Food prices, trading, SBUX, Tim’s, TUI, YUM & other:

A DAY IN THE LIFE:

Having done OK for most of the week in avoiding getting ripped off, we managed to pay £16 for a beer in the centre of Rome on Wednesday, indeed £40 for two and a half drinks.

OK, so it was Euros rather than pounds and we did seem to get one litre steins – an understandable mistake when a ‘large’ beer is usually only 400ml – but nonetheless, it’s the most I’ve paid for a beer by some considerable distance.

But, to channel Steve Coogan’s swimming pool manager, it’s best to keep one’s outrage in proportion because, as a result of that transaction, nobody died.

Anyway, we’re coming home later today. Burnt and tired, yes. Poorer, yes. Well rested, maybe not so much. Have a great weekend and let’s move on to the news:

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PUBS & RESTAURANTS:

Food price caps:

The Institute of Economic Affairs has commented on the proposal for food price caps to be implemented by the government, saying there are at least three ways in which this scheme could backfire….

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Trading:

Barclays has reported that ‘pub and bar transactions were up 27.3 per cent [last weekend] as Brits headed out to socialise and make the most of the warm weather…’

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Other news:

C&C has written to the first minister of Scotland, Humza Yousaf, expressing “serious concerns” about the UK government’s decision to exclude glass….

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SOME CLARITY ON COVID:

This is an expanded version of a note that was sent to clients earlier in the year. The theme being that, as time was now passing, the impact of Covid – social, financial, cultural etc – was becoming a little clearer and the ‘new normal’ likewise.

On the other hand, other events, such as the war in Ukraine and the attempt to reverse QE have impacted trade, disaggregating the various factors has become difficult. Nonetheless…

Today, something of a summary: With the start of the pandemic almost three and a half years ago – and even Omicron now some 18mths old – some of its impacts on hospitality are clear whilst the jury is still out in other areas. Short term emergency measures were always going to be short term. State aid and shutdowns have gone.

An accelerant rather than a revolution? To an extent, Covid either accelerated trends that were already in place or it provided…

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COMPANY NEWS:

Starbucks has reaffirmed its goal of reaching 9,000 stores in China by 2025 during CEO Laxman Narasimhan’s visit to the country..

Tim’s China reports revenues up 50% YoY to RMB 336.5m ($47.5m) during the three months ended 31 March 2023. Net losses, however, widened to RMB 174.5m ($24.6m) compared to RMB 151.3m ($21.3m) for the same quarter of 2022. Tims China opened 31 net new stores in the quarter to reach 648 outlets nationwide, 551 of which are company-owned and operated.

Joe & The Juice has opened its 350th store with a new outlet at Copenhagen Airport, with the Danish chain now operating across 17 markets worldwide. The company opened 10 net new outlets in the UK last year to reach 63 across the country.

Yum Brands CEO David Gibbs has presented at Bernstein’s 39th annual Strategic Decisions Conference saying that the group is still “in its infancy.” He says further expansion and potentially acquisitions are likely.

Rémy Cointreau reports operating profit up 16.2% for its 2022/23 fiscal year, beating expectations but with the company maintaining its cautious outlook for this year.

Oak View Group has acquired Rhubarb Hospitality Collection from LGT Private Debt…

HOLIDAYS & LEISURE TRAVEL:

TUI-owned Marella Cruises reports that sales for the next 8 months have surpassed 2019 levels as demand for all-inclusive holidays remains high….

Dalata Hotel Group plc has announced that it have ‘exchanged contracts to acquire the long leasehold interest of the Apex Hotel London Wall, for consideration and a gross asset value of £53.4 million (€62.2 million) from Apex Hotels Limited, subject to standard contractual conditions and approvals.

FINANCE & MARKETS:

The S&P Global/CIPS UK manufacturing purchasing managers index (PMI)  reports ‘lacklustre’ overseas demand for products made in the UK and a shift in spending away from goods to services in the country led to the 10th consecutive month of decline in activity in the sector.

Nationwide reports that house prices fell by 3.4% in the year to May…

Eurozone inflation fell much faster than expected to +6.1% last month, lower than the +6.3% expected by analysts. Core inflation dropped to 5.3%, down from 5.5%, again, lower than analysts’ forecasts.

Sterling up at $1.2532 and €1.1638. Oil higher at $74.65. UK 10yr gilt yield down 5bps at 4.13%. World markets better yesterday & London set to open some 17pts higher.

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