Shepherd Neame, Barclaycard data, rent arrears, labour, franchising etc.:

A DAY IN THE LIFE:

Travelling back up north last Friday, I got to King’s Cross & realised I hadn’t downloaded the ticket to my phone.

It was in my Inbox. But I was on mobile data by then and my system only allows access to my last 20 emails.

The tickets were older than that but, not to worry.

I whipped out my laptop, found the email and photographed the QR code. This got me through the ticket barriers and onto the train.

The ticket inspector, however, somewhere between Peterborough and Grantham, had other ideas. He had a sniff of the 5% kickback he would get if he bagged a fare dodger and said the photo could have come from anywhere.

Well, actually, it couldn’t.

Furthermore, it’s a QR code that hadn’t been used yet. And, after he’d checked it, it couldn’t be used again and it was for the seat I was sitting in.

That went down badly. But heels were dug in by this time and he insisted on seeing the original email.

The one I could have forwarded to tens of thousands of people, I asked.

Yes, he said, that’s the one and, as there was Wi-fi on the train, it was easy enough to find it and show him but I’m not sure that was ten minutes well spent for either of us.

Anyway, on to the news:

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BARCLAYCARD CONSUMER SPENDING REPORT:

Barclaycard has reported on consumer spending in October saying that it grew by 14.2%. The card servicer said that ‘spending on essential items saw a smaller uplift than September, as fuel spend returned to modest growth after last month’s surge’ and adds ‘cinemas and digital content & subscriptions had strong growth, boosted by titles such as ‘No Time To Die’, ‘Squid Game’ and ‘Succession’.’ It adds that ‘international travel recorded its strongest post pandemic performance, as restrictions continued to lift’ and says that ‘clothing and pubs, bars & clubs fared less well than last month, as concerns around rising household bills led Brits to cut back on nice-to-haves.’

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PUBS & RESTAURANTS:

Rent arrears, landlord relationships etc.:

Legislation introduced back in June extended the ban on evictions of commercial tenants who had been forced to close during that Covid lockdowns until 25 March next year. However, The Telegraph reports that government proposals could mean that ‘struggling retailers risk being forced to stay in rental properties after their initial lease has expired.’

The paper says ‘occupiers who cannot agree a payment plan with their landlord could be ordered to remain a tenant for longer than initially agreed under the new arbitration code, which is being drawn up in a bid to avoid legal disputes after thousands of retailers withheld payments during Covid’. The Department for Levelling Up is to require all landlords and tenants involved in a Covid dispute to go into arbitration to ease pressure on the courts, says The Telegraph.

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Consumers:

There may be a wall of savings out there but not all of it is now being spent on ‘useful’ things like meals out, holidays and other hospitality products and services. A survey undertaken by insurer Aviva suggests that one in 10 consumers now regret buying items ranging from hot tubs to DIY tools to exercise bikes during the pandemic. Puppies and even ‘new houses that could be difficult to commute from’ might also fit into this category.

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Labour issues.

Pub company Stonegate Group reports that it is ‘on the hunt for talent’ and has announced that it is prepared to offer free pizzas in order to get its offer in front of people. The company announces it is holding a Recruitment Day at The Alice in Houndsditch London, tomorrow, Wednesday 10 November 2021. It says ‘searching for new talent to join its Town and City division, Stonegate is hosting a recruitment and networking day to find new people to join its pub, bar and venues teams in central and town locations.’

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Access to capital:

Over-enthusiastic PE houses arguably poured too much capital into the hospitality industry, particularly into branded restaurants, in the run up to 2018 and we saw a rash of CVAs partly as a result. Foodservice analyst Peter Backman says this has led to a number of issues, one of which is that fledgling and growing businesses may find it harder to attract money from PE houses on the principle of ‘once bitten, twice shy’.

This reticence may also make it harder for existing investors to flip their holdings. Mr Backman says that ‘becoming publicly quoted is one [potential exit] route (provided the business is large enough). Burger King UK has expressed interest in an IPO and Hostmore (owner of Fridays – formerly TGI Fridays) launched on the FTSE on 2 November.’ But Mr Backman says ‘there is only a handful of companies of sufficient scale to do this, and for some, such as Giggling Squid, BrewDog, and Hawksmoor, the time is “not now”.’

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Supply issues.

The Morning Advertiser and Drinks Business both carry a number of stories from operators suggesting that supply chain issues are here to stay for the foreseeable future. DB says ‘Brexit and global freight issues have tripled costs and will lead to wine price hikes’. It says drinks stock shortages could continue.

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SHEPHERD NEAME FULL YEAR NUMBERS:

Shepherd Neame has reported full year numbers for the 52 weeks ended 26 June 2021 saying that demand has been strong since reopening and adding that cash flow is good and net debt is reducing. It says that ‘Supply Chain challenges and inflation costs will persist into 2022’ and adds ‘to put the year’s results in context, our pubs had been closed for 296 of the previous 421 days when they were allowed to reopen indoors on 17 May 2021.’

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COMPANY & OTHER NEWS:

Fuller, Smith and Turner has partnered with Brian Turner CBE as ambassador of its Sunday Roasts across its Managed Pubs and Hotels.

Sticky Fingers Street Food in Cardiff is to launch a legal challenge against the Welsh Government following the proposed expansion of the NHS Covid Pass system to more hospitality venues.

According to a report in The Mirror, some 4.5 million bottles of wine are set to be delivered to supermarkets by trains as supermarkets look to mitigate shortages brought about by a lack of lorry drivers in the UK.

An Opinium survey for Tesco has found that 19% of 18 to 34-year-olds would replace the traditional Christmas lunch or dinner with a festive brunch this year.

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The OIV predicts that world wine production in 2021 is set to fall by 4% compared to last year, with conditions having “severely impacted” production in Italy, Spain and France.

TripAdvisor identified 3.6% of review submissions last year as fake, with the majority being rejected before they were posted. The report found 20,299 members were banned, 34,605 properties were penalised for fraudulent activity. 

Zetland Capital and Portobello Brewery have announced that they are to partner to acquire an initial London pub portfolio with a medium term growth target of building a business with over 80 pubs. Portobello Starboard is the acquisition platform. It is ‘delighted to announce the acquisition of 12 high quality freehold pubs, located across the London villages and suburbs.’ The joint announcement says ‘the pubs have been acquired from various entities, backed by funds managed by investment manager Downing LLP.’

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LEISURE TRAVEL & HOTELS:

The Post Office Holiday Money Index of 2021 shows that euro sales in September and October rose by 150% year-on-year, while sales of US dollars increased by 142%. The increase has been driven by travellers planning winter-sun and Stateside trips as borders open up.

Mazars reports that insolvencies of UK travel agents and tour operators rose 17% in the last year, from 59 to 69. Mazars says many smaller travel firms have used up their cash reserves during lockdown.

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Mollie’s hotel and diner has appointed Fleurets to support ambitious plans to expand to 100 sites over the next ten years. A further ten locations have already been earmarked as part of the immediate expansion plan.

Amadeus reports its first quarterly profit since the start of the pandemic, with adjusted profit of €23.8m for the three months to 30 September. In the same period last year, the Spanish company reported an adjusted loss of €125m.

Sabre reported revenue up 58% year-on-year to $441 million but a net loss of $241 million in Q3. The continued recovery from the pandemic saw global bookings through the system, net of cancellations, totalling 54 million in the quarter, a 62% decline on the same period in 2019.

The Gresham Aparthotel in Leicester opened on 3 November. The £17m by developer, Aimrok Holdings, has seen this building transformed from a department store into a high-end, 121-room aparthotel. 

Texas-based hotel ERIT CorePoint Lodging it to be purchased by a joint venture between affiliates of Highgate and Cerberus Capital Management for $1.5 billion in cash per HNN.

OTHER LEISURE:

Tesla shares fell after a majority of Twitter users polled by Elon Musk voted for him to sell 10% of his stock. The shares Musk plans to offload are worth roughly $20bn.

FINANCE & MARKETS:

The UK’s trade deal with the EU is said to be under threat per Irish Foreign Minister Simon Coveney. He says that the Trade and Cooperation Agreement in response it contingent on the Northern Ireland Protocol being implemented.

Governor of the Bank of England Andrew Bailey is now insisting that the Bank of England will raise interest rates if expectations of higher inflation drive up wages. He says it will do this if inflation becomes ‘generalised’ across the economy. Bailey has been criticised for being an unreliable boyfriend, for being indecisive and for having misdirected financial markets in the recent past. He previously said that Bank would “have to act” if there were inflation risks but then failed to do so.

Sterling a touch higher at $1.3577 and €1.1792. Oil price up at $83.54. Oil price higher at $83.54. UK 10yr gilt yield up 1bp at 0.85%. World markets broadly better yesterday but Far East mixed in Tuesday trading and London set to open around 19pts lower as at 7am.

RETAIL WITH NICK BUBB:

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