Feb Tracker, incomes, High St, Hostelworld, Shaftesbury, BK UK & other:

A DAY IN THE LIFE:

Road closures and contraflows are starting to do my head in.

I mean, whilst I don’t want high-viz wearing workers to be knocked down willy-nilly whilst simply doing their job, nor do I think it necessary to set up a contraflow, ‘delays likely’, to close one lane and protect what looked like a pile of storm fencing that was probably going to be used to section off a chunk of the road while somebody trimmed a hedge.

And it would appear I’m not alone.

Because the unmanned heap of junk that had been causing severe tailbacks on the A64 into Leeds only lasted a couple of days before somebody, probably a councillor or senior copper who used the road to get into work every day, got sick of it and ordered it removed.

Of course I may be cruelly demeaning the good intentions of somebody, somewhere.

And maybe it was changing a cast iron drain cover rather than trimming a hedge. And I wouldn’t want to be clipped by a speeding juggernaut’s wing mirror any more than the next man but please, give us a thought.

Anyway, got that off my chest so let’s move on to the news:

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PUBS & RESTAURANTS:

Likely responses to increased costs:

NIC costs will rise sharply from the end of this month due to both increased rates and the reduction of the threshold at which NIC (by the employer) is payable. This will increase labour cost, a line on the P&L that has moved, in recent years, from perhaps 25% of revenues in a managed house to nearer 30% or 32%. Depending on the number of part-time staff hired – and therefore the expected cost of NIC being introduced for the first time on part-timers (those earning >£5k), the upcoming NIC changes could add another point or maybe two to this cost line. Mitigation: Very few employers are likely to do absolutely nothing about this….

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Workforce:

The UK’s Largest Hospitality Salary Survey 2025, created by Hospitality Jobs UK and KAM Insights in partnership with the Access Group, has found that ‘happiness levels’ have fallen amongst hospitality employees as workforces have felt something of an economic squeeze. The survey adds that, in addition to mood, pay-packets are under pressure saying that ‘more hospitality workers are earning under £30k this year than they were last year with nearly half of all employees (46%) earning this amount – full-time and part-time – compared with 37% in 2024, and 30% in 2023…’

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WFH:

The push-me, pull-you between employees and employers continues with lawyer A&O Shearman telling junior staff that their bonuses may be affected if they do not hit office attendance minimum levels. The Times ran the story and A&O Shearman declined to comment.

Disposable incomes:

The Telegraph refreshes the idea that a supermarket price war has been kicked off by ASDA. This could boost disposable, post-essential-spending income, levels for consumers, in the short term at least…

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Demographics

The FT reports that UK first-time buyers with mortgages bought homes further out of London in 2023 compared with 10 years earlier. This, which comes as a result of the ‘affordability challenges of getting on the housing ladder in the capital.’ This, admittedly on the margin, will impact spending in London as Gen Z consumers continue to flood in whilst Millennials may leave the central postcodes in order to buy a property….

Hospitality insolvencies:

RSM has pointed out that hospitality insolvencies rose by 21% month-on-month in January 2025 compared with December last year. Whilst most of the increase is due to seasonal factors, numbers are up 3% on January last year…

Other news:

High street closures: Accountant PwC reports that around 35 shops a day closed permanently last year. This is down on 2023 and, due to re-openings, the net number will be much lower…

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Smoking. Academics at University College London have reported that smoking rates in parts of England have risen for the first time in almost 20 years.

Jobs & High Street: Santander is to close 95 branches in the UK. Some 750 jobs are at risk.

Price of a pint. The MA reports that ONS data shows that the cost of a pint of draught lager in pubs jumped almost 3% in the year to January 2025.

Wine industry. Drinks Business reports Armit Wines MD Brett Fleming as warning that there may be consolidation to come in the UK wine industry.

FEBRUARY SALES TRACKER:

The latest CGA RSM Hospitality Business Tracker has reported that the UK’s hospitality sector saw LFL sales rise by only 0.1% in February (vs Feb last year) after having dropped by 1.3% in January. The above followed growth of 3.2% in December which, it should be said, is a far bigger month for the trade. The Tracker reports ‘the figure is well below the current rate of inflation and continues a challenging start to 2025 for the sector.’ It adds that it ‘indicates that many consumers continue to remain watchful of their disposable income….’

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COMPANY NEWS:

Shepherd Neame. Key takeaways in the Press seem to have been the £2.6m p.a. cost of Budget changes (NIC and NLW) and the suggestion that the company would put up its prices in order to cover the changes.

St Austell Brewery is reported to have started a consultation process with employees that could lead to the redundancy of around 40 positions…

Shaftesbury Capital PLC confirmed that ‘it is in advanced discussions with Norges Bank Investment Management regarding a potential long-term partnership in relation to the Company’s Covent Garden portfolio, which was independently valued at £2.7 billion as at 31 December 2024.’ Today, Shaftesbury goes on to say that it can announce that the deal has gone ahead on the terms suggested overnigh. It says it will be retaining 75 per cent ownership and management control over the estate….

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Sky News reports that ‘the owner of Burger King’s main UK operation is opening talks with lenders about a major refinancing nearly eight years after buying the business.’ It says that Burger King UK, which is backed by the private equity firm Bridgepoint, is seeking an additional £40m of borrowing capacity to help finance the delivery of its business plan….’

WatchHouse CEO Roland Horne has told MCA’s Food to Go Conference that the company will push on with its international expansion plans, with two more corporate sites in New York, and a number of franchise stores lined up for the Middle East.

HOLIDAYS & LEISURE TRAVEL:

easyHotel reports that its Victoria site has undergone a £2 million refurbishment project. CEO Karim Malak says ‘easyHotel London Victoria has been part of our franchise network since 2007.’

Passport application fees are to rise from £88.50 to £94.50 for adults and from £57.50 to £61.50 for children on 10 April.

OTHER LEISURE:

Hostelworld has reported full year numbers to end-December saying that full year net bookings totalled 6.9m, an increase of 6% year on year (2023: 6.5m). it says that net revenue for the period was €92.0m, a decrease of 1% year on year (2023: €93.3m). Adjusted EBITDA was €21.8m, up 19% year on year (2023: €18.4m) and profit after tax was €9.1m, up 78% year on year (2023: €5.1m). Adjusted EPS is 13.97 cent, an increase of 41% year on year (2023: 9.91 cent). The company says it has returned to a net cash position with all bank debt repaid in full, two years ahead of schedule…

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Games Workshop ‘has today declared a dividend of £1.00 per share taking dividends declared so far in 2024/25 to £5.20 per share (2023/24: £4.20 per share).’ It says ‘this is in line with the Company’s policy to distribute truly surplus cash.’

FINANCE & MARKETS:

The Bank of England’s MPC will opine on UK interest rates & make its decision known at 12.00 today. Not sure how much notice they’ll take of it but The Times’ shadow monetary policy committee yesterday voted 6-3 in favour of keeping interest rates unchanged at 4.5 per cent…

The US Federal Reserve yesterday held interest rates at their current 4.25 – 4.50 per cent. It also reduced its estimate for US economic growth this year from 2.1 per cent to 1.7 per cent and from 2 per cent to 1.8 per cent next year.

Eurostat has reported that CPI in the Eurozone eased to 2.3% in February with core inflation at 2.6%, the lowest level since January 2022.

The Bank of Japan has commented on President Trump’s tariff plans saying ‘there have been rapid changes in the scope and speed of US tariffs. However, there are aspects we may not know even beyond April, so uncertainty remains high.’

Sterling higher at $1.2992 and €1.1929. Oil up at $71.24. UK 10 year gilt yield up 1bp at 4.65%. World markets mixed yesterday & London set to open down around 12 points as at 6.30am.

RETAIL WITH NICK BUBB:

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