YNGA meeting, labour issues, confidence, income, High Street etc.:

A DAY IN THE LIFE:

I managed to pay £14.05 for two beers in EC2 yesterday and, whilst London is London, that seemed like quite a price.

Yes, I went for one of the ritzy local craft brews and yes I could have plumped for cask and yes I paid on plastic so didn’t feel the pain that peeling off three fivers would have caused but, nonetheless, that’s pretty steep.

And, whilst the pub felt nicely busy, it’s worth remembering that a) trade has shrunk a little, down to T, W & Th if people are WFH and b) looks can in any case be deceptive.

if you have 95% of the people out on any given night then, and you happen to be one of them, to the naked eye it looks as busy as ever.

But if those people call it a day half an hour earlier and have 3 drinks rather than four, if they come out three times instead of four and if they ‘trade-down’ 10% on the drinks list, then the pub’s revenue falls by more than a half.

Depending on what the various pub companies say about footfall vs price and how the two factors make up their Like for Like sales, there is always a danger that this will happen. On to the news:

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YOUNG & CO – H1 ANALYSTS’ MEETING:

Young & Co has held its H1 analysts’ meeting and our comments thereon are set out below:

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PUBS & RESTAURANTS:

Labour market:

Whilst there are still shortages, the Recruitment and Employment Confederation and consultancy KPMG have reported that UK job growth has slowed for the first time since the 2021 Covid-19 winter lockdown. The measure used, where any number below 50 reflects a slowdown in recruitment, fell to 45 in October. London was the weakest area at 41.5…

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CEO of Next Lord Wolfson has called for more and easier immigration. He calls on the government to raise a levy on foreign workers so that employers will be incentivised to recruit domestically.

Confidence:

YouGov and the Centre for Economics and Business Research have reported that consumer confidence has slipped to its lowest score since April 2020. The number, at 94.7, is down 3.0 on the 97.7 level recorded in September. October’s number is the fourth lowest monthly reading in the history of the survey.

Disposable income.

Ahead of the Autumn Statement, which is due on Thursday next week, the Institute for Fiscal Studies has pointed out that freezing income tax thresholds would generate an extra £30bn a year for the Treasury by 2026…

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The Local Data Company reports on high street vacancy rates saying that ‘in the third quarter of 2022, the overall GB vacancy rate decreased to 13.9%, which was 0.1 percentage points better than Q2 and 0.6 percentage points better than the same period last year. This was the fourth consecutive quarter of falling vacancy rates…’

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Other news:

Sector share prices. The sector was swept up in the positive move in markets yesterday. Young & Co shares were up 3% on H1 numbers, Domino’s rose 5% and JDW recovered its early-week losses at up 6%.

Prices: London restaurant guide Harden’s has raised the threshold for venues listed in its top price band to £130 per head to reflect ‘record’ menu price rises. It said average restaurant prices had risen 8.1% over in the year to August 2022 while the 58 restaurants which charge over £130 a head had increased their prices by an average of 11.7%.

New openings. Harden’s also reports that London saw the lowest level of new restaurant openings since 2011, with just 136 new restaurants. During the year, 85 restaurants in London closed, bringing a net increase of 51, well below the 100-plus new openings recorded in a ‘golden era’ of 2014-2018.

Transport problems. Hospitality CEO Kate Nicholls warns that the impact of further rail strikes will be ‘incredibly damaging to business’ saying ‘the cumulative effect of strikes by rail and tube workers is enormous. Businesses continue to lose customers who can’t travel and they struggle to serve the ones that do visit, due to staff being unable to get into work.’

HospoDemo will hold a demonstration at Parliament Square at 11am on 14 November. The demonstrators are requesting: a VAT reduction to 10% on food and drink sales, including alcohol sales, the reinstatement of the business rates holiday and the introduction of a visa scheme to allow overseas workers to work in the sector again.

COMPANY NEWS:

Per MCA, Pret A Manger plans to roll out its self-service coffee-to-go solution to more than 50 locations in the UK by the end of the year. Interim MD Guy Meakin told MCA that ‘we’ve found that it’s important to place our Pret Express machines in high footfall areas near the entrance of the store’.

Coffee #1 has reported that sales are now at 111% of 2019 levels in Q3 as a whole and it adds they have hit 117% in October. The company says it opened 4 new stores in Q3 and has ‘more in the pipeline.’ It ‘launched a delivery partnership with Just Eat in over 60 locations and will look to expand the service further…’

Beyond Meat failed to meet analyst expectations in its Q3 results, with its $82.5m revenue falling well short of the $114.27m expected…

The Inn Collection Group will rename The Park Hotel in Tynemouth to The Tynemouth Castle after a multi-million-pound refurbishment is completed…

Various Eateries PLC has announced the appointment of James Darwent to the board as finance director with immediate effect.

Farnham-based Hogs Back Brewery is offering drinkers a free pint of Three Hogs, its beer specially brewed for football-watching, if the England squad reaches the World Cup final in December.

Amazon.com Inc is reported to be reviewing its unprofitable businesses, including Alexa, in order to cut costs. The Wall Street Journal reported yesterday that the company has told employees in some unprofitable units to look for jobs elsewhere in the company. Amazon’s shares rose by 11% on the news. Tech stocks in general have been having a bad time of it recently.

US coffee shop company Dutch Bros Coffee has reported a rise in revenue of 53% in Q3 vs the same quarter a year ago. The company says ‘company-operated shop gross margins improved in the third quarter to 20.0%.’ it says ‘we took pricing actions to partially combat inflationary pressures and benefited from operational improvements as well as the increased weighting of newer, higher-margin shops in our portfolio.’

HOLIDAYS & LEISURE TRAVEL:

Travel firms report  a ‘slight’ bookings dip in the last week versus the prior week but sales remained 2% up, as rising interest rates threaten discretionary spend. However, The Travel Network Group chief executive Gary Lewis said ‘data [is] showing households’ willingness to travel, prioritising travel and desire for experiences over material goods’.

Train drivers at 12 rail companies are to strike again on Saturday 26 November.

OTHER LEISURE:

Elon Musk has announced the end of remote working for Twitter employees, saying workers will now be expected in the office for at least 40 hours per week. Mr Musk added that there was ‘no way to sugar coat the message’ that the slowing global economy was going to hit Twitter’s advertising revenues.

FINANCE & MARKETS:

Big week for stats next week with the ONS updating on wages and employment levels (Tuesday) and inflation (Wednesday) and the chancellor presenting the government’s Autumn Statement on Thursday.

The ONS this morning released its first quarterly estimate of UK gross domestic product for Q3 this year. It shows an estimated fall of 0.2% in Quarter 3 (July to Sept) 2022. This is maybe a shade less bad than had been anticipated. However, the ONS goes on to say that ‘monthly estimates published today show that GDP fell by 0.6% in September 2022 which was affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, where some businesses closed or operated differently on this day…’

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Regarding the ‘black hole’ in the UK Treasury’s finances, The Progressive Economy Forum has said this disappears if debts are calculated differently. This is a statement of the obvious as, if you increase growth estimates and reduce estimates for benefit payments, the impact will be positive…

The Royal Institution of Chartered Surveyors has said that house prices stalled last month in the face of rising mortgage costs and the cost of living crisis. CEO Simon Rubinsohn says ‘the latest feedback to the Rics survey provides further evidence of buyer caution.’

US CPI rose by 7.7% in the year to October. This was a number considerably lower than expectations and it led immediately to positive moves in bond and equity markets on hopes that inflation may be past its peak.

The Bank of England has announced how it will unwind its gilts portfolio – i.e. the gilts bought as a part of QE or those bought in the wake of September’s disastrous mini-Budget…

Sterling stronger yesterday (mostly US$ weakness) at $1.1708 and €1.1455. Oil price higher at $95.69. UK 10yr gilt yield down another 16bps at 3.29% on hopes that inflation may be peaking (at least in the US). Markets better yesterday and London set to open up around 25pts as at 6.30am.

THE AQUIS MARKET:

Broker VSA Capital is hosting an Aquis Day on Tues 29 November at the Royal College of Surgeons (38-43 Lincoln’s Inn Fields, London, WC1A 3PE). The event will feature around 20 companies, who will present to attendants and take part in a competition to win the ‘Britain’s Got Aquis’ title. Judges on the day will include Andy Brough (Schroders) and Judith Mackenzie of Downing LLP. Tickets and details are available HERE

https://www.eventbrite.co.uk/e/the-vsa-capital-aquis-showcase-event-tickets-430890363677?aff=odeimcmailchimp&mc_eid=cfe56acbe0&mc_cid=cd83de005f

Attendance costs £20 – but Langton has a number of complimentary tickets and we’re open to suggestions as to who we should give them to…. Drop us a line.

RETAIL WITH NICK BUBB:

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