JDW, Virgin Wines, WTB, Gail’s, Tandem, trading, staff costs & other:

A DAY IN THE LIFE:

I have a plastic bag that I carry around, boy-scout-like in the pocked of my coat, that claims to be both biodegradable and reusable.

And, whilst that could be – and indeed is -possible in the short term, the two objectives are surely incompatible in the longer term and, if the holes that are developing all over it are anything to go by, my next pint of milk could end up meeting the pavement in a way that was really not intended.

The holes, of course, serve as a warning. I have been served, as it were, and I won’t be able to deny it but, since the bag seems to be tearing, ripping and falling to pieces rather than biodegrading, I can’t help thinking I’ve been somewhat misled.

Anyway, it’s a short week this one. And next week as well so, rather than waste more time on banal trivia, let’s move on to the news.

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JD WETHERSPOON – ANALYSTS’ MEETING:

JD Wetherspoon on Friday reported H1 numbers, and our comments thereon are set out below:

Current trading: JDW said there is no change to FY guidance but acknowledged that it is about to lap tough YoY comparatives. At the same time, the NLW is set to increase 9.8% which will put pressure on labour costs. The company stated that last year’s labour costs increased by c7-8% and that it expects a similar increase in FY24 as the NLW increase concertinas up through staff pay differentials. It went on to say the NLW increase could push LfL sales upwards as consumer expenditure is boosted by the additional wages. JDW reported that trade has “settled down now” after a subdued start to the year with the hospitality industry picking up and companies….

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PUBS & RESTAURANTS:

Trading:

CGA by NIQ’s Daily Drinks Tracker has shown that ‘Mother’s Day, big sporting events and the run-up to St Patrick’s Day all helped the On Premise sustain drinks sales growth last week’. It says that, in the week to 16 March, average sales in managed venues were 1% ahead of the same week in 2023. That’s clearly lagging inflation and is markedly less good than the +5% turned in for the previous week. However, the week excluded St Patrick’s Day, which was included in the 2023 figure…

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Demographics:

Chancellor Jeremy Hunt yesterday said that the Conservatives will keep the triple lock system in place should the party win the next election. He acknowledged this is an ‘expensive’ promise but says that growth will pay for it.

Cost of living issues:

The Daily Mail maintains that ‘every month 150,000 mortgage holders reach the end of cheap fixed deals.’ This will have a cumulative impact on aggregate spending. The Mail says that ‘many find they’re moving to rates that are two, three or even four times higher.’

Coffee:

The World Coffee Portal updates on the market for coffee shops in China saying that, having exceeded the size of the US market last year (in reaching c50,000 units), there are still ‘huge opportunities for coffee businesses among China’s 1.4 billion citizens….’

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Staffing:

Access Hospitality reports that hospitality employees are ‘happier at work than they were, despite mid-level pay squeeze.’ This would be consistent with a reducing of differentials in the face of large NLW and NMW increases further down the pay scale…

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Delivery:

According to Lumina Intelligence, the UK Foodservice Delivery Market expected to grow by +2.8% to £14.1bn in 2024, after the boom in delivery from the pandemic has now stabilised….

Other news:

The Scottish public appears divided on whether to end the ban on drinking alcohol on ScotRail trains, with ScotRail’s chief operating officer stating that opinions are ‘50/50….’

Jobs market: Waitrose has become the latest major firm to announce that it is cutting jobs.

COMPANY NEWS:

Virgin Wines has reported H1 number to 29 December saying that total revenue rose by 2% to £34.3m with underlying EBITDA up 122% at £1.76m. The company reports PBT of £1.1m (2022: £90k) with EPS of 1.4p against 0.1p last year. The company reports that net cash is now £11.0m (2022: £7.6m)…

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Whitbread. The Sunday Times reports that ‘Whitbread is set to sell or convert a third of its Beefeater and Brewers Fayre pubs estate after a private equity swoop collapsed.’ It quotes ‘sources’ as saying that Whitbread was in exclusive talks with Platinum Equity to buy a number of its outlets. It says no price could be agreed…

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Gail’s. Sky News reports that ‘the owners of Gail’s [Bain Capital], the chain of bakeries and coffee shops, are preparing to hire advisers for a sale that would value it at well over the £200m price tag at which it changed hands nearly three years ago.’ The potential vendors have declined to comment. Sky says any transaction could be next year.

The Ivy. The Sunday Times reports that Manchester City owner Sheikh Mansour is interested in buying The Ivy….

JD Wetherspoon. The Press focused on the 8-fold increase in profits whilst The Sunday Times featured a 24-hours in JD Wetherspoon marathon by one of its reporters who was seeking to investigate its appeal across different demographics.

Little Caesars, a US pizza brand, has expanded into London with its first outpost in Greenford, operated by franchisee Rajan Sandhu….

In the US, DoorDash and Wing, a drone delivery manufacturer, are launching a pilot program for drone delivery from a single Wendy’s location in Christiansburg, Virginia. Delivery times are estimated to be around 30 minutes.

Popeyes is rapidly expanding its presence in the UK with four new openings in the past 10 days, including locations in County Durham, Bishop Auckland, and Exeter…

HOLIDAYS, HOTELS & LEISURE TRAVEL:

The travel industry has been warning that a strike by security workers at Palma Airport has the potential to cause delays over the Easter getaway.

Travel Money research has suggested that 51% of Britons intend to travel abroad this year. The number rises to 58% for those aged between 16 and 34.

Club Med has observed a surge in last-minute ski bookings as sales for ski resorts in Europe have increased by 23% YoY overall for spring, particularly in March and April….

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New data from Abta indicates a rising trend in solo travel, with 16% of travellers embarking on solo holidays in the year to August 2023…

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Southend Airport’s CEO, John Upton, reassured passengers, airlines, and staff that the airport’s operations remain unaffected by its owner Esken’s collapse into administration. Upton emphasised that the ownership transition to Carlyle and Cyrus Capital Partners is progressing smoothly, ensuring a financially stable future for the airport.

OTHER LEISURE:

Bicycle and sports equipment retailer Tandem has reported full year results to end-December saying that revenue slipped to £22.2m from £26.7m in the prior year resulting in a loss before tax of £1.2m versus a profit in the prior year of £0.9m. It says this is in line with market expectations. The company reports that margins slipped to 27.0% from 29.2% in the prior year and cash balances fell to £0.4m at end-December from £3.3m a year previously. There is no dividend (2022: 6.57p)….

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Private equity firm Apollo Global Management has reportedly offered $11bn to acquire Paramount Global’s film and TV studio….

Toys R Us has announced its acquisition of arts and crafts retail brand Riot, aimed at diversifying its product range and enhancing its presence in the e-commerce market. The acquisition also includes securing up to $5m in funding from US-based investment fund Mercer Street Global Opportunity Fund II LP.

FINANCE & MARKETS:

The CBI reports that manufacturing output has fallen again (in the three months to March), but it says that firms are more optimistic for the next quarter…

The Resolution Foundation, the NIESR and the Institute for Public Policy Research have concluded that the fiscal targets imposed by the current government are ‘not fit for purpose’. The bodies say the measures have led to spending decisions that have constrained economic growth.

Sterling weaker at $1.2607 and €1.1656. Oil higher at $85.65. UK 10yr gilt yield down 6bps at 3.93%. World markets mixed on Friday towards the close with London set to open around 16 points lower as at 6.30am.

RETAIL WITH NICK BUBB:

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