SBUX, RCL, Playtech, Virgin Wines, closures, NIC, food prices & other:

A DAY IN THE LIFE:

Our dog went the wrong side of a tree the other day whilst on the lead and, if I hadn’t literally unwound the thing because I wanted to get home, I think she’d still be there.

Hungry, thirsty and soaking wet because, whilst she may show patience when waiting for a squirrel to foolishly descend from a tree and tenacity when it comes to working out where I’ve put her food, intelligence isn’t really her thing and, I thought, that’s a bit of a handicap when you factor in natural selection.

However, the ten-puppies-twice-a-year solution papers over a lot of these cracks.

It doesn’t do much for the longevity of any single individual – and nor does it explain why sheep, painfully dim, still exist – but, if the attrition rate is punishingly high, there will still be sufficient breeding material across the dog population, three-legged, one-eyed and tied to a tree though it may be, to keep the species going.

And, in the wild, throw in the fact that the most irredeemably stupid animals won’t live long enough to pop any offspring and I we needn’t worry about foxes, wolves, dingoes, coyotes and the rest becoming extinct any time soon.

Anyway, enough of that, on to the news:

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PUBS & RESTAURANTS:

Closures & openings:

CGA and Alix Partners have produced their latest Hospitality Market Monitor saying that there were ‘a total of 99,120 outlets operating in December 2024, compared to 99,113 in December 2023. It represents a year of solid consolidation after contraction in both 2022 and 2023, when the licensed sector shrunk by 4.5% and 2.9% respectively.’ The report notes that ‘the year-on-year comparison disguises substantial churn in hospitality, as many venues changed hands and some group-owned units switched to new trading formats. There were 4,078 closures and 4,085 openings over 2024—a turnover equivalent to 11 venues a day….’

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National Insurance Contributions:

BII CEO Steve Alton has written to the Chancellor asking that she postpone or scrap the upcoming changes proposed in NIC levels (and the salary starting level at which NIC is imposed). Mr Alton says ‘the impact of these devastating tax increases is already being seen in independent pubs, with widespread cuts to staffing, opening hours, and investment plans.’ He says ‘In a recent members’ survey, 80% of operators expect to be unprofitable due to the planned tax rises….’

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Sport:

Zonal reports that bookings for the Six Nations Rugby tournament are already up by nearly 40% compared to last year. The tournament kicks off at 8.15pm on Friday 31 January, when France plays Wales. Games continue until mid-March.

Food prices:

The British Retail Consortium’s shop index has suggested that food prices rose at their fastest rate in nine months in January. Although the rate is well down on that seen over the last couple of years, the BRC says that food prices rose 0.5 per cent month-on-month. The BRC says ‘this month’s figures showed early signs of what is to come.’ Whilst most of the increases will only come through in Q2, it says that ‘higher employer NICs, increased National Living Wage, and a new packaging levy mean that prices are expected to rise across the board…’

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Corporate activity:

The Morning Advertiser quotes work done by corporate finance advisory firm Oghma Partners as showing that M&A activity in the UK’s F&B sectors rose by 30% last year on the prior year. There were some 151 deals compared to 117 in 2023. The research suggests that Q3 2024 proved the most active period of the year with 59 transactions….

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Disposable income:

Whilst real wages are growing, the cost of certain essential goods and services are rising rapidly. In Scotland, Scottish Water has said that it will raise bills by 9.9% next year in order to invest in infrastructure.

Other news:

Wine exports from Austria are reported set to have fallen by around 5.1% 2024 on 2023.

Meanwhile, the Consorzio (Consortium) Tutela Prosecco DOC has announced a 7% rise in the number of bottles of Prosecco bottled last year vs 2-23.

COMPANY NEWS:

Starbucks Q1 numbers: Starbucks yesterday reported Q1 numbers saying that revenues were $9.4 Billion. This was ‘flat to prior year’ but SBUX says that it has a ‘clear path forward.’ The company reports EPS in the quarter of 69c. The company reports that, despite price rises, ‘global comparable store sales declined 4%, driven by a 6% decline in comparable transactions, partially offset by a 3% increase in average ticket…’

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Virgin Wines has updated on trading saying that sales over Christmas were ‘strong’. The company reports that ‘revenue increased by 6.7% year-on year during the 6 weeks to 27 December 2024.’ It adds that sales were ‘up 9% in December 2024 versus December 2023 to the highest level since the Covid-19 lockdowns.’ Virgin Wines says ‘we are pleased to have delivered a highly encouraging performance over the key Christmas trading period and generated positive momentum during the 6 weeks to 27 December 2024. This was underpinned by initiatives to grow the customer base and optimise customer acquisition, as well as strategic marketing and focused promotional activity. This resulted in a 25% year-on-year increase in new recruits during December….’

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Sky reports that high levels of a chemical by-product from chlorine disinfectants were found in some soft drinks, including Appletiser, Coca-Cola Original Taste, Coca-Cola Zero Sugar, Diet Coke and Sprite Zero. It says ‘there has been a “limited distribution to the UK” of Coca-Cola and other soft drinks that have been recalled over safety fears.’

Wasabi, a fuller look…

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The MCA reports that Private Equity company McWin Capital Partners may push for Gails, in which it is invested and where it may take a majority stake, to expand overseas….

Hotel Chocolat, which is now owned by Mars, has said that Christmas sales were 10% higher in December 2024 than they were a year earlier. CEO Angus Thirlwell says ‘this Christmas was our most successful to date.’ He says ‘despite consumers continuing to feel the pinch, they went for quality this Christmas and we posted strong sales.’

Vagabond, which is now owned by Majestic Wines, has also reported a strong Christmas with LFL sales up 16.3% in the six weeks to 23 December. Vagabond reports that food sales were up by 26.2%. MD Christobell Giles says ‘we took more Christmas party bookings than ever before in a challenging hospitality market.’ he adds ‘we’re taking strong trading momentum and exciting growth plans into 2025.’

Drink and luxury goods company LVMH (Louis Vuitton Moët Hennessy) has reported that it achieved a ‘solid performance despite an unfavourable global economic environment’ in calendar 2024. The company says that it generated revenue of some €84.7 billion with profit from recurring operations of €19.6 billion. The group says it saw an ‘acceleration in the fourth quarter, driven by Asia, the United States and Europe…’

HOLIDAYS, HOTELS & LEISURE TRAVEL:

Royal Caribbean Group yesterday reported FY numbers saying that it had had an ‘exceptional’ year. The company reports $16.5 billion in revenue and adjusted EBITDA of $6.0 billion. In Q4, revenue was $3.8 billion and adjusted EBITDA came in at $1.1 billion. For the current year, the company expects to see 23% adjusted earnings growth alongside 5% capacity growth.

Travel Weekly reports that the £1.53 billion purchase of the owner of Aberdeen, Glasgow and Southampton airports has been completed after receiving relevant regulatory approvals.

Gatwick Express services were suspended for a time yesterday as a result of a landslip south of the airport.

Virgin Voyages reports a ‘record-breaking’ January for cruise sales with revenue up 60% and booking numbers some 40% higher….

Celebrity Cruises is introducing a new product, Celebrity River Cruises, which will offer premium inland cruise vacations later this year.

Travel Weekly reports that TUI-owned Marella Cruises has started 2025 with “record-breaking” passenger numbers during the second weekend of January.

OTHER LEISURE:

Playtech plc has today reported that chairman ‘Brian Mattingley has informed the Board of his intention to step down as the Chair and from the Board. Brian will remain in situ for a few months in order to oversee the process to appoint a new Chair and ensure an orderly handover to his successor….’

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FINANCE & MARKETS:

PM Sir Keir Starmer has said that the UK economy is “turning around.” He reiterates that ‘the number one priority of this Labour government is growth: growth, growth, growth.’ He told Bloomberg TV ‘we have to get our economy working.’

Morgan Stanley has thrown its hat in the ring and says it expects the Bank of England to cut interest rates five times this year.

The CBI comments on yesterday’s speech made by the Chancellor Rachel Reeves saying that ‘it’s crunch time for growth and today the Chancellor has heeded business’ call to go further and faster.  This is most evident in Ministers grasping decisions that have sat on the desk of government for too long. This positive leadership and a clear vision to kickstart the economy and boost productivity is welcome.’

Sterling up marginally at $1.2450 and €1.1932. Oil lower at $77.36. UK 10 year gilt yield up 3 basis points at 4.62%. World markets better yesterday & London set to open up around 8 points as at 6.30am.

RETAIL WITH NICK BUBB:

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