Tortilla, DGE, Rockfish, Admiral, trading, confidence, Duty & other:

A DAY IN THE LIFE:

I put my foot through one of my socks the other day and threw it in the bin.

The sock rather than my foot, that is, because it didn’t occur to me to darn the thing and that set me to thinking, just what we ‘lose’ as time goes by, whether those losses be ‘things’ or ‘skills’ or irritations.

I mean darning socks is well out.

As is mending pretty much anything and hats have gone. And ties are going the same way and, whilst turning up at a business meeting wearing Star Trek shirts and stretchy pants still isn’t quite on, you can see things going that way as the current fashion, stone-coloured trousers & light blue Oxford shirt, gives way to even more casual garb.

And, as footpaths are everywhere, mud rooms have gone out. As have coal houses, real fires and those drip strips you used to have to put under windows before you – or your parents, really – got double-glazing.

And mental arithmetic is so yesterday as is map-reading and, with phones, phone tracking, texting and the rest everywhere, forward-thinking seems to be on the back foot as well.

Not, overall, that I’m complaining.

Finding an addition error in twenty columns of numbers never excited me much as a junior accountant and getting rid of Ricketts and Scurvy has to be seen as a move in the right direction.

And dying of toothache never had much to recommend it and, talking of toothache, the Mighty Hull City returned to form over the weekend. On to the news:

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PUBS & RESTAURANTS:

Trading:

CGA has updated its Daily Drinks Tracker for the weeks to 18th and 25th of January saying that Storm Éowyn curtailed signs of a sales revival in January. The Tracker reports that ‘on Premise drinks sales picked up in mid-January after a slow start to the year—but fell away again as stormy weather swept Britain.’ CGA says that ‘footfall and spend recovered in the seven days to Saturday 18 January, with sales finishing 2% ahead of the equivalent week in 2024.’ This is, admittedly, still below the rate of inflation. CGA adds that drink sales were down by 5% against 2024 in the week to 25 Jan…

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Duty changes:

Duty changes came into force from Saturday 1 February. This should see the price of wines and spirits rise (a near certainty by the time the product reaches the till) and the price of beer fall, though the 1p drop in duty here is arguably unlikely in many cases to reach the consumer….

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Grab & Go:

The FT quotes Julian Metcalfe, who founded Pret in 1986 and who currently runs Asian-inspired food business Itsu, as saying that the latter will soon overtake Pret in terms of size. Mr Metcalfe says ‘in five years, we’ll definitely be much, much bigger than Pret A Manger because we’ll have a really fast-growing relationship with customers and no one else can supply the sort of food that we do.’ He says Pret is ‘expensive’. Itsu currently has 83 UK stores, heavily concentrated in London. Pret has 493 shops across the country.

Business confidence:

A fuller look at the Lloyds Business Barometer for January. This fell by 2pps to hit a 13-month low of 37% from 39% in December. The monitor had hit 10% in the wake of the Russian invasion of Ukraine and the measure remains nonetheless some 8pps above its long term average. Lloyds reports that the decline was the fifth consecutive monthly drop. it says that firms’ views about their own trading prospects ‘showed some resilience’ but adds that economic optimism dropped to an 18-month low……

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Other news:

NABCA data in the US shows that both the volume and the value of spirits sold in the country fell in 2024 vs 2023. Volumes were down by 0.9% with sales value down by 0.3%. amidst the declines, Tequilla continues to grow.

The Guild of Beer Sommeliers has outlined its programme on how to become a Beer Sommelier. Beer Sommeliers will need to pass four courses, Cellar Management, WSET Level 2 in Beer, Beer & Food Matching and How to Judge Beer and Understanding “Off Flavours”.

POST COVID NORMALITY BECOMING APPARENT…

Herewith parts of a note sent to clients on Friday:

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COMPANY NEWS:

Tortilla on Friday announced ‘a significant Board change aligned with its long-term technology-driven growth strategy.’ It reports that ‘Quilvest Capital Partners…has sold its 20% stake to Auctor Group, a technology holding company, as part of the winding down of its fund.’ The company adds that ‘consequently, Loeiz Lagadec, the Non-Executive Director who represented Quilvest’s interest will step down from the Tortilla Board.’ Auctor has ‘nominated Usman Ali, Managing Partner of Auctor, to take the role of Non-Executive Director on the Board of Directors at Tortilla….’

Diageo. The FT reports that ‘Diageo is under pressure to set a new course as investors grow weary of languishing sales amid wider falling demand for alcohol.’ Diageo reports H1 numbers tomorrow. The FT reports ‘there are signs that shareholders are starting to lose patience….’

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Rockfish. Seafood restaurant chain Rockfish has reported full year numbers to end-April 2024 saying that ‘on a comparable basis, profits increased by an impressive 67% year-on-year, with the group reporting EBITDA of £1.15m.’ Rockfish adds that it ‘also completed an oversubscribed fundraise in the year, in readiness for a year of expansion ahead….’

Stonegate: Stonegate has reported that it is ‘offering bottomless Guinness at 114 venues from 28 January to 17 March [to coincide with the Rugby Six Nations], as part of their Icon’s bottomless brunch.’ The company also reports that four of its Social Pub & Kitchen sites have had a revamp this week – totalling a £1 million investment.

Admiral Taverns rose in the year to 26 May 2024 to an adjusted £59.7 million, up from £55.9 million in 2023, on higher revenues of £194.5 million. CEO Chris Jowsey says ‘I think it’s really hard to stand still in pubs, you either go forward or you go back and investing significant amounts of capital really makes a difference, so that helped us grow profits last year.’

The Telegraph outlines an interview with restaurateur Rick Stein. Mr Stein agrees that it’s now a brutal time to be running a restaurant in Britain. He says ‘the imposition of national insurance on restaurant owners is really hard at a time when business is tough.’

Further to its announcement on 13 December 2024, Chapel Down ‘is pleased to announce the formal appointment of James Pennefather as Chief Executive Officer and Board Director, with immediate effect.’

Pret. Pret a Manger is set to open its first site in South Africa on 14 February. The company says this is ‘an important step in Pret’s global journey’.

Drinks Business reports that Berry Bros & Rudd, the King’s wine merchant, is to cut dozens of jobs ‘as it battles falling sales and rising costs following Rachel Reeves’s Budget’.

Diageo has announced plans to invest $415m in a new facility in Montgomery, Alabama.

Mission Mars, which operates the Albert’s Schloss and Rudy’s Pizza sites, has reported that it generated some £31.6m of sales in the quarter to 29 December. Supported by the addition of 11 new Rudy’s sites, total sales are up 43%. LFL sales in the five weeks to 5 Jan were up by 13%. CEO Roy Ellis says the ‘results reflect the commitment and effort of our colleagues.’ He adds that ‘LFL covers at Albert’s Schloss increased by 6%.’

GDK CEO Simon Wallis has told the MCA that he believes his chain has the potential to reach 300 UK sites over the next five years.

HOLIDAYS & LEISURE TRAVEL:

Safestay has updated on trading for the 12 months to 31 December 2024 saying that it recorded revenue growth of 2% to £23.0 million (2023: £22.5 million). The group says that adjusted EBITDA should be down to £6.5 million from £6.8 million in the prior year. The company adds that it managed a ‘successful debt refinancing with HSBC in January 2024 to increase the Group’s overall funding capacity and support its long-term growth plans….’

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IATA has reported that revenue passenger kilometres rose by 10.4% last year compared with 2023. Total air travel is therefore up by 3.8% compared with pre-pandemic 2019.

FINANCE & MARKETS:

Leaders of Canada and Mexico have said they will retaliate against President Trump’s 25% tariffs on imports from the US’s two neighbours.

The Nationwide reports that house price growth slowed in January with the annual rate of house price inflation falling to 4.1% compared with 4.7% in the year to December.

The EY Item Club has reported that growth in the UK economy will be around 1% this year, down from its earlier estimate of 1.5%. The EY Item Club left its estimate for 2026 in place at 1.6%. It says ‘a weaker-than-expected finish to 2024 left the UK economy with a greater hill to climb to achieve moderate growth this year, and GDP will likely struggle to accelerate beyond 1 per cent in 2025.’

Sterling mixed at $1.2280 and €1.1996. Oil lower at $76.54. UK 10yr gilt yield down 3 basis points at 4.53%. World markets heading sharply lower in the Far East on the back of Trump Tariffs and London set to open down around 127 points as at 6.30am.

RETAIL WITH NICK BUBB:

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