Langton Capital – 2022-10-28 – Surveys, delivery, menus, McDonald’s. Amazon, Apple, Accor etc.:
Surveys, delivery, menus, McDonald’s. Amazon, Apple, Accor etc.:A DAY IN THE LIFE: We don’t want to give our puppy any more phobias than she already has but, as one or two of her afflictions can be put to good use, we’re tempted to do so. Indeed one fear – or at least intense caution – is shown when it comes to plastic bottles. Maybe she doesn’t like the sound empty ones make when they fall on the kitchen tiles or the loud crackling noise they make when I stand on them to squash them for the recycling but, wherever the concern has come from, it means we can surround ourselves with empty bottles when we want a bit of peace and quiet or when she gets a bit hyper (a.k.a. nippy) in the evening. Hence, if there are any photos circulating on WhatsApp of us watching TV whilst surrounded by empty plastic milk bottles, that’s what’s going on. We aren’t bragging about how much milk we drink and it isn’t some sort of weird ritual but rather an attempt to stop our ankles from being bitten by a naught puppy. At least that’s our story and we’re sticking to it. Have a great weekend, enjoy the extra hour in bed and let’s move 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. Prices for the Premium at time of writing are £345 for one subscription, £595 for multiple, both plus VAT. Or sign up for easy in, easy out monthly option HERE https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=87YUG2Z5W7PSN RECENT ECONOMIC & TRADE SURVEYS: In addition to updates from Deloitte and Asda (its income tracker) that we covered yesterday and CGA’s update on Hospitality at Home, we have recently had surveys from CGA (September Tracker), Alix Partners (outlet numbers) and Begbies Traynor (financial red flags) and herewith a very short summary: Overview: The surveys and stats were downbeat and negative in tone. That is not a shock. September trading: This was heavily impacted by the Queen’s death, the mourning period and the funeral. It was an atypical month. Pubs were up 1.7%, Restaurants were down 7.9% and bars were down 16%. Add in inflation and the ‘real money’ numbers were all 10pps lower. The above makes sense. Pubs held up, the funeral etc were not ‘restaurant occasions’ and the comment on bars was mirrored by RBG earlier this week. Unit numbers: Alix Partners points to the closure of an increasing number of independent operators. This is understandable as a) times are tough and b) independents tend to have thinner balance sheets and fewer economies of scale than do managed chains. • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. PUBS & RESTAURANTS: Corporate responses to challenging trading conditions. Whilst many, indeed most, operators have increased prices, ticket price increases have not been the only response to current tougher conditions. Menu engineering. Lumina Intelligence reports that operators have also streamlined menus. They have used this, where possible, to minimise headline price rises & it also suggests that operators have ‘customised’ dishes in order to hide (or to be charitable, to draw the eye away from) price increases… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Canny customers: Some operators, not just in hospitality, are holding back price rises in order to support (and curry favour with) customers. Superdrug says it is freezing many prices… See comments by Lloyds Bank on customer lending patterns in Finance & Markets below. Retail sales data: See also Nick, below. The CBI has updated on its distributive trades survey saying ‘retail sales volumes grew at a solid pace in the year to October, following last month’s decline, according to the latest CBI Distributive Trades Survey… Hospitality at Home: CGA’s latest Hospitality at Home Tracker shows that ‘drinks represent growing opportunity in delivery & takeaway sales’ and says that, whilst ‘delivery and takeaway sales across managed groups are still 91% higher than they were pre-pandemic… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Other news: UKH has responded to the government’s Net Zero Review saying ‘the UK’s hospitality sector is committed to reaching net zero by 2040 but government partnership with the sector is central to achieving the target…’ Kerb CEO Simon Mitchell has told City AM that Brexit has “absolutely screwed” the food industry after it “ripped away” its labour source. City AM says ‘businesses at the food and drink destination are facing staff shortages “for every single shift, every single day.” COMPANY NEWS: McDonald’s has reported Q3 numbers saying that visits to stores rose by 6.2% in September with same store sales up 9.5% in Q3 against estimates of a rise of around 5.8%. The group’s shares were up around 3% in early trading yesterday… • See premium. Reply for sample or to upgrade. Single £345, multiple £595. Limited time offer: PayPal monthly £25 + VAT. Easy in, easy out. Contract caterer Sodexo yesterday reported revenue growth ahead of expectations and said that it expected margins in 2023 to be back in line with those of 2019.. Texas Roadhouse in the US yesterday reported Q3 numbers saying that revenue rose by 14.3% to $993m with diluted EPS up by 24% at 93c. The company says same store sales were up by 8.2% at US owned restaurants and up by 6.7% at US franchised outlets… Amazon tumbled fell by more than 15% after the retail giant updated on Q3 sales yesterday evening. The company said ‘we’re very optimistic about the holiday but we’re realistic that there are various factors weighing on people’s wallets.’ Markets were less upbeat and chose to concentrate on the latter statement… HOLIDAYS & LEISURE TRAVEL: Accor yesterday reported Q3 revenues up by 83% on the same quarter last year to €1.1bn… The CAA has proposed putting landing charges up by around 43p per passenger to £2.03. This is likely to please airports but not airlines. Hilton Worldwide has reported Q3 numbers, beating expectations. The company made profits of $346m in the quarter with REVPAR up 29.9% on the same quarter last year and up by 5% on 2019. The company says the ‘improved performance reflected the continued strength in leisure travel, as well as recovering business transient and group demand. We expect these strong trends to continue throughout the fourth quarter with system-wide RevPAR once again exceeding prior peaks.’ OTHER LEISURE: Twitter is set to suspend its shares from trading on the NYSE as US media sources say that the sale to Elon Musk has completed. The world’s richest man said he is buying the company to help humanity. Shares in Meta (Facebook & WhatsApp) were down by 23% at one point yesterday. Apple reported Q3 numbers yesterday and beat Wall Street estimates. Revenue was up 8% on the quarter to $90.1bn, above estimates of $88.9bn, with net profit of $1.29 a share, ahead of estimates of $1.27 a share. FINANCE & MARKETS: The European Central Bank has doubled base rates across the Eurozone as it yesterday raised rates by 75bp to 1.50%. This was in line with forecasts. The US Fed updates next Wednesday and the Bank of England’s MPC will announce its latest rates decision next Thursday. The US economy grew by 2.6% in Q3. This was ahead of estimates. Most observers expect a slowdown next year. Commenting on exports, the BCC says ‘54% of businesses say smoother customs procedures are the key to boosting UK exports’. It says ‘faster customs processes, tariff reductions, removing technical barriers to trade, focused support for SMEs’ easier labour mobility, and mutual recognition of professional qualifications are the top six issues for the UK’s SME exporters…’ The IEA, which reportedly heavily influenced Trussonomic thinking, says that the concept wasn’t really tried before it was scrapped… Lloyds Bank, which owns The Halifax, has said that house prices could fall by 8% next year and then stagnate for four years. Add in inflation, perhaps 8%, 4%, 2%, 2% and 2% (if we succeed in bringing inflation under control) and the above implies a real-terms decrease of more than 25%… Sterling mixed at $1.1571 and €1.1585. Oil higher at $96.10. UK 10yr gilt yield once again lower at 3.42%, down 16bps. Markets mixed yesterday but Far East lower in Friday trade & London set to open down around 53pts as at 6.30am. RETAIL WITH NICK BUBB: • See premium. Reply for sample or to upgrade. Single £345, multiple £595. 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