Chipotle, IHG, Covid, WFH, consumer confidence, inflation, delivery etc.:

A DAY IN THE LIFE:

The words want, think, know, hope, like and believe are amongst the most often-used English verbs, but they do tend to blur a bit.

You may say that you ‘know’ something to be true when in fact you only ‘want’ it to be true.

Or you may ‘like’ it to be true or you ‘hope’ it’s true etc and as we at Langton are as weak in this field as most other folk, when we talk about the likelihood or otherwise of a fourth lockdown, we have to be careful whether we say we know there will not be one, think there will not be or whether it would be truer to say that we hope, believe or would like there not to be one.

Because there’s a lot of conflating going on out there, that’s for sure.

Hopes are trotted out as facts and the like but on to other things as, after a positive PCR test for young Ms Brumby – the schools truly are a cauldron of Covid – we’ve had more than our fair share of dealings this week with the much-improved Track & Trace people.

However, we have emerged victorious as we’ve run the clock down on the daughter’s travel ban and, thankfully, secured two negative PCR tests for Mr and Mrs B that mean we can indeed have the cottage holiday over in the Dales next week that it would have much pained us to give up. 

Hence, there won’t be a regular email for a week. Maybe some ad hoc comments & follow us on Twitter. Have a good weekend and 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 possibility of more trading restrictions:

This is politically toxic at the moment. Kwasi Kwarteng says there will not be a lockdown, Sajid Javid says MPs should set an example and goes on to say that the public should do its bit, implying that, if we don’t, any restrictions could be on us. Mr Javid has rejected calls to go hard and early. The flip side of that could be either ‘watchful waiting’ or ‘dither and delay’ depending on your politics.

• See premium. Reply to this email to upgrade.

Working from home:

City AM reports that footfall in the City of London hit 39 per cent of pre-pandemic levels last month, its highest rate since early 2020 per a study by Agility in Mind. The survey finds that 51 per cent of UK bosses are concerned about productivity. Where people are, physically, matters to pubs, bars and restaurants as bricks & mortar operations cannot simply up sticks and move to the suburbs (and then presumably back to city centres again). More on London, demand implications etc.

• See premium. Reply to this email to upgrade.

The consumer:

Demand hasn’t been as much of a problem coming out of lockdown as might have been anticipated. Consumers had money to spend. Near term signs still look positive but this following wind may be running its course. The Joseph Rowntree Foundation reports that almost 4m British households on low incomes are estimated to in arrears with household bills. Utility and particularly fuel bills are heading one way and one way only. Inflation hits those on fixed incomes (and those with little negotiating muscle), mortgage rates may be going up, National Insurance charges are rising and more.

• See premium. Reply to this email to upgrade.

GfK has updated on consumer confidence in the UK saying that it ‘takes a turn for the worse with four-point drop to minus 17 in October.’ GfK says ‘all measures were down in comparison to the September 24th announcement.’

• See premium. Reply to this email to upgrade.

Supply:

Petrol station stock levels are back to pre-shortage levels. Hopefully, this implies that deliveries will not fail to be made for lack of fuel. Operators will still need drivers to drive their vehicles. The CBI, looking at the bigger picture, reports that almost two-thirds of the businesses surveyed are now warning that shortages of components would hit factory output in the next quarter. More on labour shortages etc.

• See premium. Reply to this email to upgrade.

Consumption.

Talk of a meat tax to incentivise a reduction in consumption is being absorbed by the F&B industry. The latter can adapt (in a way that pig farmers, for example, may not be able to do) but some sort of hint as to which way things could move would be helpful.

• See premium. Reply to this email to upgrade.

Inflation.

More comments from industry yesterday, this time from Unilever. The company updated, saying ‘cost inflation remains at strongly elevated levels, and this will continue into next year. We have and will continue to respond across our categories and markets, taking appropriate pricing action and implementing a range of productivity measures to offset increased costs. We continue to expect that we will deliver in line with our margin guidance of around flat for the full year.’

Bank of England chief economist, Huw Pill, has said that inflation could rise above 5% in the coming months. The economist told the FT that this would lead to a “live” decision on whether to raise interest rates at its rate-setting meeting next month. The Bank has previously said that inflation was transitory but could exceed 4%.

CGA & SLERP ON DELIVERY & TAKEAWAY:

CGA & Slerp have updated on delivery and takeaway sales, saying that they currently ‘ride high for restaurant and pub groups.’ Looking at in September numbers, the analysts say that ‘29 pence in every pound spent with top managed restaurants and pubs goes on food and drink for home.’

• See premium. Reply to this email to upgrade.

COMPANY & OTHER NEWS:

Deliveroo founder Will Shu is under some pressure to give up his golden share, which gives him 20x the voting power of other shareholders, in the company. Deliveroo shares yesterday fell by 4%, giving back slightly more than all of the gains they made the day before on the back of the company’s Q3 trading update.

• See premium. Reply to this email to upgrade.

Black Sheep Coffee reports that it ‘has set its sights on North America’ after receiving funding from a Latvian basketball player. Black Sheep says that, with more than 30 sites in London and close to 50 in total, the company is now focused on doubling the size of its estate by the end of summer 2022, targeting a combination of major cities and regional towns, in a mix of high office density areas as well as highly residential areas.

Chipotle reports Q3 sales up 21.9% at nearly $2bn. Net income more than doubles to $204.4m. In the US, menu price increases have helped Chipotle Mexican Grill protect its margins. The group reportred Q3 numbers yesterday, saying that prices are up by 17% over the year. The company maintains that, if it needs to do so, it can push price further. LfL sales were up 15.1% in the quarter. The company says ‘we’re pleased to see our digital sales dollars continue to grow, despite lapping tough comparisons.’ The company opened 41 new restaurants during the quarter.

GBK Restaurants Ltd yesterday reported to Companies’ House that it had appointed a voluntary liquidator.

Pernod Ricard has reported Q1 numbers saying that it expects to benefit from strong demand in China, the US and India. The company says ‘we are confident but we need to go through Christmas and the Chinese New Year’ in order to have greater visibility. Sales in the US were up 9% and they rose by 22% in China. There were signs of life in the travel market, where sales were up 55% on what had been a dreadful 2020.

The Scottish Licensed Trade Association is calling on Westminster to reform the alcohol duty system in order to create a ‘differential’ between alcohol sold in the on and off-trades.

Restaurant Group’s Frankie & Benny’s trading operation has dropped by Benny’s name from its logo at a newly-refurbished site in Basildon.

Arc Inspirations is to open units in Deansgate, Manchester and its first ever site in the Midlands with Manahatta, Birmingham.

Asahi brand Peroni Nastro Azzurro is launching its first-ever flagship bar in Dubai at InterContinental Dubai Marina. The company says ‘REX Bar, the new rooftop destination, officially opens its doors next month at the elegant five-star hotel, bringing true Italian style to Dubai Marina.’

Amazon and Starbucks are reported to have held preliminary talks over the launch of a jointly-branded coffee shop that uses Amazon’s cashier-less technology per Business Insider.

LEISURE TRAVEL & HOTELS:

InterContinental Hotels Group has reported Q3 numbers saying that it has seen a ‘significant improvement in trading’. CEO Keith Barr says ‘trading continued to improve significantly in the third quarter. RevPAR recovered closer towards pre-pandemic levels as more and more guests returned to our hotels around the world. Domestic leisure demand was particularly strong in a number of markets over the summer, where occupancy and rate climbed back to 2019 levels. Discretionary business travel, group bookings and international trips have also shown increasingly encouraging signs, on top of continuing good levels of essential business demand.’

• See premium. Reply to this email to upgrade.

EasyJet reports that almost four million Brits still plan to holiday abroad in what is left of this calendar year. It says ‘with foreign travel becoming a lot easier and simpler for families, friends and solo travellers, we’re seeing even higher levels of consumer confidence in bookings for holidays abroad for the rest of this year.’

The UK Board of Airline Representatives suggests that the UK government will retain its red list of countries.

Jet2holidays has put its 2023 summer sun programme on sale. This is much earlier than would otherwise be the case. The group is doing so in order to capitalise on current strong demand for holidays. CEO Steve Heapy says ‘this is the earliest we have ever put our summer sun programme on sale because we know that customers want something to look forward to more than ever before.’

• See premium. Reply to this email to upgrade.

Capital One UK says that vouchers received for cancelled events and holidays average around £508 for events and £1,606 for holidays. These amounts represent monies owed by companies to their customers.

The Global Business Travel Association has conducted a poll and believes that optimism in the business travel industry is rising. It says 52 per cent of respondents said they were more optimistic than they were last month (compared to 22 per cent in the September poll). The GBTA says ‘we’re delighted to see the opening up of borders and a return to non-essential business travel. While we have seen ever-increasing domestic and short-haul travel, a more accelerated recovery has been hindered by the lack of international transatlantic travel.’

Switzerland has said it will not accept use of the UK’s NHS Covid App as vaccination certification. From October 25 onwards, it will take only Swiss Covid certificates or an EU Digital Covid Certificate. Switzerland says non-EU or Swiss citizens can apply for a Swiss Covid-19 Certificate.

UK holiday firm Travel Chapter has said that it intends to list its shares via an IPO. The company says ‘we are delighted to announce our intention to IPO on AIM.’ It adds that its ‘booking platform, owner relationships, customer service and quality-focused property portfolio means we are well placed to continue to grow market share in a fragmented market, both organically and through selective acquisitions.’

FINANCE & MARKETS:

The ONS has reported that government borrowing fell in September compared with a year earlier. Borrowing was £21.8bn, the second highest September figure on record, but it was down £7bn on September 2020. Chancellor Rishi Sunak will present his Budget next week.

Sterling mixed at $1.3798 and €1,1866. Oil price lower at $84.16. UK 10yr gilt yield up 6bps at 1.21%. World markets mixed but heading better yesterday. London set to open up around 22pts as at 7am.

RETAIL WITH NICK BUBB:

• See premium. Reply to this email to upgrade.