Diageo, staffing, inflation, deliveries, genetically altered food, SSP etc.:

A DAY IN THE LIFE:

Don’t you think it’s a bit of a faff keeping all of your devices charged?

I mean, if you have a mobile, a tablet, maybe a Kindle, a Fitbit, a laptop and heaven knows what else, the logjam at the charger can be a bit intense and, try as you might to pre-emptively charge things, it’s only when that little red battery sign starts flashing at you that you take any notice.

Still, we’ve found during the odd power-cut round our neck of the woods just how debilitating power losses can be. I mean not being able to view the telly and instead having to watch the puddle beneath the freezer grow in size is bad enough but, if your phone, laptop, tablet and Kindle all go flat at the same time, then you’re really in trouble.

And, despite buying a couple of power packs and promising myself that I would keep them charged, they’re easier to ignore when they start bleeping at you than almost anything else in the house and hence are invariably at the back of the queue when it comes to charging.

Anyway, in the same way that, whenever the sun’s shining you can’t believe it will ever rain, the mains electric is on at the moment. It won’t fail and, with 11% on my phone and 15% on my tablet and a third of a charge on the laptop, what could go wrong? On to the news:

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PUBS & RESTAURANTS:

The furlough scheme ends tonight and VAT on food & soft drinks goes up to 12.5% (from its current 5% and on route to 20% next April) tomorrow.

Sourcing staff. A survey by the Recruitment and Employment Confederation shows a further rise in employer ‘optimism’ when it comes to hiring staff. The desire to recruit staff is sometimes different to the ability to hire staff as a number of employers are likely to have the same thought at the same time. Here we look at the REC survey, the impact of working from home, comments from Bizimply and the reaction of some companies such as Amazon and Frankie & Benny’s.

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Inflation. Delivery prices are rising, fuel is at 8yr highs, oil is back at $80 and Sterling is weak. Three more gas suppliers collapsed yesterday because they were not charging their customers enough. The Bank of England has accepted that inflation will be 4% this year and it may rise thereafter. VAT rises tomorrow – and again on 1 April next year – and, even the Bank of England, which has been saying that inflation is temporary, looks like accepting that interest rates are probably going to go up next year. Here we discuss the above along with that old smoke-screen, premiumisation.

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The Times warns shoppers to prepare for a “nightmare” Christmas ‘with limited stock on the shelves and higher prices amid labour shortages and shipping problems.’ It says ‘many families will find they cannot get a turkey for Christmas Day and presents under the tree may not meet expectations.’ Kwasi Kwarteng has said that the government may have to call in the army as soon as this afternoon,

New hospitality grouping to advise government on plans to boost the hospitality sector. The council, comprising leaders from 22 hospitality firms and trade bodies including Nando’s, Starbucks, Prezzo, Burger King, Deliveroo, UKH and the BBPA, met for the first time yesterday.

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Shortages. Grant Shapps has both denied and confirmed that Brexit is an ongoing factor in the current driver, product, staff and fuel shortages. Michel Barnier has said empty shelves and closed petrol stations are a “direct consequence” of Brexit. Perhaps he would, wouldn’t he, but PM Boris Johnson has pointed to ongoing problems saying that supply chain failures could last until after Christmas. Regarding fuel, he has urged motorists to only buy what they need. Politics is involved here but it matters because if operators can’s source staff or products, they will not have anything to sell or anybody to sell it.

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Frankenstein food. The BBC reports ‘Brexit paves the way for gene-edited crops’ and adds the British government is to ‘relax the regulation of gene-edited crops to enable commercial growing in England.’ Reducing safety protocols is ‘possible because the UK no longer has to follow European Union regulations, which are the strictest in the world.’

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The consumer:

Scottish Widows has produced its household income survey for Q3 and says that the ‘post-lockdown boost to financial wellbeing fades.’ It says that ‘cash available to spend falls in Q3 as higher prices partly offset pay gains’ and adds that ‘the boost to financial wellbeing triggered by the relaxing of pandemic measures dipped during the third quarter despite the first rise in household income from employment since Q1 2020.’

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Natasha’s Law: UK Hospitality has highlighted guidance for members ahead of the new allergen legislation coming into force. From 1 October, ‘Natasha’s Law’ requires all food businesses to provide full ingredients labelling on food that has been pre-packed for direct sale. CEO Kate Nicholls says ‘we recognise transparency around allergens is a key issue for customers and we continue to support the Government’s agenda on improving food safety and clarity of information available.’

COMPANY & OTHER NEWS:

SSP Group shares were down 5.4% (in a strong market) on its sombre trading update yesterday. Next, which was upbeat, saw its shares rise by 3.9%.

Diageo has issued a ‘trading commentary’ ahead of its AGM later today with Ivan Menezes, Chief Executive, saying ‘we have made a strong start to fiscal 22, with organic net sales momentum across all regions. This reflects excellent execution, as we benefit from resilience in the off-trade and continued recovery in the on-trade. However, we expect near-term volatility to remain, including the potential impact of any future waves of Covid-19.’

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The High Court has dismissed a challenge from a Caffè Nero landlord’s over the company’s restructuring. The landlord, Ronald Young, had challenged the decision of the creditors to approve the CVA but yesterday Mr Justice Green dismissed the challenge and rejected allegations of unfair prejudice.

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Nightcap has announced that it is to lease a further site for its London Cocktail Club brand. It says ‘the site is expected to be open before the end of the calendar year and will have an unrestricted capacity of 230.’ The company says ‘following recent new site activity, Nightcap currently has a further five sites in legal negotiations across several of its brands.’

NewRiver will today host a virtual Capital Markets Event. The company has announced that it has ‘developed a proprietary scorecard based on four key outputs: Resilience, Stability, Repositioning and At Risk.’ It says we will ‘actively exit our at risk “Work Out” assets by the end of FY23.’ CEO Allan Lockhart says ‘our Board is acutely aware that our shares are trading at material discount to NAV’ and adds ‘we expect that with valuations stabilising, an improving market backdrop, a significantly strengthened balance sheet, a reinstated dividend and our clear strategy to deliver attractive returns, the discount should narrow.’

Taco Bell. The MCA points out that ‘since its re-entry into the UK market just over 10 years ago, Taco Bell has been steadily expanding across the UK.’ The operator now has over 70 sites.

Delivery company Parsley Box Group has updated on trading saying that ‘the Group has recorded 18% year on year revenue growth for the 8 months to 31 August with revenues of £17.8m (2020: £15.1m).

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York-based meat substitute business VFC has announced that it is to expand into North America as part of its global growth.

The Champagne grape harvest began on 6 Sept and finished on Monday this week. Details are patchy but the region was hit by the worst frosts since at least 2003 followed by hail and higher than average rainfall.

HOTELS & LEISURE TRAVEL NEWS:

Travel Weekly reports strong demand and price hikes for the Half Term holiday. It says ‘demand for autumn holidays has risen sharply since changes to the UK’s traffic light system and testing requirements were announced earlier this month, with some reporting sales almost back to 2019 levels.’ One operator said that 60% of sales currently being made were still for holidays to be taken in calendar 2021.

The Global Travel Week event has heard from speakers that the tourism industry in Europe may not make a full recovery by 2023. The European Tourism Association says the industry is ‘coming out of a near-total absence of tourism that has lasted more than 18 months.’ It says ‘there is considerable pent-up demand’ but just how robust this is, remains uncertain.

Barclays’ Leisure Rediscovered report has suggested that a continuation of the staycation boom could inject a further £9bn into the hospitality industry.

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Travel union the TSSA has said that there could be major redundancies and a “bonfire” of terms and conditions as furlough ends today. The TSSA says ‘travel companies have struggled through two summers of restrictions on travel, whilst the government has ignored our calls for extra assistance. Now, everyone in travel trade will be paying for the lack of support from government.’

The global cruise industry may have 80% of its ships in operation by the end of this year. It is now at 56% of ships.

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Up to 600 United Airlines employees who have failed to comply with the requirement to be vaccinated against Covid could be fired. The rest of the company’s 67,000 US staff have supplied proof of vaccination, which was required by Monday.

STR has reported that ‘Europe is expected to see an all-time high of hotel openings in 2021, with more than 100,00 rooms estimated for the year.’ Some 50,000 rooms have already been opened to date. Some of the growth ‘reflects delayed 2020 openings and limited cancellations of planned projects to date despite the ongoing pandemic.’

OTHER LEISURE:

Lego has reported profits more than doubled in H1 this year. The company, which has benefited as people have stayed at home, says it has no plans to make ‘extraordinary’ price rises as a result of increased transport costs.

Netflix has purchased Night School Studio, an independent game developer.

London-based games developer LDC reports it has secured £22.5m in investment funds to support its growth.

FINANCE & MARKETS:

The Bank of England has reported that mortgage borrowing rebounded in August after dropping sharply in July as the stamp duty holiday ended. Net mortgage lending increased by £5.29 billion.

The Bank has reported a relatively small £400 million rise in consumer credit in August.

Export demand for British-made cars ‘has collapsed as UK factory output slumped again in recent weeks’ reports the Times. The paper quotes industry data as saying that there was a 27 per cent year-on-year drop in production in August.

Sterling weaker again at $1.3447 and €1.1587. Oil price edging back up at $78.46. UK 10yr gilt yield down 2bps at 0.98%. World markets better yesterday and London set to open up around 25pts as at 7am.

RETAIL WITH NICK BUBB:

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