss of £3.3m in the H1 to end-June compared with £4.3m of losses in 2020 as a whole. The company’s chairman, Jonathan Adnams, says the ‘team has performed admirably throughout a series of lockdowns and when called upon to reopen the business.’ He says ‘the adaptability and resilience within our culture has meant that we have been able to deal with this uncertain and fast changing situation in the best way possible, taking our customers with us and positioning us for future success.’

• Mr Adnams says ‘we are pleased at the prospect of unrestricted trading and that the vaccine roll-out and vaccine efficacy has enabled the country to reach this stage. However, we have also always been clear that any release must be sustainable and unreversible.’ He adds ‘given current data and the ‘mood music’ coming from Government and the medical community, we will continue to take a cautious stance to ensure the business, our staff, our pubs, and our customers are protected for the future as we deal with those ongoing uncertainties.’ The company is ‘cautiously optimistic that the worst of the pandemic is behind it and that the on-trade will be able to progress relatively normally into the autumn and beyond.’

• Adnams yesterday pointed to import difficulties regarding wine. It says there is some stockpiling going on. CEO Andy Wood says ‘we did have a bit of a skew towards Europe, and we are trying to manage the supply so we get wines from the rest of the world as well.’ He says ‘we’re paying more, and it’s taking longer for us to get wine in from around the world and Europe. That means we’re having to stock more, so that means we’re having to fund more stock in the system.’ This will have a working capital impact and cost increases are likely to be passed on to the consumer.

• What goes around. Amazon is reportedly set to open large department stores in the US.

• Some degree of normality. Car use in the UK is said to be up to pre-pandemic levels.

• Chipotle Mexican Grill is reported to be testing meatless chorizo in Denver and Indianapolis. It says ‘plant-based lifestyles have continued to accelerate in popularity, and as a long-time leader in the category, we are exploring ways to give more variety to our fans.’

• Rekom UK (formerly Deltic) has said that it has seen a rapid return to its clubs with trading currently up 150% on 2019. CEO Peter Marks told the MA that demand has “never been higher”. He says ‘since reopening, we have noticed more pre-booking than usual as people want to make sure they can get in, but the majority of our customers are still walk ins, as it was pre-pandemic.’ He says that cocktail sales are booming and says ‘there is a clear high demand for clubbing now that we are back open again – particularly for young people, many of whom were hit hardest by Covid-19 restrictions while at university or entering the job market despite being part of a low risk group. They are excited to enjoy a night out after all this time and regain some of what has been lost since March 2020.’

• Salcombe Brewery Co has appointed Jordan Mace to the newly created role of Commercial Director.

• Ponti’s Restaurant is reported to have negotiated a short-term working capital injection of £100k from Reward Finance Group.

• London-located plant-based restaurant KOJO is to open a second site this month.

• UKH has announced that Business Secretary Kwasi Kwarteng will be the headline speaker at its annual conference on 20th September at the RAC in London.

HOTELS & LEISURE TRAVEL NEWS:

• Covid testing. The BBC reports that the CMA says it told the government back in April and May that its Covid PCR testing regime could lead to customer abuse.

• UK Inbound has said its industry is on the “cusp of recovery”. It is asking, however, for the furlough scheme for the tourism sector to be extended until the end of April 2022. UKH says 82% of tour operators have seen their incomes drop by more than 90% since March last year.

• Further comment: See premium email.

• UK Inbound goes on to say that a third of hospitality businesses operating in this market do not expect to survive more than six months if they do not receive greater support.

• Visit England says that visitor attractions in England saw visitor numbers fall by 65% in 2020 vs 2019. Revenue was down by 55% year on year. Visit England says that art galleries and museums saw the most material drops due to the periods of enforced closure.

• Business travel services company SAP Concur says that 40% of small businesses fear that their operations may suffer if business travel does not pick up in the next 12 months. The company says ‘travellers from within small businesses see an even greater need for business travel than their counterparts at larger companies.’

• More Eurostar trains are being laid on as demand picks up.

FINANCE & MARKETS:

• Toyota is cutting production due to a shortage of microchips.

• The Guardian fears that UK beet farmers could be crushed by Australian imports. Major customers include Cadbury and Coca Cola as well as Silver Spoon. They will be able to source their product cheaper abroad.

• Sterling weaker at $1.3633 and €1.1665. Oil lower at $66.59. UK 10 year gilt yield down 2bps at 0.55%. World markets mostly sharply down yesterday. London set to recover & open up by around 10pts (as at 7am).

RETAIL WITH NICK BUBB:

• Nick is on a well-earned break. Back after the Bank Holiday.

TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 17 Aug 21 Fulham Shore FY results

• 17 Aug 21 Just Eat Takeaway.com H1 numbers

• 18 Aug 21 Carlsberg H1 numbers

• 19 Aug 21 Rank FY numbers

• 1 Sept 21 PPHE H1 numbers

• 2 Sept 21 Jet2 AGM

• 9 Sept 21 Gear4Music AGM

• 15 Sept 21 Restaurant Group H1 numbers

• 21 Sept 21 Compass Group full year update

• 22 Sept 21 Ten Entertainment H1 numbers

• 23 Sept 21 Playtech H1 numbers

• 1 Oct 21 JW Wetherspoon

• 5 Oct 21 Gregg’s Q3 update

• 13 Oct 21 Marston’s FY trading update

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 26 Oct 21 Campari Q3 numbers

• 23 Nov 21 Compass Group FY numbers

• 24 Nov 21 Britvic FY numbers

• 30 Nov 21 Marston’s FY numbers

• 8 Dec 21 TUI FY numbers

LANGTON CAPITAL: Made in Hull. Like all the best things. Langton Capital is a financial advisory company providing insightful views on the UK and global leisure industry and the wider consumer sector in general. Subscription to the daily email is free. Unsubscribing is painless. We provide daily off the shelf and bespoke research. We have helped with transactions, fund-raisings, disposals and other corporate issues. We have a good ear, we are impartial, independent and not half bad at what we do. If you think that we could help you or your business, drop us a line.