Langton Capital – 2022-02-08 – Consumer spending, TUI, VAT, WFH, Just Eat, Brasserie Bar Co etc.:
Consumer spending, TUI, VAT, WFH, Just Eat, Brasserie Bar Co etc.:A DAY IN THE LIFE: I’m not much of a bird-watcher but, as a couple of bird feeders hang outside our office window, I can’t really help but watch the little blighters as they flit around. And, after a bit of head-scratching, I reckon I can name a couple of dozen birds. Fair enough, that doesn’t necessarily mean I’ve seen them. The list may or may not include chickens, emus, ostriches, vultures and dodos. The last I’m not likely to see outside a museum, either but, whether or not the list of two dozen that I’ve claimed to name includes or doesn’t include the above-mentioned birds, we’ll have to wait for Sue Gray to decide. Nonetheless, in the meantime, I’ve been somewhat heartened by the fact that our ancestors weren’t necessarily much better at it than I am. Dunnock, for example, means ‘small brown thing’ and even I know it’s a bird rather than a mammal. Anyway, on to the news: LANGTON EMAIL: The Free Email is now written in short form. Full stories are in the Premium Email. Reply to this email if you would like to upgrade. See Twitter for in-day comment. Let us know if you would like an example of the Premium Email or to comment on the new Mrmat. Prices for the Premium, unchanged for 2yrs, are £295 for one subscription, £495 for multiple, both plus VAT. Reply to this email to order & request invoice. Or sign up for easy in, easy out monthly option HERE PUBS & RESTAURANTS: VAT: UK Hospitality has organised some 250 hospitality companies to write to the chancellor to call on him to hold VAT at its current 12.5% rate for food and non-alcoholic drinks sold by hospitality outlets. UKH says the letter calls ‘on the Treasury to maintain the current level to enable many fragile businesses to continue their recovery, to protect jobs, and to help stave off higher inflation in the economy.’ UKH CEO Kate Nicholls says ‘there are many compelling reasons why VAT should be held at the current rate given the current circumstances. However, this is about so much more than an extension to temporary measures in the face of the challenges brought by Covid; it’s about working to establish the right tax level for our world-class hospitality and tourism industries. It is vital, in the interests of competitiveness, job creation, growth and ensuring hospitality and tourism play their full part in driving the economic recovery.’ • See premium. Reply to this email to upgrade. Consumer spending: The latest Barclaycard Consumer Spending report (for January) shows that UK consumer spending growth slowed as we moved into 2022 on the back of rising living costs and continuing coronavirus restrictions. Barclaycard reports that consumer card spending rose 7.4 per cent in January compared with the same period in 2020, before the first coronavirus restrictions. The number is inflated by the move away from cash towards plastic that has continued in the years since 2020. This is the smallest uplift since April 2021. • See premium. Reply to this email to upgrade. Foodservice analyst Peter Backman comments on inflation when he says that ‘the sector has, for quite a while, once more been grappling with rising costs – food, energy, labour. The forecast is that each of these costs will be getting more pronounced. But probably more importantly, customers, now with less money in their pockets, will be making spending decisions that may not be good for eating out operators.’ • See premium. Reply to this email to upgrade. Working from home: The mobility stats that we looked at yesterday do tell a story of a steady drift back to work. Whilst office attendance may be a short 30% down outside London and a short 40% down in the capital itself, the numbers are inching in the right direction. Whether or not they will get back to 100% any time soon remains to be seen. Lawyer Clifford Chance is reported by The Telegraph to be ‘mulling plans to slash the size of its global headquarters in Canary Wharf by as much as two thirds as partners reject Boris Johnson’s pleas for workers to go back to the office.’ This probably isn’t what the government (or TfL or Pret or a whole host of other operators or, indeed, landlords) would like to hear. • See premium. Reply to this email to upgrade. Current trading: S4labour reports that January sales across the hospitality sector have been up 1% on 2020 levels. Food-led sales were up 3%, however drink-driven sales were down by a small 1%. Sites outside of London saw their like-for-likes increase by 2%, whereas London-based sites saw their sales decline by 4%. • See premium. Reply to this email to upgrade. Prices & inflation: Lord Bilimoria, founder of Cobra, has said the company’s beer prices will have to rise because of a ‘vicious cycle’ of cost pressures. This follows warnings from Tesco’s chairman, who warned that the worst on price rises is yet to come. • See premium. Reply to this email to upgrade. COMPANY & OTHER NEWS: Just Eat Takeaway has announced this morning that it is to delist from Nasdaq and adds that this should ‘reduce complexity and costs.’ • See premium. Reply to this email to upgrade. The Times reports that PE house Alchemy Partners is to buy Brasserie Bar Co in a deal estimated to be worth around £40m. The Times reports Raymond Blanc, who is 72, is ‘understood to have crystallised the minority stake he held under Soho Square (formerly Core Capital), although he is retaining an interest and will remain involved with the business after the deal.’ US Dept of Labour data shows that the foodservice sector added 108,000 jobs last month, more than any other sector. It says that the unemployment rate in the leisure and hospitality industry, despite the need for more labour, is 8.2%, roughly double that in the wider economy. Also in the US, Papa Johns International has said that it will be cutting back on hours and some other services due to a shortage of labour. The MCA reports that the Boston Tea Party, an all-day dining casual café, plans to open three more sites this year bringing the total number in its estate to 27. CEO Sam Roberts said the company is opening its 25th restaurant next week in Torquay, as well as a cafe in the Milton Keynes shopping centre in June/July. The business is looking at sites in Cardiff, Bournemouth, Winchester and Oxford. Big Hospitality reports that Tomahawk is in talks to secure new funding to speed up its expansion. The 14-strong group operates in locations including Teesside, Newcastle, London, Darlington and York. Tomahawk says it has been courted by numerous private equity firms and is looking for funding to acquire any smaller steakhouse groups that are coming to market. The MA reports that Inn Collection Group has completed its first acquisition of 2022 with the purchase of the Glenridding Hotel in Ullswater, the Lake District. The acquisition takes the group’s Lake District portfolio to 9 sites and its overall estate to 28. The MCA reports that RedCat Pub Company has acquired The Crown Hotel in Boroughbridge, Yorkshire. The pub will be operated by The Coaching Inn Group and will bring RedCat’s room estate to 1,000 rooms. Student work app Stint has partnered with PizzaExpress to offer work spaces for students in ⅓ of its restaurants throughout the UK. LEISURE TRAVEL & HOTELS: TUI Q1 numbers: TUI has reported Q1 numbers saying that group revenue was €2.4bn, up €1.9bn on the prior year ‘reflecting the more open travel environment enabled by the successful roll-out of vaccinations during calendar year 2021. Around 40% of this increase in revenue was driven by Markets & Airlines Central Region, with our Continental European markets benefitting from the earlier easing of travel restrictions by the EU, resulting in a higher level of confidence in short-term departures.’ • See premium. Reply to this email to upgrade. The ONS has reported that the number of people travelling abroad last summer was down by 76% on pre-pandemic levels in 2019 to 6.1 million. It says that overseas spending by UK residents fell by 78% to £4.9 billion and says that business visits were down more significantly than those for leisure purposes. Inbound trips into the UK by air fell by 86% to just 1.3 million last summer. London, along with a number of tourist hotspots, has felt the impact more than suburban UK as a whole. Cove UK’s acquisition of 8 parks from Argyll Holidays has given it an immediate footprint in Scotland. Keith Campbell, director of Argyll Holidays, said ‘Cove is the ideal custodian of Argyll Holidays, sharing as we do, the same missions and values and commitment to the preservation and investment in the destinations we own.’ Luxury cruise liner Cunard reports a ‘phenomenal response’ since its summer 2023 programme went on general sale on February 2. Angus Struthers, VP of sales and marketing, said booking levels had surpassed Cunard’s record-breaking 2021. • See premium. Reply to this email to upgrade. Australia will reopen its borders to double-vaccinated international travellers from February 21. Travellers will have to provide proof of vaccination, with prime minister Scott Morrison saying ‘That’s the rule. Everyone is expected to abide by it’. FINANCE & MARKETS: The Halifax has said that house prices rose in January but it says that growth will slow “considerably” further into the year as households feel the impact of the current consumer squeeze. The Halifax said that house prices rose by 0.3% in January, still positive but the lowest monthly increase since June 2021. The annual rate of house price inflation stuck at 9.7% in the 12mths to January. Sterling mixed at $1.3514 and €1.1835. Oil price lower at $92.71. UK 10yr gilt yield up 1bp at 1.42%. World markets mixed yesterday with London set to open up around 23pts as at 7.15am. RETAIL WITH NICK BUBB: • See premium. Reply to this email to upgrade. |
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