Hostmore, Nightcap, February Tracker, inflation & costs, consumer etc.:

A DAY IN THE LIFE:

Road-testing another couple of pubs in central York over the weekend, we were a) pleased to be paying around £4 a pint but b) less pleased to find that we couldn’t get away from this Wheels vs Doors controversy, as the bar staff were talking about it and we found it hard to get served as a result.

We’d been introduced to the debate, which apparently originated on Tik Tok, by a junior Langton who said that the argument as to whether there were more wheels or doors in the world, had brought her school to a standstill, had nearly led to blows (allegedly between teachers) and had threatened various childhood friendships that had existed since kindergarten.

Which side was I on, I was asked.

Tricky. No upside here but ‘wheels’, I said.

But what about all the cupboards, was the response.

‘Doors’, I then said.

‘Are you sure?’

‘Yes, doors.’

But what about wheeled chairs, shopping trolleys, toy cars and the like asked my daughter who, I was told, was very much #teamwheels?

So ‘wheels’, I said. Anything for a quiet life. Follow us on Twitter at #brumbymark for intraday comment. On to the news:

LANGTON EMAIL:

The Free Email is now written in short form. Extended versions of many 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 format.

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

CGA SALES TRACKER, FEBRUARY:

The latest CGA sales tracker finds that managed groups’ like-for-like sales were up by 3% in February compared with February 2019. This is better than January, when the number was minus 1% and December, when it was minus 11%. The comparator period is now a long time ago and, with inflation running at its current levels, this represents a decrease in like-for-like sales in real terms, even taking account of the lower rate of VAT.

• See premium. Reply to this email to upgrade.

PUBS & RESTAURANTS:

Consumer squeeze – food prices.

The FT says ‘consumers around the world will feel the “enormous impact” of Russia’s war on Ukraine through sharply higher food prices and significant disruption to agricultural supply chains, according to industry executives and leading European officials.’ This has the potential to reduce the amount of disposable income (income after essentials) available to consumers.

• See premium. Reply to this email to upgrade.

Chancellor Rishi Sunak, who is shortly to put up taxes, has said that he could take some limited action to help mitigate the cost of living crisis in this month’s spring statement. There are no details but he is under pressure from his backbenchers to help consumers.

Sir Charlie Bean, who worked until recently at the Office for Budget Responsibility, has told the BBC that it would not be a major problem to delay next month’s planned increase in National Insurance contributions.

The labour market:

CGA looks at ‘the Great Resignation’ saying that ‘the COVID-19 pandemic has prompted many people to reassess their career ambitions.’ It says the hospitality industry has found that material numbers of staff members have either left the country or have decided to ‘seek alternative careers during the enforced closures of the sector over the past two years.’

• See premium. Reply to this email to upgrade.

The rugby:

The BBPA estimates that UK pubs could sell 24.5 million pints over the weekend, with the Six Nations drawing crowds. This volume of sales would provide the sector with £100 million and give HMRC a windfall of £28 million from beer duty and VAT.

Data from CGA shows that total sales of 9 litre cases of vodka were down 29.9% in January 2022 when compared with two years ago. However, in the three months to January 2022, total sales of vodka were up 19.2%, increasing from £457.6m to £545.6m. Sales of flavoured vodka during the same quarter saw even more success, increasing from £28.8m to £37.7m (30.9%). 

COMPANY NEWS:

Company results.

Hostmore plc, which operates that Fridays and 63rd & 1st chains of bar restaurants in the UK, has reported 53-week numbers to 2 January 2022 saying that it has seen ‘positive trading performance with strong free cash flow generation.’ It says its balance sheet in now ‘well positioned to capitalise on opportunities ahead.’ The company reports revenues for the year of £159m (vs £129.1m in the prior year) with a loss after tax of £0.6m (prior year loss £17.3m). The adjusted EBITDA was e£21.5m against £1.5m in the prior year.

• See premium. Reply to this email to upgrade.

Nightcap plc has reported H1 numbers to 26 December 2021 saying that it has turned in strong results and says it continues to execute its strategy. The company reports revenues of £15.8m against £2.0m in the prior year with adjusted EBITDA of £2.5m (£0.6m in 2020). The co says it has made a loss before tax of £0.5m (2020 loss £0.3m) equating to a loss per share of 0.39p (2020 loss 0.46p). The company says its ‘bars continue to trade strongly, with like for like revenue growth of 24.8% for the nine weeks ended 27 February 2022 when compared to the same period in 2020 and 24.6% when compared to the same period in 2019.’

• See premium. Reply to this email to upgrade.

Russia sanctions:

Burger King will suspend all of its corporate support for the Russian market, including operations, marketing and its supply chain. It will also be refusing approvals for investment and expansion in the country, it said. Tesco has taken Russian vodka off its shelves. The Co-op did this last week, followed by Morrison’s & ASDA. The Telegraph reports that ‘Jamie Oliver is scrambling to shut his Jamie’s Italian restaurant in Russia.’

Other news:

Diageo has been fined £1.2 million by the Scottish Environment Protection Agency (SEPA) after an ‘administrative error’ prevented the company from operating under the correct emissions permit. Diageo had failed to accurately declare carbon emissions in three of its whisky plants in Scotland, breaching the UK’s rules.

REKOM UK, the UK division of Europe’s largest nightclub and late-night bar owner and operator, is bringing ‘Heidi’s Bier Bar’ to the UK. The brand is focused on aprés ski and the first site will open in Cardiff on Friday 11th March, followed by a further opening in Birmingham in Spring this year.

Wasabi is planning to expand into suburban areas in order to adapt to changing lifestyles. The company also said the Wasabi UK delivery business has significantly expanded as well bringing more products into its UK grocery business. 

Oat-based ‘milk’ supplier Oatly last week reported revenues for the year to end-December up by 52.6% to $643.4m. Q4 revenues were up by 46.3%. The company reported a pre-tax loss for the year of $215m compared to $58m in the prior year.

Flight Club has opened a unit in Cheltenham.

LEISURE TRAVEL & HOTELS:

Fuel surcharges on air fares ‘can’t be far off’ according to industry analysts. Loganair became the first UK carrier to confirm a fuel surcharge would apply to all new bookings from Thursday, adding £3.95 to a one-way fare.

The Polish Tourism Organisation has told UK holidaymakers that it continues to welcome all visitors and remains a safe destination. The PTO said ‘Poland is inviting overseas travellers to continue supporting the vital tourism industry which helps support the economy.’

The US is to require airline passengers to wear face masks until April.

Manchester Airports Group (which has Stansted and East Midlands airports in addition to its Manchester hub), reports that it managed 2.4 million passengers in February, some 62% of the number seen in February 2019. This is its busiest month since the beginning of the pandemic.

Tui Airways no longer requires passengers to wear face masks on flights to and from England and Northern Ireland. However, Tui Airways said ‘Under current guidance, it is still mandatory for customers aged 12 and above travelling on Tui Airways to/from Wales and Scotland to wear a mask throughout their flight unless medically exempt.’

Tui has cancelled a deal allowing the Russian oligarch Alexei Mordashov to use its name. Tui Russia – which will now have to rebrand – was first established as a JV in 2009, but Tui sold its stake at the end of March 2021 to KN-Holdings LLC.

Heathrow reports overall passenger numbers remained nearly 50% down on pre-pandemic levels in February, with 2.8 million passengers travelling through the airport (15% down on forecasts). Based on the strength of outbound leisure bookings being reported by airlines, peak days in the summer holidays could be very busy, at up to 85% of pre-pandemic levels, it said.

OTHER LEISURE:

Disney has suspended its Russian operations, including content and product licensing, Disney Cruise Line activities, National Geographic magazine and tours, local content productions and its live television channels. The company said ‘Given the unrelenting assault on Ukraine and the escalating humanitarian crisis, we are taking steps to pause all other businesses in Russia’.

Amazon’s $8.5bn acquisition of MGM Studios is set to be approved by the EU, giving the company access to its blockbuster catalogue including James Bond movies. The deal is scheduled to be decided by March 15 by the EU.

FINANCE & MARKETS:

The Bank of England has undertaken a survey to ascertain individuals’ inflationary expectations. It finds that the median estimate as to where inflation was currently was 5.0% with the median answer for the coming year at 4.3%, up from 3.2% in November 2021. This may not be as dramatically changed as could have been feared.

The Bank of England says 16% of respondents believed interest rates would remain unchanged over the next twelve months, compared with 21% in November 2021. Some 65% of respondents expected rates to rise over the next 12 months, up from 60% in November 2021.

The Chancellor of the Exchequer said Friday that ‘Russia’s invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the UK.’

The BCC notes that ‘UK goods exports to the EU fell by £3bn (20%) in January 2022 compared with the previous month according to the ONS data.’

Sterling mixed at $1.3014 and €1.1925. Oil price more or less unchanged over the weekend at $109.90. UK 10yr gilt yield down 2bps. The Bank of England meets on Thursday. World markets broadly higher on Friday and in the Far East today. London set to open up around 37pts as at 7am.

RETAIL WITH NICK BUBB:

• See premium. Reply to this email to upgrade.