Revolution Bars, VAT, supply problems, labour, inflation & other:

A DAY IN THE LIFE:

We rewatched The Woman in Black at the weekend and, though I’d seen it before, it occurred to me that I wasn’t really all that sure as to the story and wondered why that might be.

But, as I was distracted several times during the re-watch, I began to get a few clues as to how my ignorance had come about.

I left the room on various occasions and didn’t watch the screen much. I also took to eating peanuts and crisps, couldn’t hear the dialogue, didn’t ask to be updated and my lip-reading wasn’t very effective, particularly on those numerous occasions when I wasn’t actually looking in the direction of the television.

So, the play remains something of a mystery.

I get it there’s a woman. And there’s a lot of black, quite a bit of mud and a steam-train at the end but, beyond that, nada.

I suppose it means that, as with a number of other areas in my life, I get to be a newbie more than once. On to the news:

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PUBS & RESTAURANTS:

UKHospitality is launching the #VATsEnough campaign to lobby the government to make the 12.5% VAT rate permanent for hospitality and tourism.

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Labour shortages. Bizimply reports that ‘the stark message from Government’ has succeeded in ‘making it clear that industry is expected to compensate for the post-Brexit loss of its EU workforce with higher investment in skills, wages and working conditions.’ Bizimply’s report, From Agile to Fragile, shows that 21% of respondents are taking no additional steps to recruit new employees or retain existing team members whilst only 32% are increasing their training and development. It says ‘just 21% are increasing pay and 10% improving staff benefits.’ More from Bizimply etc.

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Next CEO Lord Wolfson has said overseas labour should be used to solve labour shortages, with companies paying a ‘visa tax’ on these workers.

Job cuts. Not at the moment. The BBC reports that ‘the wave of job cuts many expected at the end of the furlough scheme has not happened.’

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Inflation. Gas prices rose 37% in one 24hr period yesterday to hit their highest prices ever. Unhedged gas companies – that have effectively supplied long and contracted to purchase on the spot market – will find that hard to cope with. Impact on the consumer.

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Inflation. The Institute for Fiscal Studies has suggested that council tax bills may need to rise by up to 5% a year for the next three years. Whilst it doesn’t appear so to the naked eye, the Bank of England maintains that price rises are blips.

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Supply shortages. Whilst politics is clearly involved, business leaders have labelled PM Boris Johnson’s speech to the Tory Party conference as incoherent, boorish and economically illiterate in its call for industry to prepare for problems that the Vote Leave campaign said would never happen. The speech was called “bombastic but vacuous’ by the Adam Smith Institute. Conservative thinktank Bright Blue reported ‘the public will soon tire of Boris’s banter if the government does not get a grip of mounting crises: price rises, tax rises, fuel shortages, labour shortages. There was nothing new in this speech, no inspiring new vision or policy.’

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The Night Time Industries Association (NTIA) has said that Scottish consumers were left frustrated by the ‘chaos and confusion’ of the Government’s vaccine passport rollout last Friday.

COMPANY & OTHER NEWS:

Some big downward moves in shares yesterday but, as the market looks set to open near 100pts to the good today, many of them could be reversed shortly.

Revolution Bars Group has updated on trading saying that, in the period from 19 July to 2 October, ‘our sites have experienced strong demand delivering same site sales growth of 17% when compared to the same period 2 years ago, when the business traded normally pre Covid. Our 56 English sites, which had no restrictions over this period, traded at 21% higher when compared to 2 years ago. In line with the previously communicated plans we have re-commenced our refurbishment programme.’

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Constellation Brands yesterday reported Q2 numbers saying that operating profit was $730m (from $2.3bn of sales) against expectations of around $787m. The company earned 252c per share against estimates of around 280c. Analysts said the numbers were light but that the outlook statement was positive and the company’s shares were little changed pre-opening.

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Kitchen equipment company Welbilt has seen its shareholders approve the group’s merger with Ali Group.

Kitchen United in California has bought software and ghost kitchen developer Zuul. The company says ‘as we looked for opportunities to continue to build upon our leadership position and scale into new territories, strengthening our platform with the addition of Zuul and its cutting-edge ZuulOS technology made strategic sense.’

Anheuser-Busch InBev is reportedly looking to reduce debt by selling off less profitable businesses such as Franziskaner Weissbier, Hasseroeder and Spaten. The portfolio could fetch close to €1 billion, with AB InBev moving towards newer drinks including hard seltzers.

Papa John’s (GB) Ltd reports turnover up 29.7% to £94.9m for the year ended 27 December 2020, stating that the pandemic had a ‘minimal’ impact on its business.

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Tesco reported that its supply chain had demonstrated ‘resilience’ despite a hit from lorry driver shortages and said product availability was currently good across its ranges. The supermarket said it was shoring up its own supply chain through the hiring of 30,000 workers for the looming Christmas season.

Lucy Armstrong has been appointed as Chair of the Board of Trustees of Drinkaware, succeeding Sir Leigh Lewis KCB.

LEISURE TRAVEL & HOTELS:

Carnival has updated on its restart plans saying that it ‘plans for more ship restarts for January and February, as it works towards the return of its full fleet sailing from U.S. homeports in the spring of 2022.’

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HVS comments that rising costs and staff shortages are playing ‘havoc with the UK hotel sector.’ It says higher levels of debt will ultimately have to be deal with, quoting AlixPartners as saying that ‘as we enter the recovery phase the current standstill consensus [on debt] runs the risk of falling away and leveraged covenants will begin to be tested again which may trigger refinancing, restructuring or disposal processes.’

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The Wall St Journal comments on concerns that US hoteliers believe business travel could continue to tail off through the autumn. The WSJ quotes STR in saying that some 1bn US hotel rooms could be booked this year compared with 1.3bn in 2019.

A survey by Savills suggests that serviced apartments are expected to be less affected by the staffing crisis than hotel operators. In terms of the severity of staffing shortages, 17% of serviced apartment operators have had to reduce service levels to cope, compared to 47% across hotel operators.

Travel and tourism’s contribution to global GDP will rise by less than one third in 2021, compared to 2020, according to the World Travel and Tourism Council.

OTHER LEISURE:

Mark Zuckerberg has denied claims that the company prioritises profit over the safety of its users, despite the accusations from whistleblower Frances Haugen. Documents leaked by Ms Haugen included reports such as one that said 13.5% of teenage girls said Instagram increased suicidal thoughts, and 17% said it made eating disorders worse.

Book sales have been elevated during the pandemic with some 202 million paperbacks and hardbacks sold in the UK in 2020. This is the first time the number has passed 200 million since 2012.

FINANCE & MARKETS:

The International Monetary Fund has warned that rising prices could hamper global growth. The Telegraph reports that markets are suggesting that the RPI will hit 7% next year. It says ‘a jump this high would put a huge squeeze on living standards and spark fears of runaway prices with severe economic consequences.’

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The IMF says ‘we face a global recovery that remains ‘hobbled’ by the pandemic and its impact.’ It adds ‘we are unable to walk forward properly – it is like walking with stones in our shoes.’ The IMF has said that its July estimate for global growth of 6% this year will be scaled back next week.

Markit has published the UK construction PMI for September which, at 52.6, shows growth but at a slower rate than the 55.2 recorded in August.

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Intel has said it will not build its proposed European chip factory in the UK. It has told the BBC that, before the UK left the EU, the country “would have been a site that we would have considered”. Now, it says ‘we’re looking at EU countries and getting support from the EU’.

Sterling mixed at $1.3583 and €1.1754. Oil price lower at $80.79. UK 10yr gilt yield down 1bp at 1.08%. World markets lower but going better yesterday and Far East up in Thursday trade. London set to open up around 90pts as at 7am.

RETAIL WITH NICK BUBB:

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