Trading, labour, products, London, coffee, Tasty, Carnival & other:

A DAY IN THE LIFE:

Petrol drama.

Well, diesel actually and, spoiler alert, it was a happy ending as it was 6th time lucky for Langton as we managed to secure a tank full of the stuff over the weekend, the alternative being perhaps the world’s weakest excuse for not attending a niece’s twice-postponed wedding in Hull next week, namely, we haven’t got enough fuel to get there and back.

Not that the procurement wasn’t without a bit of drama itself because, when you haven’t got enough diesel to go looking for diesel, it can be a bit nerve wracking and, with Asda, Morrison’s and one of the Shell garages shut, another Shell and Sainsbury out of diesel but still long of unleaded, it was looking a bit grim until we decided to sink everything on an 8 mile jaunt (16 mile roundtrip) to a garage on the A1079 where urbanites would have been less likely to tread which, when you’ve only got 14 miles in the tank, was a bit of a Kamikaze, no coming back, kind of journey.

Still, that’s all in the past now. At least until the next time but, talking about excuses, our daughter won’t eat our home-grown runner beans because they make her teeth squeak.

Fair dos, she has a point. On to the news:

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PUBS & RESTAURANTS:

Trading & return to ‘normality’:

Per the ClearSight Recovery Tracker, there has been a clear shift in mindset over the last month, with more readiness to re-engage with the out-of-home economy among Brits.

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A reminder that the furlough scheme ends on Thursday. 

Per CGA’s Drinks Recovery Tracker, average drinks sales by value in the week to 18 September were down by 5% on the same week in 2019, but trading remains solid given the context of major challenges.

In the US, SeeLevel HX reports that speed of service in the drive-thru segment has slowed by nearly 26 seconds year-over-year, from 356.80 seconds in 2020 to 382.39 seconds in 2021. Order accuracy also declined this year, with inaccuracies for 15% of all orders in 2021 versus 13% in 2020.

The latest Lumina Intelligence UK Pub & Bar Market Report has shown that the UK pub and bar sector saw a net loss of 1,930 units during 2020.

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Labour shortages. A report by accountants Grant Thornton has found that there are almost 1m job vacancies in the UK with a half of them in the food and drink sectors.

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Fuel & delivery problems. The government has proposed allowing some 10,000 temporary visas to be granted to delivery drivers and agricultural labourers. Business group the BCC said that the c5k visas to be offered to foreign HGV drivers are the ‘equivalent of throwing a thimble of water on a bonfire.’ Transport secretary Grant Shapps says that the crisis has forced him to make this concession and added that he ‘didn’t necessarily want to’ let in overseas workers.

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The government is reported to be set to suspend competition laws and to bring in the army to deal with the crisis. The trade has said between 50% and 85% of petrol stations are now out of fuel.

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Sales of cask beer down by 76 million pints (some 40%) since pubs reopened, says the BBPA. The BBPA has highlighted the plight of cask ale since COVID and it urges further support for the industry during Cask Ale Week.

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The consumer:

Research from the CEBR shows the nation’s poorest families will take the biggest hit as the energy crisis bites, with energy bills set to soar by more than £300 next year. Its forecasts for The Telegraph show the lowest income households are expected to pay an extra £258 a year, but a much bigger share of disposable income at 16%.

NIC rises, VAT hikes and now the BBC reports ‘hundreds of thousands of people are facing uncertainty over their household energy bills after the collapse of suppliers in recent days.’

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World Health Organisation calls for further reductions in alcohol consumption. The WHO’s draft ‘global action plan’ targets a 20% reduction in drinking per head by 2030.

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Mayor Sadiq Khan says that London has been ‘hollowed out’ by the pandemic, with the upheaval accelerating the move away from city centres.

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Product shortages.

Farmers are warning of a turkey shortage. The government is proposing 5,500 temporary visas for overseas staff but turkey farmer Paul Kelly told the BBC the damage had already been done.

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Marco Digioia, the head of the European Road Haulers Association, has said plans to issue temporary visas to thousands of lorry drivers is far too little to resolve Britain’s supply-chain crisis and is unlikely to attract them to the UK.

The British Takeaway Campaign has called on the Government to ‘scrap the scheduled VAT increase and freeze VAT at 12.5%.’ it says that, without a freeze, ‘struggling small businesses will be forced to pass on the increase to customers, pushing up prices.’

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The Times reports that ‘coffee chains are reporting that trade is returning to pre-pandemic levels as workers return to offices but while some are dusting off expansion plans others are being more cautious.’

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Company & other news:

Tasty has reported H1 numbers for the 26 weeks ended 27 June 2021 saying that revenue was £11.6m (up from £8.7m last year) and adjusted EBITDA was £0.8m vs a loss last year of £0.1m. The company says the loss after tax was £2.7m vs a loss last year of £11m. The group is ‘currently trading from 49 of 54 restaurants – with temporary closures throughout the half-year due to Covid-19.’ It says ‘staff shortages have also forced temporary closures and prevented the re-opening of some of the Group’s sites.’ It says, overall, that ‘trading post period end to date has exceeded management’s expectations.’

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North Bar/North Brewing Co director John Gyngell said ‘The local operators make Leeds stand out, It’s not a huge city so if you come to operate here don’t expect Manchester or Birmingham.’

Popeyes is set to open its first UK site in London’s Westfield Stratford. Popeyes CEO Tom Crowley said ‘It’s fantastic to be opening our first UK location, following the months of anticipation and buzz the news of our arrival generated’.

Tortilla has announced its intention to float on AIM, with the 62-strong chain of Mexican restaurants having established a track record of strong financial performance driven by consistent expansion of the property portfolio and like-for-like growth.  

HOTELS & LEISURE TRAVEL NEWS:

Carnival Corporation last Friday reported a Q3 net loss of $2.8 billion, despite cruises in the quarter being cash flow positive.

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Eurostar boss Jacques Damas has said there was a significant uptick in September bookings as the business market returned to travel. Business travel was up 62% in the first two weeks of September on the fortnight before.

Travelodge is hiring for 750 positions with Craig Bonnar, Travelodge CEO, saying ‘if you have passion, determination and a real desire to look after people then we will help you learn the rest. Joining Travelodge also opens the door to training, coaching and career progression.’

Supercity Aparthotels has secured a grade II-listed building in Leeds city centre, due to open in 2023.  

The airport on La Palma was forced to close at the weekend due to further volcanic explosions. It is now once again operational.

OTHER LEISURE:

Moody’s reports that Flutter Entertainment’s settlement ‘for the ongoing Kentucky legal proceedings that includes a $200 million payment by Flutter to Kentucky in addition to $100 million previously forfeited to the state as part of the supersedeas bond in the case…is credit positive because it is an affordable outcome for Flutter and will put these legal proceedings behind it.’

FINANCE & MARKETS:

• London has retained its no2 slot behind New York in the latest Global Financial Centres Index. GRCI says ‘the relatively strong performance of New York and London suggests that the financial services sectors in these cities managed to sustain their performance despite radical changes in working practices during the last 18 months.’

• Sterling weaker at $1.3674 and €1.1664. Oil price higher at $79.15. UK 10yr gilt yield unchanged over the weekend at 0.92%. World markets mixed on Friday but US and Far East better. London set to open some 74pts higher as at 7am.

RETAIL WITH NICK BUBB:

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TRADING STATEMENTS & EVENTS:

Upcoming results are set out below:

• 24 Sept 21 GfK UK Consumer Confidence numbers

• 28 Sept 21 Escape Hunt H1 numbers

• 28 Sept 21 AG Barr H1 numbers

• 29 Sept 21 Fulham Shore AGM

• 29 Sept 21 SSP Group pre-close trading update

• 30 Sept 21 New River investor day

• 30 Sept 21 Diageo AGM

• 1 Oct 21 JW Wetherspoon

• 4 Oct 21 Rank Group AGM

• 5 Oct 21 Gregg’s Q3 update

• 5 Oct 21 Hotel Chocolat FY numbers

• 6 Oct 21 Constellation Brands Q2 numbers

• 8 Oct 21 Hollywood Bowl FY update

• 13 Oct 21 Marston’s FY trading update

• 22 Oct 21 Intercontinental Hotels Q3 numbers

• 25 Oct 21 DP Poland H1 numbers

• 27 Oct 21 Chancellor’s Autumn Budget

• 26 Oct 21 Campari Q3 numbers

• 28 Oct 21 C&C H1 numbers

• 28 Oct 21 YUM Brands Q3 numbers

• 4 Nov 21 Bank of England MPC meeting

• 16 Nov 21 Premier Foods H1 numbers

• 18 Nov 21 Fuller’s H1 numbers

• 18 Nov 21 Jet2 H1 numbers

• 23 Nov 21 Compass Group FY numbers

• 24 Nov 21 Britvic FY numbers

• 30 Nov 21 Marston’s FY numbers

• 6 Dec 21 AB InBev investor seminar

• 8 Dec 21 TUI FY numbers

• 8 Dec 21 SSP Group FY numbers

• 16 Dec 21 Bank of England MPC meeting

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.