Langton Capital – 2021-09-24 – Furlough, VAT, inflation, confidence, WFH, staycations & other:
Furlough, VAT, inflation, confidence, WFH, staycations & other:A DAY IN THE LIFE: Human nature is as old as, well, humans. And you can feel it all around you in what we do, how we do it and the like and the idea that there are ‘tipping points’ is a compelling one because we want to ‘fit in’. That suggests that changes – like wearing a mask on trains or not wearing one (when it is ‘voluntary’ – don’t happen in smooth lines but progress to a certain point and then tip all the way in a ‘what the heck’ kind of response. Which seems to be happening at the moment. Or maybe some trains (up to York, pre-stag night on a Friday vs a commuter train) are different to others. But the same can happen in a ‘good’ direction. Often this is nudged (or given a hefty barge) by legislation – e.g. seatbelts or drink-driving – but sometimes it isn’t quite as draconian – like dog-fouling or spitting on the pavement – but the move still happens due to the power of the tut or the sadly shaken head. And we’re none of us immune. You might take your mask off (because you don’t want to look scared) and then put it back on again (because you don’t want to look like a denier or cop one too many stern looks) and you might find yourself doing the above more than once on the same journey. Understanding the above is a valuable skill for politicians and maybe that’s why there are lots of students of the human condition in government and relatively few accountants. Said the accountant. Anyway, weekend, fine weather, have a good one & on to the news: LANGTON EMAIL: The Free Email is now written in short form. Full stories are in the Premium Email. Reply to this email if you would like to upgrade. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new format. Prices for the Premium, unchanged for 2yrs, are £295 for one subscription, £495 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE PUBS & RESTAURANTS: The Lumina Intelligence UK Pub & Bar Market Report 2021 predicts that the UK pub and bar market will recover to nearly two thirds of its pre-pandemic value in 2021 with a full recovery expected by 2024. • See premium. Reply to this email to upgrade. The furlough scheme ends in a week’s time. With the labour market strong, to the extent that the vacancies are where people want to work, it’s probable that job losses will be kept to a minimum. • See premium. Reply to this email to upgrade. Inflation. This matters because it impacts costs for operators and it hits the ability of the consumer to spend. There has been more agreement recently that it does exist. The Bank of England has warned again that UK inflation is expected to rise above 4% by the end of the year. Part of this will be driven by VAT increases due next week – with more to come in April next year. The Bank says these are temporary factors. • See premium. Reply to this email to upgrade. In the MA, publicans are being warned about the increase in the VAT rate, from 5% to 12.5% starting next month. Dan Hobbs, partner and VAT specialist at accountancy firm, Carpenter Box, said ‘It is important that these businesses are aware of and prepared for the changes.’ The consumer. The consumer has a bit of a wobble. GfK has released its latest UK Consumer Confidence Index and reports that it ‘decreased five points to minus 13 in September.’ It adds ‘all measures were down in comparison to the August 20th announcement.’ • See premium. Reply to this email to upgrade. The government is to ban restaurant owners banned from taking customer tips and service charge payments from workers under new legislation. This was leaked last week. The change in the rules has become more urgent as the pandemic has increased the use of cards rather than cash with an estimated 80% of all UK tips now on plastic. UKH says it ‘supports the right of employees to receive the deserved tips that they work incredibly hard for.’ • See premium. Reply to this email to upgrade. The BII has said that ‘the future of our nations’ pubs hangs in the balance as their recovery is derailed by escalating costs.’ It says its member insight report shows that ‘84% of member’s pubs’ summer trading was below levels in 2019, with 54% trading below 75%.’ • See premium. Reply to this email to upgrade. The government comments on the move back to the workplace, saying that ‘in the period 8 to 19 September 2021, the proportion of working adults in Great Britain who in the past seven days: travelled to work (either exclusively or in combination with working from home) increased by 8 percentage points from the previous period (25 August to 5 September 2021) to 65%.’ It says the number that ‘worked exclusively from home remained broadly similar (17% in the latest period, 18% in the previous period).’ The government has said it has to “prepare for the worst” re higher gas prices. This is probably meant to reassure but, as so many of these statements, it has the capacity to alarm. The Night Time Industries Association (NTIA) is launching a legal challenge against the Scottish Government over its lack of consultation on vaccination passports. It said that the vaccine passport scheme as currently proposed raises serious issues with definition, market distortion, discrimination, resource allocation and economic impact. Comparethemarket.com reports that Brits tip an average of £4.64 after a meal or drink experience. • See premium. Reply to this email to upgrade. Per Sky News, Brits might face higher Christmas tree prices this year as a shortage looms due to post-Brexit regulations and a stretched labour market. Company & other news: The Times reports that coffee chains are reporting that trade is returning to pre-pandemic levels as workers return to offices. It says some ‘are dusting off expansion plans others are being more cautious.’ A number of operators laid off staff last year and many are ‘agreeing reduced rents on existing sites where landlords are willing to negotiate attractive deals to take on new ones.’ Environment secretary George Eustice has said that the government is considering making changes to the UK’s visa system in order to allow in more foreign workers. Hotel Chocolat has reported that it will be delaying the publication of its full year numbers saying ‘the Group’s auditors, BDO LLP, have requested additional time to complete its audit processes.’ It says ‘the Company will now publish its 2021 preliminary financial results for the year ended 27 June 2021 (“2021 Results”) on 5 October 2021.’ The Company emphasises that the delay arises from undertaking the ordinary course audit process that BDO is required to perform and not as a result of any concerns relating to its 2021 Results. PizzaExpress has hired Clive Bentley as Global Property Director. Bentley was Property Director for Holland & Barrett (800 UK stores and 500 internationally), and Global Property & Commercial Director at Costa. Per the MCA, Inception Group co-founder, Charlie Gilkes, states that late night venues are increasingly competing with the entertainment people can enjoy from the comfort of their sofas. Gilkes said venues have to provide consumers with ‘something you can’t put on the back of a scooter’. Cask Ale Week kicked off yesterday with a range of activities and promotions across the sector. HOTELS & LEISURE TRAVEL NEWS: Hoseasons suggests that the staycation boom will continue into 2022. It says 28% of those polled preferred a staycaytion over a holiday abroad. Hoseasons says ‘staycationers are already snapping up the best breaks and securing the best properties to make sure they don’t miss out.’ • See premium. Reply to this email to upgrade. Virgin Atlantic predicts that corporate business could return to pre-pandemic levels in 2024, with small and medium-sized organisations spearheading the recovery. The airline said bookings to the US – which traditionally accounts for 70% of its network capacity – rocketed 600% overnight following the announcement. Oyo, the Indian budget hotel chain, wants to file for an IPO on Indian stock exchanges as soon as next week, according to TechCrunch. The firm, which counts SoftBank, Lightspeed Partners and Airbnb among its investors and was most recently valued at $9.6bn. STR reports that U.S. hotel occupancy reached a four-week high in the week to 18 Sept of 63% (still down 11.6% on 2yrs ago). Average rate was down 2.6% on 2yrs ago and REVPAR, at $82.50, was down 13.9% on 2019. • See premium. Reply to this email to upgrade. FINANCE & MARKETS: The Bank of England has said inflation will hit 4% in Q4 and could stick at that level into Q1 and Q2 next year. It has also reduced its estimate for growth in the UK. • See premium. Reply to this email to upgrade. The Bank of England’s MPC has held interest rates at 0.1%. It voted by a majority of 7-2 to continue with its £895 billion bond purchasing programme. Flash PMIs point to further slowdown. • See premium. Reply to this email to upgrade. BP reports it has had to “temporarily” close some of its petrol stations due to a shortage of lorry drivers. Brexit has caused what the Guardian says is a ‘huge drop in Great Britain to Ireland exports in 2021.’ It reports Irish government figures as saying that GB exports to Ireland fell by almost £2.5bn in the first seven months of the year with Brexit emerging as a major factor. Imports into Ireland from GB were reported to be down 32% in the first 7mths of the year. Sterling higher at $1.3722 and €1.1689. Oil price higher at $77.42. UK 10yr gilt yield up 12bps at 0.92%. World markets broadly better yesterday with London set to open up by around 5pts as at 7am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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