Christmas lost, services, GfK, delivery & takeaway, travel restrictions etc.:

A DAY IN THE LIFE:

So, we’ve made it through to Friday on what should have been the busiest week of the year for socialising and getting together.

But there wasn’t much of that.

At least not yet because Langton didn’t get to our global HQ in EC2 as we’ve had a confirmed Covid outbreak in our flat and a) it didn’t seem overly sensible to flirt with the chance of being handed a ten day slap-down so near to Christmas and b) I was too mean to pony up for a hotel room in the Travelodge 50yds from my own bedroom window.

Indeed, were I to get an isolation order, the others would be out there like a shot and be back on the train up north leaving me on my lonesome, facing an isolated Christmas of close confinement.

I’d be eating scraps from the fridge, shouting out the window at traffic wardens to buy me a bottle of milk and hoovering the carpet for something to do on the Big Day itself.

And even to me that didn’t sound too appealing so, instead of currying it up in E1 we’re here instead. But it’s not all bad. It’s Friday, the weekend is upon us and LNER have refunded my rail tickets. On to the news:

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PUBS & RESTAURANTS:

Dealing with a lost Christmas:

Some parts of the country may feel it more acutely than others but, for virtually all operators, this won’t be the Christmas that they had hoped for. The marginal few percent on revenues is what can make or break a year and, with sales down by 60% plus in some areas, it may this time be more the latter than the former. Spending may be postponed or diverted. Here a few comments:

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The British Institute of Innkeeping has released the results of its Christmas Trading survey saying that ‘the country’s move to Plan B in England and the announcement of further measures for the devolved nations has had an immediate and devastating impact on the level of trade in our nations’ pubs with cancellations of bookings and a drop in footfall across the whole of the UK, at a time where operators needed to be building resilience back into their businesses ahead of the quieter winter months.’ It says some 500 licensee operators fed back and says that ‘78% of respondents reported trade as already being significantly down on 2019 levels with two thirds reporting that Christmas bookings have been cancelled and half seeing a reduction in size of bookings.’

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Meanwhile the BBPA says ‘pubs will sell 37 million fewer pints and lose £297m this Christmas, but the Government isn’t giving them support.’ It says it ‘expects cancellations to increase after the Government advised people to avoid events or plans in the days ahead of Christmas in the Prime Minister’s press conference on Omicron on December 15th’ and adds that its ‘members are already seeing a dramatic drop in footfall in their venues.’ It says that ‘although no new restrictions have been announced the message to the British public to avoid socialising is just as damaging for pubs.’

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Big Hospitality reports that cancellations and staff absences caused by the surging Omicron variant are forcing many restaurants to close early for Christmas. It says ‘London restaurants have been particularly badly hit by the drop in consumer confidence caused by the Government’s introduction of Plan B measures and officials – including chief medical officer for England Chris Whitty – advising people to cut back on socialising during what is traditionally one of the busiest times of year for hospitality.’ The Times says that, for hospitality, this is a lockdown in all but name.

Meanwhile Young & Co CEO, Patrick Dardis, has suggested that thousands of hospitality firms across the UK could go bust by January because of a “fear campaign” and a lack of financial support.

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Wireless Social’s latest footfall data has shown that the ‘Plan B’ announcement has had a significant impact on consumer confidence, resulting in a drop off in hospitality sector footfall. It says there has been a dramatic drop in footfall adding ‘Wi-Fi log-ins across Wireless Social’s network across the UK dropped significantly this week – the data shows the hospitality venue visits were down by 35% on Monday 13th December, 34% on Tuesday 14th and 31% on Wednesday 15th in comparison to the same period in 2019.’ It adds ‘this pattern is even clearer in London, where log-ins were down by 43% on Monday 13th December, 44% on Tuesday 15th and 45% on Wednesday 15th, compared to the same period in 2019.’

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Lockdown by stealth:

This has been alleged by JDW’s Tim Martin and others and, with Professor Chris Whitty and others calling for people to cut back on socialising, the cap might fit. The Treasury, at this stage however, has not indicated that it is ready, willing or able to do much to help. The Resolution Foundation thinktank has said the government should introduce a targeted furlough scheme. It says hospitality and leisure firms will lose customers and some may be forced to close in the absence of timely help.

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Services sector still in (much slower) growth:

The Markit flash PMIs for December point to slower growth. Markit says December was the ‘worst month for the UK economy since February as private sector output growth eased considerably in response to tighter pandemic restrictions and renewed business uncertainty.’ It says ‘the slowdown was centred on the service sector, which more than offset a modest acceleration in manufacturing production at the end of 2021.’ It says there was a ‘slump in confidence among consumer-facing service providers.’ The composite measure was 53.2 in December, down from 57.6 in November. Services were also 53.2, down from 58.5 in November.

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Consumer confidence:

The latest GfK Consumer Confidence Survey for the UK shows that confidence has slipped in the run up to Christmas. Client Strategy Director Joe Staton says ‘news about the Omicron variant could not have arrived at a worse time for festive celebrations. As thoughts began turning to Christmas and the New Year, Omicron jumped out of nowhere and threatened to bring Santa’s sleigh crashing to a halt.’ GfK says ‘while the holiday season has not yet been hijacked, December’s headline score has slipped one point to minus 15 and the lack of Yuletide cheer is evident.’

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Delivery & takeaway:

The latest CGA & Slerp Hospitality at Home Tracker shows that hospitality groups’ delivery and takeaway sales continue to grow ‘with a 97% increase in sales by value in November, compared with November 2019 – with delivery sales up a massive 192%.’ The survey says ‘the growth in home delivery and takeaway is expected to continue as anxiety about the Omicron variant mounts and people switch from eating out to ordering food in.’

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COMPANY & OTHER NEWS:

Cancellations:

Greene King CEO Nick Mackenzie said ‘in parts of London, we have seen like for like sales vs 2019 down 50 to 70% since the working from home message was delivered.’

Calls for more government assistance:

The Night-Time Industries Associations (NTIA) demands the Chancellor to ‘come out of hiding’ following the introduction of new restrictions on the industry.

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Only A Pavement Away, a charity helping those experiencing homelessness, is running its third annual Winter Warmth campaign – distributing warm apparel throughout the winter months, to homeless individuals across the UK.

McDonald’s has reportedly settled a lawsuit in which its former CEO, Steve Easterbook, has agreed to return equity awards and cash worth over $105m. McDonald’s claimed that Mr Easterbrook lied about sexual relationships with members of staff. The $105m had been handed over in a severance package in 2019.

Black Box in the US has reported that November was an exceptionally good month for restaurants. It says sales were up by 8.3% on the same month in 2019. Traffic growth (footfall) was up 1.6% on October but it was still down 4.7% on November 2019. Increased spend per head made up the difference.

LEISURE TRAVEL & HOTELS:

France will bar travel to and from Britain for those without ‘compelling reasons’ from Saturday morning. Abta has called the ban a ‘hammer blow’ with CEO Mark Tanzer saying ‘Any government review of business support to address the impacts of Omicron must include as a priority travel agents and tour operators.’ Implications for ski season, cancellations, ABTA etc.

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Mintel reports that consumers were already becoming more cautious about booking holidays before the Omicron variant emerged, with only 24% of UK adults were planning to book an overseas or domestic holiday by the end of March in mid-November.

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Health secretary Sajid Javid confirmed that travellers in quarantine hotels in England could leave on Wednesday afternoon, as long as they have tested negative for Covid, and that guests will be refunded for the days they have not used. 

Research from Cushman & Wakefield suggests that the London hotel market will not fully recover until 2024, whereas hotels outside of London are anticipated to recover by 2023. All of the UK’s top hotel markets were seen as more attractive than 12 months ago, with London continuing to top the list of markets that hotel operators are most interested in.

Long-haul holiday provider Uni-Travel Ltd has ceased trading as of 15 December. 

STR reports that U.S. hotel performance improved in the week to 11 December compared with the prior week. Occupancy was 57.4% (down 4.8% on 2019) and room rates were $128.35 (up 2.3% on 2019). The resultant REVPAR, at $73.73, was down by 2.7% on the same week in 2019.

Among the Top 25 Markets, Norfolk/Virginia Beach saw the only occupancy increase over 2019 (+4.2% to 55.2%).

The CAA has said that Heathrow can raise its take-off and landing charges by 56% for its airline customers. From the New Year, it will be able to charge £30.19 per customer, up from the current £19.35.

OTHER LEISURE:

Bruce Springsteen has sold the master recordings and publishing rights for his life’s work to Sony for a reported $500m (£376m).

Energy Fitness Professionals Ltd has been acquired by UK and Ireland healthcare service provider Totally PLC for £1.3m. 

FINANCE & MARKETS:

The Bank of England’s Monetary Policy Committee yesterday voted 8-1 to raise interest rates from 0.1% to 0.25% in the face of surging inflation. The gesture (interest rates are currently, even after the rise, only a twentieth of the rate of inflation) is the first time that rates have risen in around three years. Governor Andrew Bailey, who said for some time that inflationary pressures were transitory, said ‘we’re seeing more persistent inflation pressures… so that’s why we have to act.’ He added ‘we’re concerned about inflation in the medium term.’

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Turkey has cut its interest rates (albeit to a still-high level) despite rising inflation and a currency crisis. The Turkish central bank cut rates from 15% to 14%.

Sterling up at $1.3336 and €1.175. Oil price lower at $74.40. UK 10yr gilt yield up 1bp at 0.75%.World markets better early yesterday but US lower & Far East down in Friday trade. London set to open down around 22pts as at 7am. 

The UK has signed a free trade deal with Australia.

RETAIL WITH NICK BUBB:

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