Whitbread, Just Eat, Nichols, Hostelworld, the consumer & other:

A DAY IN THE LIFE:

Wandering around a near-deserted City of London yesterday in the drizzle, it was hard not to feel at least a little bit sorry for the pigeons.

Yes, filthy, verminous, flying rats they may be but they’re used to 5x or 6x as many people as they have now and hence, one would assume, to many more dropped sandwiches, spilled chips, sprinkled bread crumbs and the like.

And, when you’re hungry, that kind of drop in volume must hurt.

They could, of course, decide to do what rock doves did before people built artificial rock faces in the sky. They could kind of work for a living but, as that’s like telling humans to cure global warming by doing what humans did before the invention of fire, clothing and shelter, it’s a pretty big ask and it might not get many takers.

Not in the short term, at least and, though the number of pigeons getting squashed in traffic must be well down, the ‘excess-deaths’, to quote a current phrase, for said birds is likely to have been much higher in 2020 and 2021 than it was pre-Covid.

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WHITBREAD Q3 TRADING UPDATE:

Whitbread has updated on Q3 trading and our comments thereon are set out below.

Headline numbers:

• Whitbread has updated on Q3 trading (13wks to 25 November) saying that it has seen a ‘strong revenue performance in Q3 and continued outperformance in the UK.’

• The company says that it has generated ‘continued market outperformance in the UK with Premier Inn total accommodation sales 10.6% ahead of FY20 and like-for-like UK accommodation sales 5.5% ahead.’

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PUBS & RESTAURANTS:

Covid restrictions in Scotland:

First minister Nicola Sturgeon has announced that some Covid restrictions – for example those on large outdoor events – will be lifted from Monday, but others will remain. Ms Sturgeon announced that the Covid passport scheme will remain in place in most cases where it already applies. She says the need to wear face coverings in indoor public places and to work from home if possible “will remain in place for now”. Trade bodies have responded with disappointment and requests for more financial state aid. UKH Scotland has said that hospitality’s hopes have been ‘torpedoed as Scottish businesses continue to pay a heavy price for unevidenced policy of restrictions.’

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Trading conditions:

S4 Labour says that ‘the first full week of 2022 saw hospitality sales fall by 30% compared to the same week in 2020.’ London remains more acutely impacted than the UK’s regions.

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Staff availability.

A number of observers have picked up on numbers from recruitment company Robert Walters, which has recorded profits sharply higher as a result of The Great Resignation and the need for many different sectors to recruit. The company said ‘we are seeing candidate shortages across all locations and disciplines, a fierce competition for talent and wage inflation kicking in which together create huge opportunities across the recruitment market.’

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The consumer:

The Telegraph reports that borrowers re-mortgaging via fixed-rate deals are ‘beginning to feel the squeeze.’ Given that interest rates edged up marginally last month, this is perhaps to be expected. Nonetheless, it means that more cash will need to be spent on ‘essentials’ and there will be less left over to spend on hospitality services and products.

A study of UK households’ finances by Scottish Widows has found that they have suffered a major fall in their financial wellbeing as a result of rising prices. The survey shows that the well-being index fell to 40.1 in Q4 last year, down from 44.0 in Q3. Cash availability was at its lowest in 8yrs.

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Discounting

Not yet a definitive ‘thing’ but there is a bit of it about.

The BBPA has launched a new website called BrewingGreen.org which will highlight the sustainability initiatives and innovations in the hospitality sector.

Morning Consult reports that just under half of all ‘Dry January’ participants do not plan to fully abstain from alcohol over the course of the month. The research also found that 91% of participants said they were doing it for health benefits.

There’s a lot of ‘striving for normality’ going on. No PCR tests if asymptomatic, 10-7-5 day isolation, calls to ‘live with it’ etc. Stopped clock principle suggests that, at some point, it will be right.

COMPANY & OTHER NEWS:

Just Eat Takeaway.com has updated on trading saying that it ‘grew 33% to 1.1 billion orders in 2021, worth €28.2 billion while rapidly improving profitability.’ It says ‘following the merger of Just Eat and Takeaway.com nearly two years ago, we made significant investments to grow our leadership positions and the Company is now six times bigger in terms of orders. On the back of this success, we have markedly improved our adjusted EBITDA throughout the second half of 2021, and we will make further improvements this year. Meanwhile, we expect our market positions to strengthen further, driven by our superior network effects.’

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Nichols plc has updated on full year trading saying ‘the Vimto brand has continued to deliver a strong performance. In the UK, Vimto brand value has increased by 5.6% YTD, according to Nielsen as at 4 December 2021. In the International route to market the brand continued to see progress year-on-year, with strong double digit revenue growth versus the prior year.’

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El Pollo Loco in the US has said that staffing shortages took perhaps 5-6 percentage-points out of its Q4 sales. It says fourth quarter same-store sales rose 11.1%, including a 6.2% increase at company-owned units and a 14.4% increase at franchised units.

Temper, the steakhouse and barbecue restaurant, plans to open a fourth site in London, located on Great Eastern Street in Shoreditch and set to open in the summer.

Five Guys plans to open its first 24hr site. The restaurant will be located in Manchester’s Picadilly Gardens.

Chipotle plans to open its first site outside of London in Watford, located on the highstreet opposite the atria Watford shopping centre.

Shake Shack yesterday updated on its Q4 trading saying that it recorded ‘total revenue of $203.3 million in 4Q21 and $739.9 million in FY21.

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The Daily Mail reports that Jamie Oliver is set to recoup £1.75m from the collapsed Jamie’s Italian despite the company owing £83m when it went bust in 2018. The Daily Mail reports that suppliers will have to share £600k that has been set aside for claims. The Times wades in saying that Mr Oliver’s creditors did poorly. It says ‘hard-pressed councils are likely to lose more than £1.3 million from the collapse of Jamie Oliver’s restaurant chain as administrators come close to winding up the stricken business.’ It says ‘19 councils, will see more than 90 per cent of the cash they are owed wiped out. Jamie’s Italian owed local authorities £1.44 million in unpaid business rates and taxes when it collapsed in 2019. This is in addition to the £1.25 million that it owed to the taxman in unpaid VAT.’

LEISURE TRAVEL & HOTELS:

Hostelworld has updated saying that ‘while 2021 has continued to be a challenging year for Hostelworld and the global travel industry, we are pleased to report that the Group recorded a consistent recovery in bookings and revenue versus 2019 levels throughout the year, save for the latter part of the year which was impacted by the emergence of the Omicron variant.’

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A research paper from Trip Advisor and Ipsos Mori reports on how consumers’ travel plans have changed compared with the pre-pandemic situation. It says ‘despite new variants of COVID-19, consumers across the globe still want to travel and explore. This is evident in our month-over-month search data which shows a consistent, healthy increase in page views post-Christmas.’ Planned travel in 2022 actually exceeds actual travel in 2019.

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HVS comments on the UK hotel markets saying that ‘the past 18 months has been an unprecedented time for hotels. In order to survive businesses must embrace change across their entire operation and do so quickly,’

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Colliers predicts that staycations will continue to boom in 2022 as holidaymakers remain wary of travelling abroad due to Omicron and the possibility of future variants.

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Tenerife has introduced new Covid restrictions as case numbers rise on the island. Pubs and restaurants have to shut down at midnight and public transport capacity is capped at 75% of pre-pandemic levels. The measures will be reviewed on January 24.

Heathrow airport warns that aviation faces a ‘long-haul recovery’. The airport saw just 19.4 million passengers in 2021, less than one quarter of 2019 levels. The airport also revealed that Omicron led to the cancellation of 600,000 flights in December.

Heathrow boss John Holland-Kaye said ‘There are currently travel restrictions, such as testing, on all Heathrow routes – the aviation industry will only fully recover when these are all lifted and there is no risk that they will be re-imposed at short notice, a situation which is likely to be years away.’

Ferry operator DFDS has warned that there could be long queues at Dover unless Covid border checks are not eased by Easter.

OTHER LEISURE:

Take-Two Interactive is set to acquire Zynga, the maker of FarmVille, for $12.7bn. Zynga was once the most popular developer of Facebook games but has since pivoted to mobile gaming.

FINANCE & MARKETS:

The World Bank has warned that the aftershocks of the Covid-19 pandemic will weigh on global economic growth for many years. It now forecasts growth of 4.1% this year, down from 5.5% in 2021.

Glenigan has produced its UK Construction Industry Forecast for 2022-2023 and says it paints ‘a positive picture for construction over the next two years.’ It says ‘despite disruptions, the sector’s rebound is still on track with the value of underlying project starts set to rise 7% in 2022 and by a further 5% in 2023.’

Sterling mixed at $1.3641 and €1.1992. Oil price higher at $83.64. UK 10yr gilt yield down 2bps at 1.17%. World markets higher yesterday and London set to open up around 47pts as at 7am.

RETAIL WITH NICK BUBB:

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