Rising rates, ROO, Xmas, costs, Adnams, Pret, Tim Horton & more:

A DAY IN THE LIFE:

So, having somehow strung two wins together within the same calendar month, the Mighty Hull City has risen to the dizzy heights of 16th in the league.

And, I think I speak for most supporters when I say we’d gladly leave the season there if we could. However, optimism is bound to creep in and, it we can carry on scoring more goals in each match than we concede, we’ll be in the Premiership next season and the Champions’ League the season after.

Too much to ask? On to the news:

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DELIVEROO – Q3 ANALYSTS’ CONFERENCE CALL:

Deliveroo on Friday morning held an analysts’ call for its Q3 update, and our comments thereon are set out below:

Gross Sales. ROO said that GTV per order for Q3 was up by £2 YoY, with 70p of this being currency impact, with the remaining £1.30 increase being driven mainly by food price inflation, rather than consumer fee increases. The company said that so far, the increase in the consumer fee does not appear to be “wildly elastic”. The company stated that it had elasticity data for non-inflationary environments, but that it did not have much data for inflationary environments.

Overall orders were down during Q3 down, worsening sequentially to -5% and then -7% in the last two months of the quarter. Average monthly users were flat YoY at 7.3m, the company said that Q3 is normally the slowest quarter for active users on the platform.

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PUBS & RESTAURANTS:

Trading:

CGA has updated on drink sales in the week to 15 October saying that sales ‘beat 2021 again, but inflation scuppers growth.’ It reports that ‘drinks sales in Britain’s On Premise have exceeded last year’s levels for the fourth week in a row’ with total drink sales up 5% on 2021 and up 4% on 2019…

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Trading continued:

The latest Deloitte Consumer Confidence Tracker has shown that consumer confidence has fallen to a record low, with households particularly cutting back on leisure spending to save money as the cost of living crisis begins to bite…

Accountant EY has reported that companies produced more profit warnings in Q3 this year than in any other Q3 for 20yrs. It reports 86 profit warnings coming from London-listed companies in the period, up 34% on the previous quarter. EY says that almost half of the warnings came from retailers…

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Christmas.

Lynx Purchasing says that menu planning this Christmas will be essential as costs are rising rapidly. It points to avian flu as potentially causing problems. ONS reported inflation is running at 10.1% and Lynx’s measure of food price inflation for food eaten out of the home is around 10.4%. Lynx says ‘from the turkey dinner right through to the cheeseboard, the price of many seasonal products is high as the peak trading season approaches. In addition, core menu items such as dairy, canned tomatoes and cooking oil, which are part of a wide range of recipes, are seeing continued increases and price volatility…’

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British retailers and hospitality groups are beginning to warn that the failure to secure staff ahead of Christmas could mean that trading over the period fails to achieve its potential.

Costs & the consumer:

Inflation gets real. First sausage rolls and now Tesco has raised the price for a Tesco meal deal from £3.50 to £3.90, Clubcard members will see the price go from £3 to £3.40. Food inflation is running at an annual rate of 14.5%….

Former Bank of England governor Lord Melvyn King told the Laura Kuenssberg programme yesterday that the UK faces a “more difficult” era of austerity than the one after the 2008 financial crisis…

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Politics:

Hard to ignore as politics is impacting the real world. JD Wetherspoon chairman Tim Martin comments that the next PM will be scrutinised closely by the bond market…

Writing in the Sunday Times, Matthew Syed suggests that the most constructive thing the Tory Party could do for both itself and the country, is call a General Election. He says it is perhaps the single least likely outcome of the current impasse.

Nothing to see here, nothing to do with Brexit. The UK had five Prime Ministers in the 37yrs before the Brexit vote. It will shortly have had another five in the 6yrs since. (Counting David Cameron in both the pre- and post-period).

The Sunday Times is calling for less narcissism, more competence. The Express says Boris is Back. Both physically, in that he is back from his holiday taken during term time and maybe wishfully thinking metaphorically as PM.

Other news:

Responding to the Digital, Culture, Media and Sport Committee’s ‘Promoting Britain Abroad’ report, UKH CEO Kate Nicholls comments that the ‘committee is absolutely right to highlight the enormous value tourism offers to the UK economy, and hospitality is at the heart of that offering.’ She says ‘every part of the UK has something to offer tourists and we have a fantastic reputation as a country, but we should not rest on our laurels and we need to be globally competitive…’

Provenance: KAM comments on provenance saying that some ‘47% of consumers want to see more locally sourced items on menus – and 34% of operators are already offering more locally sourced options than last year…’

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US consumer experience. Revenue Management Solutions in the US has found that menu price increases of more than 10% to 13% have a negative impact on traffic…

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COMPANY NEWS:

Tim’s China has opened its 500th Tim Horton’s in China, reporting revenue up 70% YoY to $56m over the last six months. Tims China, which launched its first store in 2019 in Shanghai, began trading on New York’s Nasdaq in September 2022.

The Inn Collection Group is refurbishing 3 iconic Lake District Inns: The Wateredge Inn, The Waterhead Inn and The Angel Inn. 

Pret A Manger has opened its first store in Kuwait via Kuwaiti franchise partner One PM. Pret plans to double the size of its global store count by 2026.

Wendy’s in the US is promoting its $3 breakfast menu.

Adnam’s has announced that director Michael Heald has purchased 3,000 shares in the company at £89 each.

The Telegraph reports on an interview with Julian Metcalfe, founder of Pret and Itsu saying that food prices are ‘only just beginning to go up.’ He says ‘some have suddenly almost doubled.’ Metcalfe adds ‘restaurant prices are going through the roof. Who is going to buy a panna cotta for 25 quid? Nobody.’

HOLIDAYS & LEISURE TRAVEL:

Alan Bowen, advisor to the Association of Atol Companies, has claimed that government U-turns on tax cuts, the removal of the energy price guarantee from April and a warning of ‘eye-watering’ spending cuts will damage demand for travel…

Gatwick will operate flights to 172 destinations over this coming half-term break, 87% of the number it served in the same holiday period in 2019.

The Hoxton will open its fourth London hotel in Shepherd’s Bush this December, followed by 6 more openings across key European cities by early 2024.

A HVS study has found that hotel franchising gives operators support and confidence in tough times…

Travel Weekly reports that travel agents have remained optimistic about the peak January sales period but expect companies to be ‘smarter’ with their marketing spend. Independent Travel Experts said its members would be “ready to hit the ground running and adapt as the market requires” in January.

Spain has removed its last covid restrictions for UK travellers to the country.

OTHER LEISURE:

Twitter has briefed its staff that there are no plans for mass redundancies despite Elon Musk declaring that he will make 75% of Twitter’s current workforce redundant when the $44bn takeover is completed.

FINANCE & MARKETS:

The ONS on Friday updated on government borrowing saying that net borrowing was £20bn in September, around £3bn ahead of forecasts. Debt interest cost taxpayers £7.7bn for the month of September alone. Government spending rose by £5.8bn to £79.3bn in the month.

The ONS on Friday reported that retail sales volumes fell more than expected by 1.4% last month.

Outgoing PM Liz Truss is reported to have ignored the advice of supportive economists ahead of her ill-fated mini-Budget last month.

Ratings agency Moody’s has cut its outlook on the UK economy to “negative” from stable due to political turmoil and high inflation. Moody’s says that there are ‘risks to the UK’s debt affordability’.

Sterling up on Boris Johnson’s withdrawal from the race to become PM at $1.1332 and €1.151. Oil up at $93.03 and the UK 10yr gilt yield up 12bps at 4.06%. Shares broadly higher on Friday & London set to open up some 4pts as at 6.30am.

RETAIL WITH NICK BUBB:

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