Britvic, service levels, inflation, demand, Crowdcube, confidence etc.:

A DAY IN THE LIFE:

Don’t you think it’s odd that good news rolls uphill?

I mean spending measures tend to get leaked by no10 ahead of a Budget and tax measures are left to no11 to announce on the day of the Budget itself.

And this isn’t a particularly new phenomenon and is almost certainly as old as civilisation itself.

indeed, though John F Kennedy popularised the proverb ‘success has many fathers, failure is an orphan’, it’s thought to be a 100+ years old and was first attributed to Count Ciano who, apparently, was Mussolini’s son in law. On to the news:

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PUBS & RESTAURANTS:

Service levels:

KAM Media has produced research for point One that ‘reveals customer experience, particularly in QSR, is being damaged by the current crisis.’ That is, labour shortages are leading to reduced service levels. This mirrors feedback from the US industry. KAM says ‘in their survey of 500 QSR customers and 100 frontline staff, nearly 2-in-3 customers had noticed venues they have visited being short-staffed over the last 3 months and 1-in-5 said they’d waited longer to be seated and served than normal.’

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Supply issues:

Stats from Adzuna, which the ONS publishes weekly in its Real Time Indicators, suggest that job vacancies in the “transport, logistics & warehouse” category are still the highest relative to pre-pandemic levels across the whole of the economy. This suggests that, all other things being equal, there is still a supply problem across the UK as a whole but, as always, different levels of severity seem to be being felt across different sectors and even between different firms.

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Inflation:

To a hammer, everything’s a nail. Confirmatory bias kicks in but, that said, there is plenty of inflation around. AO World yesterday said ‘shipping costs, material input prices and consumer price inflation remain challenging uncertainties’. It blames inflation, at least partially, for weak sales saying ‘as a result of these factors, the all-important current peak trading period is significantly softer than we anticipated only eight weeks ago.’

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Former Governor of the Bank of England Mervyn King has said that central bankers have been caught unawares by this round of rising prices. Given the amounts of money that have been injected into world economies, that is hard to believe. King says that some governors are acting like King Canute in denying the obvious. He says ‘a satisfactory theory of inflation cannot take the form ‘inflation will remain low because we say it will.’

The consumer:

Demand hasn’t been a problem thus far in the recovery but, with tax rises looming and inflation eating away at disposable income, this may come under some pressure. Energy company Bulb is reportedly the 23rd energy supplier to go bust in recent weeks. Consumers will be moved to other suppliers where they will be faced with paying market rates for their energy rather than the low rates that Bulb promised, and which it ultimately was unable to deliver without going out of business.

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Business confidence:

The latest ICAEW Business Confidence Monitor ‘shows that business confidence has weakened, though it is still very high, as businesses are facing growing challenges with skills availability, staff turnover, input costs, and transport problems. Sales expectations for businesses are still strong, but not at the levels of the previous quarter.’

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Labour supply:

The Resolution Foundation says that mass unemployment has been avoided post the end of furlough but it says there has been a sharp increase in the number of people voluntarily withdrawing themselves from the workplace via the Great Retirement. It adds ‘we need to bank the benefits of more flexible working patterns in post-pandemic Britain, and avoid the risk of remote workers being turned into second-class staff, as we have done with so many part-time workers.’

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UKH Scotland says that the Scottish Government has listened to the hospitality industry on the damage that a vaccine passport extension would have caused. It says ‘the First Minister’s announcement that Covid vaccine passports will not be extended comes as welcome relief to hospitality businesses.’

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Data from Lumina Intelligence’s Eating & Drinking Out Panel shows that eating out penetration increased by 1 percentage point to 54%, while eating out frequency grew 8% to 1.5 times per week during October, driven by schools being on half term.

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BRITVIC FULL YEAR NUMBERS:

Britvic plc has reported Preliminary Results for the year to 30 Sept 2021 saying that it is ‘emerging stronger, [and is] confident in future growth prospects.’ The company says constant currency revenue rose by 6.6% to £1.4bn in the year and adjusted EBIT rose 19% to £176.5m (reported +6.5%) with margin up 40bps to 12.6% and profit after tax up 9.1% to £103.2m. Adjusted EPS is 44.3p, up 2.5%. This is ‘impacted by a one-off deferred tax charge of £11.2m’, says the group. The full year dividend is up 12.0%, ‘reflecting the board’s confidence in our prospects and strong balance sheet.’

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COMPANY & OTHER NEWS:

The MA reports that the RedCat Pub Company has acquired an additional 6 sites taking the company’s portfolio to about 83 sites. The business has acquired The Manor House Hotel in West Bexington, the King William IV in Sedgeford, Norfolk; the Green Man in Stanford, Bedfordshire; the Green Man in Fownhope, Herefordshire; the Royal Wells Hotel in Tunbridge Wells and the Conningbrook Hotel in Ashford.

Crowd funding platform Crowdcube has announced that it has raised £10m to support its global expansion. Crowdcube attempted to merge with Seedrs but terms imposed by the competition authorities meant that it did not progress with the deal and it was dropped in March of this year. This £10m investment round was led by Circle Internet Financial, which owns US fundraising platform SeedInvest.

Crowdcube sayas ‘the strategic partnership will help pave the way to a global marketplace at every level of private fundraising, from seed stage to public offering.’

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Stricter Covid regulations in Northern Ireland have heightened fears that Christmas trading could be damaged across the hospitality industry.

Impossible Foods is raising $500m in new funding. It has raised almost $2 billion since it was founded in 2011. The company says the cash will be used to ‘further accelerate our product innovation and global expansion efforts.’

The BBC has reported that continental-style Christmas markets that have become popular across the UK will be ‘smaller and less European this year.’ The one in York opened last Saturday and it was absolutely mobbed.

In the US, tech platform Qualtrics has found that as many as 28% of those not-vaccinated would lie in order to eat in a restaurant if vaccination was mandatory. Some 70% of U.S. adults are now fully vaccinated.

The BBPA has welcomed the Government’s decision to streamline the Market Rent Only (MRO) process, saying ‘During the pandemic leased & tenanted pubs received £285 million in reduced or cancelled rent and further additional support worth on average £27,000 per pub from pub-owning businesses.’

Big Hospitality reports SpiceBox, the vegan curry house, has launched a new crowdfunding campaign on Seedres, aiming to raise £350,021 in return for 7.57% equity, giving a pre-money valuation of £4.3m.

Mosaic Pub & Dining has opened The Larkshall in Chingford with James Watson CEO saying ‘this one has taken a lot longer than expected to get open, however we believe the end result has been worth the wait’.

Albert Schloss is set to open in Birmingham next month at One Chamberlain Square on Monday, 6th December. The 500 cover venue will take over 13,000 sq ft and feature as part of the £700m Paradise development.

Hawkin’s Bazaar and Stocking Fillers have been acquired by Menkind for an undisclosed sum. The retailer said customers will now be able to choose from a larger range as well as a more seamless customer experience.

Korean convenience stores are seeing a huge boost in sales of packaged craft beer after years of dominance from imported beers. 

LEISURE TRAVEL & HOTELS:

Commercial real estate agent Avison Young has commented on the recovery of the UK hotel sector from the impact of Covid-19 saying that ‘the sector, particularly in tourist hotspots has bounced back strongly in Q3 with, many markets average daily rate (ADR) performance higher than the corresponding period of 2019.’ It adds that ‘this has led to a higher degree of optimism in the sector than since pre-Covid, and a more bullish approach to vendor aspirations on pricing.’

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Per Travel Weekly, Travel Counsellors reports sales over the last 28 days up 127% compared to 2019, driven by the removal of the government’s amber list, the red list reducing to zero and the reopening of US borders. It reports that leisure sales in the week commencing November 8 up 135% on the same week two years ago and corporate bookings were 87% up on 2019.

EasyJet will recruit 1,500 seasonal cabin crew members to fly next summer, to serve the ‘predicted ramp-up in demand’. The airline is also taking on 150 newly qualified cadet pilots in the UK who had originally been due to join the airline at the beginning of the pandemic.

Loganair CEO Jonathan Hinkles told the Airlines 2021 conference that UK business travel will not return to its pre-Covid-19 level and the domestic aviation market will be smaller overall as a result. However,  easyJet chief commercial officer Sophie Dekkers told the conference ‘We launched 19 UK domestic routes since 2019 and our proportion of business traffic was higher during Covid than pre-Covid.’

Broadwick Soho hotel will open in late 2022, set to feature 57 rooms, a Sicilian inspired restaurant and terrace, rooftop lounge, intimate dining room and speakeasy bar.

The Australian federal government will allow skilled workers and certain temporary visa holders to enter the country from 1 December without the need to apply for an exemption. Visitors under these categories must provide proof of their vaccination status as well as a negative result from a Covid-19 PCR test taken within three days of departure. 

FINANCE & MARKETS:

Markit yesterday released flash PMI numbers for the UK economy saying that the ‘UK private sector firms experienced another month of rapid input cost inflation.’ It says ‘the latest increase in average cost burdens was the fastest since this index began in January 1998, driven by higher wages and a spike in prices paid for fuel, energy and raw materials.’

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The flash Composite number for the Eurozone was 55.8 versus 54.2 in October.

The HMRC has reported that the number of homes sold in the UK fell by more than half last month after tax breaks expired. Savills has reported that Stamp Duty cuts injected £6.4bn into the economy that would otherwise have gone to reduce government debt.

Sterling weaker at $1.3376 and €1.1895. Oil price higher at $82.66. UK 10yr gilt yield up 7bps at 1.00%. World markets mixed yesterday and London set to open up by around 14 points as at 6.45am.

RETAIL WITH NICK BUBB:

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