Interest rates, state of play, C&C, Jet2, un-lockdown losers & other:

A DAY IN THE LIFE:

How is it that, when I try to navigate our Firestick or even the general remote, the speed of light seems to slow down?

I mean I doubt I’m bouncing the signal off the moon or any other body distant enough to make a difference, so what’s going on?

Indeed it’s so bad that, when scrolling programmes or changing from one channel to another, I can end up five or ten clicks ahead of the screen such that I don’t know what on earth is going on.

And I know the rationale response it to throw the remote at the screen and knock over your cup of tea before flouncing out of the room – but that just wouldn’t solve the problem at all, would it?

Anyway, the Championship playoffs start this weekend. They were skilfully swerved by The Mighty Hull City (by losing on the last day of the season) and the team went on to accidentally sack its highly-regarded manager leaving supporters somewhat baffled. 

Anyway, have a great weekend, weather looks good. On to the news:

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PUBS & RESTAURANTS:

Interest rates:

Bank of England Governor Andrew Bailey indicated interest rate cuts could happen as early as June but are more likely in August or September. Bailey stated that while there’s optimism about slowing price rises, more evidence is needed before considering cuts. Despite inflation currently at 3.2%, forecasts suggest it will approach the Bank’s 2% target soon, with economic growth expected to be 0.4% for Q1 2024 and 0.2% from April to June. UKH has expressed disappointment…

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State of play:

A joint survey by UKHospitality, the British Beer & Pub Association, Hospitality Ulster and the British Institute of Innkeeping has showed that pubs and hospitality venues ‘have the appetite to invest in the future of their businesses, despite the wide range of cost pressures they continue to face.’

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Other news:

Costs. Interviewed on the Today Programme earlier this morning, City Pub Group’s Clive Watson said that labour costs had risen by around 20% in the last two years and that prices had moved up to cope. He suggested that the move by government was inflationary and that a better way to address low pay would have been to increase personal allowances. Mr Watson reported that beer prices had risen ‘by 7-8%’ in the last year or around 40p per pint.

John Lewis is reported set to cut 3,800 jobs. A weakening jobs market will a) impact demand and b) will strengthen the case for rate cuts.

COMPANY NEWS:

C&C Group has this morning announced that its full year numbers, previously scheduled to be released on 23 May, will be delayed. The company reports ‘whilst the preparation of the Group’s Annual Report and Accounts for FY2024 is well advanced, additional time is required to complete a review of certain non-cash accounting measurements relating to previous financial periods…’

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Dishoom is set to expand its Permit Room concept with new venues in Oxford and Cambridge this year. The all-day bar-café concept, inspired by Bombay’s permit rooms, will offer a range of ‘drinking food’.

Insolvency Insider reports that Ryan Grant and Howard Smith of Interpath Advisory, the joint administrators of Milton Portfolio Op Co 3, (a portfolio of Wear Inn Pubs) have secured deals for all 25 of the company’s pubs after the sites traded for over five months in administration….

Oregon-based Dutch Bros reported record Q1 sales, reaching $275.1m, up 39% YoY….

Krispy Kreme reported strong Q1 results, with net revenue up 5.7% YoY to $442.7m and organic revenue increasing by 6.7% to $440.9m….

Papa John’s announced its Q1 results, revealing a 2% decline in North America comparable sales and a 3% decrease in International comparable sales. Despite challenges, the company reported 8 net unit openings and global system-wide restaurant sales of $1.23bn. Operating income decreased by 11% YoY, while adjusted operating income increased by 10%….

Beyond Meat reported a wider-than-expected quarterly loss and an 18% drop in revenue due to weakened demand for its higher-priced plant-based meat products….

The Times reports that Gordon Ramsay is ‘betting on the continuing return of City workers to the office after announcing plans for the UK’s highest restaurant and bar at 22 Bishopsgate, London.’

Heineken’s United Breweries Limited (UBL) reported a significant increase in profit, with net profits soaring to $7.7m and revenue from operations rising 17% YoY to $459m in calendar Q1….

LOSING STREAK OF WHAT HAD PREVOUSLY BEEN LOCKDOWN WINNERS:

Introduction: The FT ran an interesting piece yesterday suggesting that pandemic era winners have suffered a US$1.5 trillion fall in value. The piece is rather US-centric but, whilst the bigger examples cited by the FT may include US giants such as Zoom, Peloton, Pinterest, there are several examples on this side of the pond.

In the UK. Online retailers may have been amongst the largest losers in the UK. Habits did revert and, whilst online delivery remains a growth industry, volumes have been either exhibiting more modest growth or, in some cases, have actually been under downward pressure….

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HOLIDAYS, HOTELS & LEISURE TRAVEL:

Jet2.com and Jet2holidays are boosting capacity for summer 2025 by adding 35,000 seats across destinations in Spain, Turkey, Greece, and Croatia from nine UK airports….

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Alpine Action, a UK ski operator with five catered ski chalets in Meribel, has ceased trading as of May 7, 2024, due to significant commercial challenges exacerbated by Brexit and Covid. The closure impacts bookings for the 2024-25 winter season, with affected clients to receive full refunds.

Hoseasons experienced a significant increase in staycation bookings during the recent bank holiday weekend,  up 44% YoY….

Amadeus reported a 2.8% increase in air bookings through its global distribution system in Q1, signalling a normalisation in booking growth….

Research quoted by The Times suggests that ‘thousands of international travellers who used to visit the UK for VAT-free shopping have turned to luxury retailers in Paris and Milan after the British government scrapped the tax incentive in 2021.’ It says some 162,000 visitors from non-EU countries sought VAT refunds in the UK in 2019. Now 20 per cent of those tourists are claiming tax rebates in EU countries which still have shopping schemes.

OTHER LEISURE:

Blackstone appears to have emerged as the likely winner in the bidding war for Hipgnosis Songs Fund with its £1.26bn offer after rival Concord Music decided not to up its £1.21bn offer. If approved by at least 75% of Hipgnosis shareholders, Blackstone’s bid would mark a significant development in the music rights investment landscape.

FINANCE & MARKETS:

For interest rate comments see Pubs & Restaurants above

In a move that is likely to confirm that the UK’s recession was a) short and shallow b) over, the ONS reports this morning that ‘monthly real gross domestic product (GDP) is estimated to have grown by 0.4% in March 2024, following growth of 0.2% in February 2024 (revised up from 0.1% growth in our previous publication) and an unrevised growth of 0.3% in January 2024….’

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The NIESR says ‘we do not expect a rate cut until August. We now anticipate only two rate cuts by the end of 2024, leaving Bank Rate at 4.75 per cent….’

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Sterling mixed at $1.2512 and €1.1623. Oil higher at $84.45. UK 10 year gilt yield up 1 basis point at 4.15%. World markets better again yesterday and London set to open up around 40 points as at 6.30am.

RETAIL WITH NICK BUBB:

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