Brighton Pier, MARS, SBUX, consumer, inflation, Ted Baker & other:

A DAY IN THE LIFE:

Langton managed to cut its grass at the weekend and, as what we laughingly call our lawn is surrounded by what seems like acres of fierce brambles, thistles and climbing roses to all sides that have apparently been growing vigorously all winter, we have the cuts and scratches to prove it.

However, in a variation of the ‘lorry drivers’ suntan’ (i.e. right forearm only), we’ve only got them on one side as if you cut the grass in concentric circles towards the middle, you only get nettled, stung and scratched to one side so here’s a question for you: If you were going to cut the grass in ever diminishing circles, would you go clockwise or anti-clockwise?

Anyway, I’d thought we’d started the above lawn-cutting treadmill early but, on checking the garden diary – once an accountant, always an accountant – we found that, April last year’s frosts notwithstanding, we’d actually started cutting it one day earlier last year. On to the news:

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FURTHER RESPONSE TO THE SPRING STATEMENT:

The Spring Statement impacts the hospitality industry specifically but also the consumer more generally.

The Hospitality Industry.

Disappointment seems to be one of the themes running through reactions towards the Spring Statement. Whether or not the trade was being realistic in hoping for (maybe even expecting) a maintenance of VAT at 12.5%, it didn’t get it and the government will take a bigger (actually, much bigger) slice of revenues going through hospitality tills from this Friday.

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The Consumer:

The consumer can hardly be unaware that tough times will shortly be upon us. There may be confusion as to why NIC is going up and Income Tax is coming down, but there will be little uncertainty as to what is happening to pay packets and the cost of essentials such as food, fuel and energy.

Opinion pollster Opinium says that 68% of voters think the government should be doing more to help them deal with rises in the cost of living. The Chancellor has said he can’t help everyone. Opinium says his personal approval rating has dropped to 35%, a new low.

PUBS & RESTAURANTS:

Costs & Prices:

Lynx Purchasing reports that the Russian invasion of Ukraine will have an ongoing impact on hospitality food prices. Lynx Purchasing managing director Rachel Dobson said ‘There is now further pressure on hospitality and catering operators, who were already seeing unprecedented levels of food and drink inflation, driven by a combination of spikes in commodity prices, increased transportation and import costs, and higher labour costs.’

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Separately, Adnams has warned that the ‘rocketing barley costs could push up prices [of beer] by as much as 30pc.’ The Telegraph reports the brewer as saying ‘when it comes to that next supply, that’s when we will start to see price increases.

Trade:

KAM Media’s latest report, Return of the Pub 2022, covers snacking in pubs saying that only ‘43% of those we spoke to as part of this project said that the current range was “OK”, whilst 57% said that it needed improving.’

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The ONS reported on Friday that UK retail sales fell by 0.3% in February as online sales fell and stormy weather deterred some shoppers. Online sales volumes fell by 4.8% over the month.

The consumer:

Education Secretary Nadhim Zahawi has suggested that the chancellor, Rishi Sunak, has further capacity to help consumers with their cost of living crisis. he did not give Sky TV any details. The Sunday Times suggested that the chancellor was considering proposals for a new council tax rebate in the autumn.

The EY Item Club has suggested that households will be £500 a year worse off in terms of their disposable income later this year. It goes on to suggest that poorest consumers could face a rise in living costs of around 10 per cent, compared with an average of 8.6 per cent across all consumers.

COMPANY NEWS:

The Brighton Pier Group has reported H1 numbers saying that it has turned in a ‘very strong first half trading performance’ with ‘revenues up by 178% to £22.8 million on the same 2020 period and importantly up 33% on the same pre-covid period in 2019.’ The company says ‘this has been driven by the sound underlying performance in all divisions as well as the successful integration of Lightwater Valley which is trading above expectations. A consistent gross margin performance, the reduction in VAT and rates relief has enabled the Group to make good progress on maximising earnings and paying down debt.’ PBT was £6.6m vs £2.7m in the prior year.

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Marston’s is reported that be putting up its wages by around 7.7% for its hourly paid staff, somewhat ahead of the NLW increase of 6.6%.

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Starbucks has said it plans to open 140 new coffee shops in the UK this year . It currently has over 1,000 outlets in Britain.

Globally, Starbucks aims to operate 55,000 stores in more than 100 markets around the world by 2030. Currently it operates more than 34,000 stores in 80 countries. Starbucks also said it would be increasing wages across its US business, where it is facing a growing union movement, by an average of 17% over 18 months, with starting ranges of $15-$23 per hour by summer 2022.

Planet Partnership, the JV between Beyond Meat and PepsiCo, has released its debut product made with plant-based protein – meatless jerky. The ‘beef’ jerky is marinated and slow-roasted and contains plant-based ingredients such as peas and mung beans, as well as 10g of protein, no cholesterol, GMOs, soy or gluten.

The Times reports that grocery app Gorillas is ‘on the hunt for $500 million of new funding that could value it at more than $5 billion (£4 billion) as the Covid-fuelled boom in rapid delivery continues to guzzle billions in investor cash.’

Sky News reports that Sycamore Partners has ‘tabled a £250m offer (130p per share) for the London-listed fashion chain Ted Baker.’ The co has this morning confirmed that it received two, unsolicited bids from Sycamore, the first at 130p and the second at 137.5p. It says that both bids have been rejected.

• Ted Baker says ‘the Board of Ted Baker carefully reviewed both of Sycamore’s proposals with its advisers and concluded they significantly undervalued Ted Baker and failed to compensate shareholders for the significant upside that can be delivered by Ted Baker as a listed company. Ted Baker is a leading global brand with a strong future. The management actions taken over the last two years have put the business on a firm footing and it is now well on the way to recovery following a turbulent period. The Board is focused on delivering value for Ted Baker’s shareholders well in excess of the price offered by Sycamore.’

• The Sunday Times, whose story has been somewhat overtaken by events, says it ‘was unclear this weekend whether it had been formally rejected, although City sources indicated that it was extremely unlikely to be endorsed by the retailer’s board.’ Sky outlines the situation when it says if this is rejected ‘Sycamore will face the dilemma of raising its bid before a mid-April deadline set by the UK’s Takeover Panel or walking away.’

Luckin Coffee reports that revenues grew 97.5% to reach RMB 7.8bn ($1.2bn) in the full-year to 31 December 2021. The coffee chain opened net 1,211 stores over the period to reach 6,024 stores, comprising 4,397 company operated and 1,627 licensed locations. The technology-led coffee chain also recorded a significantly reduced operational loss of RMB 539m ($85m) for the year compared to RMB 2.6bn ($406m) in 2020.

Stonegate Group won the ‘Best Employer of the Year’ category in the British Credit Control Awards on 24 March.

HOLIDAYS & LEISURE TRAVEL:

Jet2.com CEO Steve Heapy has said that holiday prices are likely to go up for summer 2023. Given what’s happening to fuel and other costs, this may not come as a shock.

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Hays Travel Independence Group says it has registered a strong growth in membership over the last 18 months.

Gatwick reopened its South Terminal on Sunday after almost two years of closure.

Thomas Cook UK saw ‘vigorous growth momentum’ last year despite the Covid-19 pandemic and strict travel curbs in Europe. The UK arm of Thomas Cook recorded turnover of approximately RMB 383 million (£45 million), according to Hong Kong-based Fosun Tourism’s annual results.

Research from over-50s travel specialist Silver Travel Advisor shows that almost three quarters of older people plan to take a holiday in the next six months and a similar proportion expect to take more than one trip this year. The study also found that 39% intend to spend more on holidays this year.

Roadchef announces a partnership with Coco di Mama, to bring the restaurant’s premium innovative pasta offering to motorway users. The first site is to be located at Roadchef’s flagship Norton Canes service area on the M6 Toll.

Grant Shapps has called for the boss of P&O Ferries to resign after he sacked 800 staff without notice. Shapps is also reported set to hold ‘crisis talks’ with P&O Ferries’ rival operators this week in order to ensure there is no shortage of capacity for products or people across some of the routes into and out of the UK. He is reported to have told P&O to rehire the 800 staff it sacked earlier this month.

Actually Group, the luxury holiday park developer,  is investing £4m to create a new luxury retreat in North Yorkshire. Keld Spring Lodge Retreat is located on a nine-acre site near the village of Wombleton in Ryedale.

OTHER LEISURE:

Spotify is to pull out of Russia having only entered the market in 2020. It has said that the threat of jail terms for spreading “fake news” is the reason.

FINANCE & MARKETS:

The SMMT has reported that car production in the UK was down 41% last month compared with Feb 2021. This is the lowest for the month since the credit crunch year of 2009.

Trade may be disrupted somewhat as ‘Operation Brock’ was been re-introduced at least temporarily last week to control excess lorries backed up on the M20. The shortage of P&O ferries may add to the problem.

Sterling mixed at $1.3144 and €1.2001. Oil price lower at $116.24. UK 10yr gilt yield up 5bps at 1.69%. World markets mixed on Friday with London set to open up around 5pts as at 7am.

RETAIL WITH NICK BUBB:

• Nick is taking a well-earned break.