Xmas trading, 888, Hotel Choc., Caffe Nero, fuel costs & other:

A DAY IN THE LIFE:

It was pretty frosty round our neck of the woods yesterday and, though it’s true to say that, for a while to come ‘as the days lengthen, the cold will strengthen’, it is at least getting a little lighter in the mornings.

This knowledge can’t be put down to any chart pinned to the Langton office wall but is apparent rather because the number of times we trip over the dog in the dark when working from home seems to be past the hump and now on the way down.

Such trips being due to an array of human and canine characteristics and failings.

Both meanness in not putting the lights on in the morning and overoptimism in turning them off too early. And misplaced confidence in striding boldly through dog-strewn rooms allied with the beast’s hard-wired need to lie equidistant between all the people he knows are up and about (weighted by perceived importance or access to food) and his tendency to flop down in pinch-points such as doorways in order that he will come into maximum contact with said people, even if much of that is via being accidentally kicked, trodden on or tripped over.

Hence note to self. Get white dog and fluorescent collar with dangly bell. On to the news:

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PUBS & RESTAURANTS:

Capital & Counties interestingly yesterday announced that the valuation of Covent Garden edged up to £1.7bn. The co says ‘Covent Garden has had a strong second half of 2021 and despite the backdrop of the Omicron variant, consumers continued to be attracted to the West End’s most vibrant destination.’

Consumer confidence:

CGA reports that ‘consumer confidence about eating and drinking out remains high despite the spread of the Omicron variant.’

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Localism:

Pragma Consulting comments on ‘localism’ saying that it is the flip side, effectively, of working from home (WFH) and the resultant reduction in domestic travel.

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PM Boris Johnson, not seen in public recently, has been accused by some elements of the Press as having targeted the BBC in an attempt to distract from Partygate.

Christmas trading:

Foodservice analyst Peter Backman comments on Christmas trading saying that, whilst it is too early to be definitive, overall, he believes ‘sales were down -20% to -25% compared with December 2019. But some sectors were broadly unchanged – health care, and education for example. Others were very badly hit earlier in 2021 and they certainly didn’t improve in December – the leisure sector, feeding at work, and much of the hotel sector – were down perhaps -40% in the month.’

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Data from the Office for Health Improvement and Disparities shows a large increase in the numbers drinking at levels considered to be dangerous. Prof Julia Sinclair, the chair of the addictions faculty at the Royal College of Psychiatrists, said the switch to drinking at home during the Covid pandemic was partly to blame for the rise. 

The Joseph Rowntree Foundation has said that poorest families will be hit hardest when the Energy Price Cap rises in April.

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Morrison’s has confirmed it has cut sick pay for unvaccinated workers who obliged to isolate.

COMPANY & OTHER NEWS:

Hotel Chocolat has updated on trading for its Q2 (and H1) to 26 December saying that ‘total Group revenue for Q2 increased 37% compared to the prior year, and by 63% cent compared to the equivalent period in FY20.’ It says ‘total Group revenue for H1 has been strong, increasing 40% compared to the prior year, and by 56% compared to the equivalent period in the financial year ended 28 June 2020, the last equivalent period prior to the impact of Covid-19.’ It says it grew sales by 38% in the UK, by 126% in the US and by 131% in Japan.

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Caffe Nero founder Gerry Ford has said that a ‘black cloud’ has effectively been lifted from his company in that the Issa brothers will not now be able to take control of the business (via ownership of some of its debts).

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The Issa Bros, fresh from their purchases of Leon & ASDA and their tilt at Caffe Nero, are said to be interested in borrowing additional billions in order to buy Boots.

Gregg’s has opened its first drive-thru site in Wales. The unit, in Newport, will ‘provide our customers with all their usual Greggs favourites on-the-go and we are continuing to pursue other new drive-thru sites across Wales to support our shop estate’s growth plan in the coming years.’ Gregg’s says ‘the drive-thru model is quickly becoming part of Greggs’ estate and continuing expansion plan in Wales.’

The Daily Mail reports that Fever-Tree has overtaken Schweppes as America’s leading tonic water brand, taking American bars and supermarkets by storm, snapping up 26% of the market by last month, against Schweppes on 25%.

Amazon has reported that growth in its UK alcohol sales slowed to 11% growth during 2021. It had grown by 104% in H2 of 2020 (the first full half year of Covid). In addition, the online retailer is reported to be ‘in talks’ with Visa to reach an agreement after the e commerce giant planned to block UK Visa Credit cards from Wednesday. 

Fruit lager company JUBEL has raised £2.7m to support its growth with backers including Nigel Wray, ex-CEO of Domino’s Pizza Group Stephen Hemsley, CEO of Primary Health Properties Harry Hyman, as well as further backing from the No. 1 drinks distributor in the UK, C&C Group. 

Student work app Stint appoints Harry Lang as its first Chief Marketing Officer. 

Cook My Grub has launched its next funding round, seeking to raise £1.5m through a combination of VC, high net worth individuals, private, and angel investors. Cook My Grub’s platform allows home chefs to develop personal profiles before preparing healthy meals that are delivered to their locals’ doors.

Pernod Ricard has signed a deal to distribute posh Colombian rum brand La Hechicera in the UK.

The Telegraph reports that the Issa brothers are considering a bid for Boots, with the chain said to be worth as much as £10bn. Buyout giants Bain Capital and CVC Capital Partners also mulling a joint bid.

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LEISURE TRAVEL & HOTELS:

Travel Weekly’s Insight Annual Insight Report suggests that many travel businesses are likely to require fresh financial support to emerge from the pandemic. Businesses in the sector are said to fall within one of two camps, those which ‘weathered the storm reasonably well or raised funding such that they can weather the storm’ and those that ‘haven’t secured funding or need more’ or ‘need continuing support with existing lending’.

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European air navigation body Eurocontrol reports that European air traffic ‘recovered solidly’ by the end of last year and the growth ‘will not unwind’ in 2022. Air traffic in December remained at 78% of 2019’s level despite additional restrictions and hit 81% in the second half of the month.

Hotstats reports that many of the issues faced by the hotel industry last year will persist into 2022. Certainly staff shortages, rising costs and higher interest rates will continue to be a feature.

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South Western Railway, Avanti West Coast and East Midlands Railway are amongst the rail companies that have cut services from yesterday in response to large numbers of staff self-isolating.

London City airport CEO, Robert Sinclair, claims that the travel industry will recover rapidly from the impact of the Omicron variant, while predicting a ‘step change’ in demand for flying from this summer. Corporate travel returned to 35% to 40% of normal levels In the autumn, when passenger numbers hit their highest levels of the crisis, he said. 

TUI brand Marella Cruises has cancelled its three voyages that were set to sail from Majorca in March. Travel Weekly says the company has not given a specific reason for the cancellations.

OTHER LEISURE:

888 Holdings has updated on full year trading saying that 2021 was ‘another record year, with revenue growth of 14% driven by expansion in regulated markets.’ It says revenue rose by 14% to $972m with Q4 revenue down by 16% at $214m. The company says that the full year revenue growth was driven by the ‘continued success of the Group’s product-leadership strategy and continued expansion in regulated markets.’

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Netflix has increased the price of its subscription services in the US and Canada, with Basic costing $9.99, Standard $15.49 and Premium $19.99. This is up from $8.99, $13.99 and $17.99 respectively.

FINANCE & MARKETS:

City AM reports on research undertaken by IG Group that suggests UK exports to the EU could drop by another 8% or so by 2025. It says smaller EU countries are benefitting from Britain’s departure. The top three beneficiaries were Finland, Luxembourg, and Portugal.

China’s economy slowed in Q4 last year. The quarter showed annual growth of 8.1% but the quarter was only up by 4% on the same quarter a year earlier.

The Treasury said over £4.3bn of Covid help may be written off due to fraud.  

Sterling weaker at $1.363 and €1.196. Oil price higher at $87.83. UK 10yr gilt yield up 4bps at 1.18%. Markets better yesterday but Far East down & London set to open down around 14pts as at 7am.

RETAIL WITH NICK BUBB:

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