Langton Capital – 2021-11-02 – Pub trading, WFH, labour, the consumer, holiday intentions, Flutter etc.:
Pub trading, WFH, labour, the consumer, holiday intentions, Flutter etc.:A DAY IN THE LIFE: For some reason, it feels quieter out there today and yesterday than it did a couple of weeks ago when we were last down in the Smoke. Perhaps, given that it’s a sample size of a pub visit, a trip to the supermarket, two or three walks to the Tube and a walk around King’s Cross, not too much should be read into that but, if nothing else, it might just be a reminder that footfall’s recovery from Covid might be a jagged (but upward) line rather than a straight one. However, more pubs seemed to be opening on a Monday. Rather brave but there were people in though, at £12.70 for two beers, the prices are a rather eye-watering. Re mask usage, it seems to have slipped a little again. Maybe 15-20% on the train down and 40-50% on the Tubes. Nobody in the pub and maybe a third to a half in the supermarket. Which is what it is and we get it because, like nearly everyone else, we crave ‘normality’. Wishing it so doesn’t make it so but maybe ignore the buzzkill as we spent an hour on a stationary train yesterday and it still wasn’t light when we got in this morning and that doesn’t do much to lighten the mood. 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: Trading: S4 Labour has reported that October was ‘a strong month for hospitality sales’. It says ‘following a strong September for hospitality, October’s monthly like-for-likes are up 13.5% when compared to October 2019’ and adds ‘in particular, food-led sales performed well with a 17.8% increase in like-for-likes. Drink sales were also up by 9%—much higher than September’s drink like-for-likes.’ Below, food vs drink & London vs provinces. • See premium. Reply to this email to upgrade. Working from home: Foodservice analyst Peter Backman asks whether the return to the office is strongly underway and whether hybrid working has really arrived. Mr Backman maintains that ‘customer “traffic” in London…is much lower (compared with pre-covid levels) than in the rest of Great Britain.’ He adds ‘in fact, since the reopening in July 2020 just before the start of Eat Out to Help Out, the purple line shows London has been running at about half the levels seen in the rest of the country (where the picture is very similar in all regions).’ He goes on to consider passenger journey numbers on London’s buses, tubes, the DLR and London Overground and says that this ‘shows that journeys into, and around, London have been growing faster than visits to restaurants (and quick service outlets and pubs).’ • See premium. Reply to this email to upgrade. The Morning Advertiser asks whether the hospitality industry could now be the ‘sickly child of high street.’ • See premium. Reply to this email to upgrade. Research from CGA suggests ‘cautious optimism for strong December trading’ with younger consumers in particular willing to commit to out-of-home Christmas celebrations. Some 69% of 18-34yr olds intend to visit on-premise licensed outlets at least as often as they did over Christmas 2019. Older demographics appear to be somewhat more cautious. CGA says ‘after a Christmas washout in 2020, consumers are eager to get back to the kind of festive experiences that only the on premise can provide. However, venues will have to juggle some people’s desire to celebrate with more cautious consumers’ anxieties about safety — all while addressing major challenges around staffing and supply. Venues that pull this off can look forward to a positive end to a very challenging year.’ Labour: The Morning Advertiser reports that the hospitality industry’s ‘staff shortage crisis’, caused by ‘an exodus of international workers and experienced staff leaving the industry during the Covid-19 pandemic’, is driving an increased use of technology. Mobile ordering and payment apps reduce staff interaction. The consumer: The OBR has said that households will not repair their finances until 2023. Charlie Bean, an OBR committee member, told MPs the main reason was “a very low rate of productivity growth”. He says ‘we do have a modest pickup in productivity growth. But it’s not back up to anything like the pre-epidemic rates.’ The OBR has also said it could be a struggle for chancellor Rishi Sunak to both cut debt and balance the budget within three years. Sky points out that diesel costs have hit all time highs in the UK at 147.94p per litre. The RAC says ‘while this isn’t unexpected, as petrol has already hit a new record price, it’s still another body blow to drivers and businesses across the country who were already struggling to cope with rising prices.’ The MPC will announce Thursday whether interest rates will rise this month. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Growthdeck reports that the sum of money lent by UK pub and bar owners to their own businesses in order to keep going amounts to around £138 million in the last year. Single site operators may have found it hard to access CBILs and BBLs. Growthdeck, says ‘many owners have had to use their own money to stay in business as traditional funding options have been restricted.’ • See premium. Reply to this email to upgrade. The Night Time Industries Association is calling on the Home Office to carry out a full inquiry into ‘Drink Spiking” in order to asses ‘the breadth of the issue and consider the key characteristics of these crimes from historical reporting and evidence. This will include who is being targeted, the settings that these crimes take place within, aswell as toxicology details to collectively stamp spiking out.’ • See premium. Reply to this email to upgrade. Vaccine mandates (in the US). In the US, the New York Restaurant Association has surveyed members and found that over 90% have encountered ‘customer-facing problems’ in enforcing the city’s vaccine mandate. Problems range from customers walking out to staff members refusing to be vaccinated and, in some cases, having to be placed on leave. The Pub Governing Body has released its 5th annual audit report which, it says, was ‘conducted in what has been an unprecedented eighteen months due to the Covid 19 pandemic.’ The body’s Board reports it ‘is pleased to see that the data in the fifth annual report once again shows there is a high level of compliance with both codes in England & Wales.’ It adds that it ‘would also like to commend the companies governed by the Code for the help they have given to their tenants during the Covid pandemic.’ The EU has dropped its tariffs on US whiskey. The UK currently has retained tariffs. Keurig Dr Pepper has reported a 7.6% rise in net sales to $3.25 billion for its Q3. The company says ‘in the quarter, we continued to effectively manage through macro challenges to deliver strong and balanced results.’ It adds ‘our outlook for the business remains strong, as we look forward to our next chapter of transformation and growth.’ Coca Cola is to take full control of sports drink brand BodyArmor for $5.6 billion in a deal that values the brand at $8 billion per the Wall St Journal. Amazon has announced that it owns 20% of Rivian, the electric vehicle maker that has recently filed for an IPO. LEISURE TRAVEL & HOTELS: WTM London calculates that around 21% of Brits defied orders to stay home to take a foreign holiday in the last 12mths. • See premium. Reply to this email to upgrade. WTM has also said that the traffic light system was blamed by 66% of Brits polled as the main reason they did not take an overseas holiday in the past year. WTM says ‘the traffic light system was intended as a simplified version of 2020’s travel corridor system – but in reality, turned out to be just as complicated, perhaps more so.’ It adds ‘airlines, operators and destinations were constantly dismayed at the lack of countries on the green list and had to act quickly when countries moved up or down the traffic light grades, often at short notice.’ WTM reports that 70% of Britons wish to take a holiday in 2022 with a half of respondents to its recent poll saying they would like to take two or more holidays next year. WTM says ‘the trade has been reporting widespread pent-up demand for travel throughout the pandemic and this has been shown by rising booking rates whenever restrictions are eased.’ It cautions that ‘the uncertainty and confusion about travel rules has deterred many would-be holidaymakers until now.’ Thailand has reopened to fully-vaccinated foreign tourists. Holiday home platform Plum Guide has raised £1.5m on Crowdcube. Shanghai Disneyland has been temporarily closed after the discovery of one single Covid case at the resort. Some 34,000 visitors have been tested. OTHER LEISURE: Flutter has updated on Q3 trading saying that its ‘strong underlying growth continues.’ It has nonetheless cut its EBITDA guidance for the full year. The company says its online revenue grew by 13% with the UK & Ireland down 5%. The company says that, for the full year, the group’s businesses outside the US have seen ‘unfavourable sports results in first 24 days of October [that] have impacted EBITDA by circa £60m. Combined with expected £10m EBITDA impact in Q4 from temporary Netherlands exit, Adjusted EBITDA expectations for 2021 now expected to be £1.24bn to £1.28bn (previous guidance: £1.27bn – £1.37bn).’ • See premium. Reply to this email to upgrade. Gaming Realms has announced that it has received approval of a full iGaming Supplier Licence in Michigan. CEO Michael Buckley says ‘Gaming Realms is on track to deliver another excellent year of growth. Looking ahead, we have a strong pipeline of new licensing agreements and with the approval of a full iGaming Supplier Licence in Michigan we have further cemented our position in the US market. With our application process underway for Ontario we continue to look forward with confidence.’ FINANCE & MARKETS: Markit has reported that households seem to be preparing for higher interest rates. It reports that ‘households’ expectations of imminent Bank of England rate rise jumps to eight-year survey high. Markit says ‘interest rate expectations are heating up, with households clearly buying into the Bank of England governor’s recent rhetoric that higher borrowing costs are imminent. With markets also starting to price in a rate hike at next week’s monetary policy meeting, the data show that policymakers have paved the way for rates to rise if the Monetary Policy Committee sees fit.’ Markit yesterday released its PMI for UK manufacturing saying that, whilst still in growth, ‘the manufacturing upturn slowed further at the start of the fourth quarter, as output growth was constrained by rising supply chain disruption, staff shortages and declining intakes of new export work.’ The PMI rose from 57.1 in September to 57.8 in October. It says ‘UK manufacturers maintained an optimistic outlook during October, with almost 62% expecting their level of output to increase over the coming year. That said, the overall degree of positive sentiment dipped to an eight-month low.’ The FT reports that ‘lenders have begun to increase borrowing costs in anticipation of tighter monetary policy over the next year.’ Sterling mixed at $1.3655 and €1.1605. Oil higher at $84.96. UK 10yr gilt yield up 2bps at 1.07%. World markets better yesterday but Far East lower in Tuesday trade & London set to open down around 17pts as at 7.15am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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