Business tracker, inflation, Amber Taverns, Costa, interest rates etc.:

A DAY IN THE LIFE:

If you think that the blaring siren of an ambulance or the wail of a fire alarm can rattle your fillings and shake you to your inner core for a moment or two (or half an hour if you have the misfortune to be sleeping in a hotel where the reception desk is ‘temporarily unmanned’ and someone nips out for a cig through a fire door), then spare a thought for Brian Blessed’s daughter, who recently said ‘I have experienced many a one-man show about five inches from my face.’

Because that must be quite an experience and, if Brian Blessed is like any of the dads, including myself, that I’ve met over the years, I would imagine he thinks the joke is funny for several decades after everyone else has given up on it.

Anyway, the weather’s glorious. Not too hot up north but rain tomorrow. Have a good weekend and on to the news:

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PUBS & RESTAURANTS:

Food price inflation. IGD has said that due to its reliance on food imports and the impact of Brexit, the UK is ‘uniquely exposed to current pressures’ on food prices.

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Trading:

Coffer CGA Tracker. This headlines that managed groups’ like-for-like sales, across pubs & restaurants combined. were flat in May as the ‘cost crisis deepens.’ Overall LfL sales were up by 0.1% on 2019 in May.

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Lumina has updated on the UK eating out market, saying that it believes it will be worth some £102.8 bn in 2025 (2022 estimate £95.2 bn.

Lumina further reports that some 23% of consumers ate out in the 12 weeks ended 15 May 2022. Last year, when dine-in was outdoor only, it was 15pps lower. Lumina says consumers are being impacted by inflation with more now concerned about prices. It says ‘operators across the UK eating out market will be buoyed by the end of the pandemic and the impact of a year’s trading without restrictions.’

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The Night-Time Industries Association has said that the proposed rail strikes next week will have “catastrophic impact” on trade by limiting access to cities and events. CEO Michael Kill says ‘the announcement of the strike day timetable, with services being reduced to 20% on strike days, with the last service ending at 6:30pm, will have a catastrophic impact on trade.’ Not being able to travel in the evenings will be particularly harmful.

A report from Barclays Corporate Banking warns that the hospitality and leisure sector’s post-pandemic revival could be severely hindered by the cost-of-living crisis and a widespread lack of staff.

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Cost of living crisis:

A survey undertaken for the BBC has looked at what consumers are cutting back on. It says that food is top of the list. One would imagine the majority of the change here is in the mix, rather than the quantity. Number two is clothes, where at least spending can be deferred or postponed rather than lost and no3 is ‘going places’. This may amount to a bigger ticket saving but, after two years of Covid, it does involve switching spending back from ‘experiences’ to ‘things’.

Other news:

Another tough day in some parts of leisure yesterday. All down 5% were Brighton Pier, Intercontinental Hotels, Jet2 and M&B. Falling further were C&C, Deliveroo, Domino’s, Entain and Whitbread, all down 6% and Various Eateries, down 7%. Restaurant Group and Shaftesbury were down 8% and TUI and Cineworld were some 9% lower. Just Eat and Carnival lost 10% of their value on the day.

Transport minister Grant Shapps says that the RMT’s planned train strikes will drive passengers away and threaten rather than protect rail workers’ jobs. They will certainly deter customers from frequenting city centre bars, pubs, restaurants and clubs. Mr Shapps urged unions to call off next week’s strikes, with thousands of workers set to walk out on 21, 23 and 25 June.

COMPANY NEWS:

Sky reports that Fortress Investment Group, owner of Punch Pub, is exploring a potential takeover of smaller rival Amber Taverns. The acquisition would create a leisure group operating from nearly 1500 sites. The auction, which is being run by Sapient Corporate Finance, could command a price tag of about £200m.

According to Lumina Intelligence’s UK Eating Out Market Report 2022, Nando’s is expected to grow its outlet numbers by 4% in 2022 to reach 465, reaching an 11.7% share of the branded restaurant market.

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Costa Express will roll out an integrated hot and cold self-serve coffee machine in the UK, after a successful trial in Bristol last year. Over 1,100 machines will be available across England, Scotland and Wales.

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The MCA reports that Comptoir Group aims to balance its estate by rolling out its QSR format Shawa. The Comptoir brand currently has 22 restaurants whereas Shawa currently has two sites. The group is looking to develop a further four company owned and operated Shawa sites over the next 12-18 months.

McDonald’s is to pay the French government some €1.2 billion in order to settle a case in which it had been accused of years’ worth of tax evasion. McDonald’s has said that the settlement was not an admission of guilt.

HOLIDAYS & LEISURE TRAVEL:

A European Travel Commission study has found that 73% of Europeans plan to take a holiday between June and November despite concerns over high inflation, the Ukraine war and ongoing pandemic. Interest in visiting other European destinations (58%) has increased by 7% since last summer. The top travel destinations remain Spain, France and Italy (10% each), followed by Greece (7%) and Croatia (6%).

The Caterer reports that Peel Hotels has put three more of its properties up for sale: the Caledonian hotel in Newcastle, the Midland hotel in Bradford and the George hotel in Wallingford.

The Inn Collection Group has acquired the prominent Ravensworth Hotel off a guide asking price of £1,195,000. The hotel is situated in the Lake District national park and which is set to be converted and reutilised for staff accommodation. The Inn Collection Group now has 31 sites across the North of England and North Wales.

The Advantage Travel Partnership reports that new bookings for summer departures rose some 33% week on week. They are now up 12% on 2019.

Meanwhile, Gatwick Airport is cutting flights numbers during the peak summer period due to staff shortages. The number of daily flights will be cut to 825 in July and 850 in August, down from 900 in prior years.

Heathrow has said it will take more than a year to resolve staffing issues. Heathrow says ‘across the sector, very skilled jobs have been lost and it does mean that as an industry we are having to recruit people back, train them up again to be able to serve passengers, and that just takes time.’ It adds that it is ‘very easy to slam the brakes on the industry, lead to enormous job losses, but much harder to scale it up again.’

WPI Economics has reported that face-to-face meetings will continue to be a driver of business travel in the UK. It says that 45% of respondents to a recent poll said they would increase air travel compared to 2019.

OTHER LEISURE:

Playtech has announced that the put-up-or-shut-up deadline by which time TTB Partners had to make its intentions clear has been extended to 15 July from 17 June. It says ‘this is not an announcement of a firm intention to make an offer, and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.’

FINANCE & MARKETS:

The Bank of England’s MPC yesterday raised interest rates from 1% to 1.25% in order to combat inflation. Rates have risen from 0.10% to 1.25% in pretty much a straight line. Rates are at their highest level since 2009.

Inflation. The Bank of England has raised its inflation forecast from around 10% to around 11% once a second round of energy price rises impact in the autumn. Bank Governor Andrew Bailey had previously said that inflation was ‘transitory’ and that workers should not push for pay rises to compensate themselves for falls in real income levels.

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May CPI numbers are out next week.

The BCC comments on yesterday’s rise saying ‘while expected, the decision to raise the interest rate will add further concern to businesses amid a weakened economic outlook, soaring cost pressures, and labour shortages.’

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Sterling up at $1.2301 and €1.1686. Oil price up at $119.15. UK10yr gilt yield up 6bps at 2.52%. World markets weak yesterday but a bounce is on the cards. London set to open some 59 pts higher as at 6.30am.

FORTHCOMING NEWS:

Another relatively quiet week on the numbers front next week. Coca Cola HBC hosts its AGM on Tuesday and Chapeldown does the same on Wednesday. Naked Wines announces full year numbers on Thursday.

A bit more lively on the economics front. UK CPI and RPI numbers come out on Wednesday with Public Sector Borrowing numbers on Thursday. Friday should see Flash PMI numbers as well as the widely-followed GfK Consumer Confidence numbers.

RETAIL WITH NICK BUBB:

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