Consumer squeeze, coffee, costs, tax, CO2, Wagamama & other:

A DAY IN THE LIFE:

We re-watched chunks of Father Ted over the weekend and, spurred on by the episode in which they take the mickey out of the film, Speed, we decided to watch the film itself.

And, though Keanu Reeves has clearly had a very successful career in the intervening couple of decades, we couldn’t help thinking that, if you’d put just one or two visuals in there and told me it was a parody, I’d have been tempted to believe you.

Because, bless him, he talks like Arnold Schwarzenegger on a bad day or maybe a cross between Elizabeth Holmes and Derek Zoolander showing off his Blue Steel, whilst simultaneously offing the bad guys and getting the girl.

Still, whatever works and, on that note, it’s good to see Hull City, long of new owners and a new manager, win their third league match on the trot on Saturday.

Onward and upwards, we say. Onwards and upwards to the news:

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PUBS & RESTAURANTS:

CGA’s latest Consumer Pulse research suggests that the increasing cost of living may start to dampen consumers’ enthusiasm for eating and drinking out. The research raises hopes for a steady recovery in sales in the On Premise over 2022, especially as one in five (19%) consumers intends to visit the sector more often this year.

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Data from Project Café UK 2022 shows 61% of UK consumers indicated they had downloaded a coffee shop app, with 36% purchasing a beverage to collect from a coffee shop over the last 12 months. A growing number of operators have invested in beverage delivery, including Costa Coffee, which in February 2021 partnered with Deliveroo to launch a trial at 500 of its UK stores.

Working from home:

Further moves to cut back on working from home as it looks as though a tax break given to those working from home is set to be scrapped by chancellor Rishi Sunak. The cost to the taxpayer is reported to have risen to around £500m.

The consumer, inflation & other cost increases:

Whilst the price of bread, butter and beer impacts the CPI, taxes going up does not but, to the consumer, the impact is similar in that it reduces the amount of discretionary income available to spend on non-essential goods & services. The ONS reports that the impact of inflation on low, middle & high income households in the run-up to Christmas was similar, despite different spending behaviour. The ONS has calculated the rate of inflation for high earners to be around 5.5%, somewhat above the general CPI at 5.4%.

The Sunday Times, meanwhile, sends slightly conflicting signals when it reports that ONS data suggests that a basket of ‘value’ groceries is up by 5.4% on the year (in line with inflation) whilst a basket of ‘standard’ products, which it says the middle classes would purchase, is up by 8.3%. A ‘premium’ basket costs only 3.1% more. Elsewhere, the paper points out that ASDA and Morrison’s – where some less-wealthy consumers may shop – have been jacking up prices much more rapidly than inflation.

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Tax increases.

Despite earlier reports that both the Chancellor and the PM were trying to distance themselves from the decision to raise national insurance costs for employees and employers in April, no10 comments on Friday that the tax hikes would go ahead have been confirmed in Sunday press reports. The Chancellor and the PM nonetheless maintain ‘we are tax cutting conservatives’.

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Wales:

The BBPA has responded to the lifting of restrictions in Wales saying that these had ‘decimated consumer confidence and in-turn our trade which is why we are delighted to see the back of these measures from today. It is hugely positive to see how comfortable the public now feel about returning to their local and office workers can do their bit by visiting their old pre-pandemic haunts.’

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Calorie labelling.

UK Hospitality has produced guidance on calorie labelling saying it is ‘intended to help affected businesses and to ensure consistent enforcement post-April and is therefore available to anyone in the sector, not just UKHospitality members.’

Supply.

Further concerns that CO2 supplies could dry up when the interim agreement to secure supplies expires. CO2 is used in fizzy drinks and to keep packaged food fresh. The government stepped in in October last year but the arrangement brokered ends today. The FDF has warned that the public could face supermarket shortages unless the agreement with CF Industries is not extended.

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Fever-Tree fell again on Friday to make a two day drop of 18%.

The Times reports that Asda has suspended its search for a chief executive as one of the two Issa brothers is now ‘heavily involved in the day-to-day running of the supermarket chain.’ It says that Mohsin Issa has been spending the bulk of his time at the grocer’s headquarters in Leeds.

COMPANY & OTHER NEWS:

Wagamama is set to fully open its London estate, with the final 5 that have remained closed scheduled to open over the next month.

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Dayalan Nayager, Managing Director of Diageo Great Britain, predicts a ‘Festive February’ as restrictions in the UK are eased. Nayager said ‘We…saw a slowdown through December with the Omicrom variant, but the expectation from the trade and ourselves is, you know, we are excited about it reopening and we think you will get back to a position similar to that prior to December’.

The Sunday Telegraph reports that SSP, which owns the Upper Crust and Ritazza brands as well as operating a host of others on a franchise basis in travel hubs, is likely to face opposition at its AGM to the idea that it should still pay significant bonuses whilst not repaying taxpayer-funded furlough cash to the government.

Diageo completed its acquisition of Casa UM, owner of premium artisanal mezcal brand, Mezcal Unión, on Friday.

Per MCA, Hostmore finds itself in a good position to snap up sites according to CEO Robert B Cook. Cook said ‘While it’s not great for the industry it could be a good opportunity for us in terms of either distressed single assets or even portfolios’.

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The MCA reported that Cook is optimistic about the future in that it has a solid brand in Fridays, a strong covenant and good balance sheet, but he believes there will be ‘a reset’ in the market again with rising costs and an end to government support looming.

The Sunday Times reports that Corbin & King is locked in a battle for control between its largest shareholder and its existing management. Sister paper The Times reports that billionaire Richard Caring is also considering a bid for the group.

M&B points out over the weekend that, as January payday has now passed, what is traditionally the least-good trading period of the year should be behind us. Valentine’s Day is upcoming and, whatever happens from tomorrow onwards, at least it won’t be January any more.

LEISURE TRAVEL & HOTELS:

Tui predicts that this weekend will see ‘the biggest booking day for travel since before the pandemic’, driven by the combination of the January pay day, and the recent government announcement of a relaxation of Covid restrictions. So far Tui’s top destinations are Majorca and Turkey.

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Sky News reports that Brookfield Property Partners, the Canadian property giant, is ‘paving the way to sell Center Parcs UK potentially as soon as this year.’ The financial owner is hoping to take advantage of the boost to business provided by the popularity of staycations during the pandemic. Sky mentions a figure of some £4bn.

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Eurocontrol reports that Europe’s air traffic is ‘on track to recover to 70%-90% of 2019 levels’ by the end of this year. Eurocontrol’s baseline case for air traffic recovery is for the industry to reach 2019 levels by 2024.

Newcastle International Airport announces hundreds of job vacancies, hosting a fair in January which saw the Airport and some of its largest business partners advertise over 500 job vacancies.

The 2022 State of the Cruise Industry Outlook report outlines how more than 75% of the ocean-going fleet capacity across Clia’s cruise line membership have now resumed operations. Clia expects nearly every vessel to be back operating by August this year and passenger volumes to surpass 2019 levels by the end of 2023 at the latest.

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OTHER LEISURE:

Disney+ is launching in 42 additional countries and 11 territories in Europe, the Middle East and Africa this summer. The streaming service is currently available in 64 countries, including the United States, Canada and the United Kingdom.

The Sunday Times Tax List reports that head of Bet365, Denise Coates, was Britain’s biggest taxpayer last year. The Coates family paid an estimated £481.7m, topping the annual ranking of billionaires’ tax payments for the third consecutive year. The total tax paid by the top 50 taxpayers rose by £510m to £3.7bn up from £3.2bn the previous year. 

A progress report from administrators shows that unsecured creditors to HMV got less than a penny in the pound after the failure of the music retail chain three years ago.

Data at the HMRC shows that the number of gyms in the UK rose by 10 per cent over the past year.

Police in Macau are reported to have arrested a director of gambling company Macau Legend Development, which runs three casinos in the city, in a crackdown on corruption. Shares in Macau Legend Development fell by around 30% in Hong Kong earlier today.

FINANCE & MARKETS:

The BBC reports on queues of lorries on the M20, saying that Brexit red tape is causing delays to trade and adding costs to businesses.

French GDP grew by 7% last year after an 8% contraction in 2020.

Sterling up at $1.3416 and €1.2015. Oil price higher at $91.14, UK 10dy gilt yield up 1bp at 1.24%. World markets heading better with London set to open up 44pts as at 7am.

RETAIL WITH NICK BUBB:

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