DOM, ROO, Caffe Nero, Harveys, confidence, interest rates & other:

PREMIUM EMAIL – PLEASE DO NOT FORWARD:

A DAY IN THE LIFE:

We waffled on a bit yesterday about plants and animals and, today, we thought we’d drill down into the animal kingdom, specifically we mammals.

Because we all know that elephants are big, whales are bigger still and rats and rabbits are common, so it’s perhaps a bit surprising to hear that humans make up almost half of the biomass of all mammals with our domesticated animals all but about 4% of everything else.

So wild mammals, massive whales, elephants, those 56 billion bats and 25 billion rodents, make up only 4% of the biomass of all mammals and, despite all that sound and fury, an infinitesimally small percentage of all biomass in the world as a whole.

On to the news:

PUBS & RESTAURANTS:

Interest rates:

The Bank of England’s Monetary Policy Committee yesterday voted by a majority of 7–2 to maintain Bank Rate at 4%. It adds that ‘two members voted to reduce Bank Rate by 0.25 percentage points, to 3.75%….’

• The Bank adds that its ‘Committee voted by a majority of 7–2 to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £70 billion over the next 12 months, to a total of £488 billion.’ Quantitative tightening, as this process is known, has the impact of issuing bonds into the market and thus it puts upward pressure on interest rates.

• Re prices, the Bank says ‘there has been substantial disinflation over the past two and a half years, following previous external shocks, supported by the restrictive stance of monetary policy.’ It says that ‘underlying disinflation has generally continued, although with greater progress in easing wage pressures than prices.’

• CPI is currently 3.8% and looks set to hit 4.0% shortly, twice the target rate that the Bank has been set. It says it ‘remains alert to the risk that this temporary increase in inflation could put additional upward pressure on the wage and price-setting process. Pay growth remains elevated, but has fallen and is expected to slow significantly over the rest of the year.’

• The CBI comments that the ‘decision to hold interest rates came as no surprise. The bigger question is how the Monetary Policy Committee will move in the months ahead. While there is broad agreement that rates should fall further, opinions differ on how quickly and by how much.’ The situation is finely balanced. The CBI says ‘further cuts are supported by a weakening jobs market and signs of slower wage growth. But the MPC remains wary of stubborn price pressures. The risk is that the expected inflation “hump” this Autumn feeds into wages and price setting, at a time when households’ inflation expectations are rising.’

Consumer confidence:

GfK has updated on UK consumer confidence saying that its composite number fell to minus 19 in September, down 2 points on the August figure. It asks ‘will the widely expected November tax rises push confidence lower?’ GfK reports that all measures were down in comparison to last month’s announcement….

• Neil Bellamy, Consumer Insights Director at GfK, says ‘there’s an autumnal chill in the air this month, with all five measures of consumer confidence down and the Overall Index Score for September slipping two points from minus 17 to minus 19.’

• He adds that ‘the August 7th decrease in interest rates does not appear to have provided any obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues’ and adds that ‘both personal finance measures – past and future – are lower, while our major purchases measure has dropped three points to minus 16.’

• Regarding the outlook, he says that ‘sentiment is sliding sharply’. He says ‘in June 2024 our forward-looking measure stood at minus 11, but just 15 months later it has slumped to minus 32.’

Food delivery: Uber UK comments on the food delivery market:

In its recently submitted accounts to Companies House, Uber UK comments on the UK food delivery market saying that ‘the Delivery industry in the UK is highly competitive, with well-established and low-cost alternatives.’ It adds ‘in the future we expect to face competition from new market entrants….’

• The company comments on courier and restaurant retention saying ‘couriers have a propensity to switch to the platform with the highest earnings potential, restaurants and other merchants have a propensity to shift to the platform that offers the lowest service fee for their meals and goods, and consumers have a propensity to shift to the lowest-cost or highest quality provider.’

• The company says ‘whilst Uber as a whole works to introduce new products and offerings, many of our competitors remain focused on a limited number of products, allowing them to develop specialised offerings. As existing products evolve, we expect to become subject to additional competition.’

• Uber makes a good point here as, to some extent, newer entrants could benefit from ‘second mover advantage’. They may be able to cherry-pick geographies, delivery product type and even consume base. Uber says ‘our competitors may adopt certain product features from us, or adopt innovations that consumers, merchants and couriers value more highly than our platform, which could render our products less attractive.’

• It concludes that ‘increased competition could result in, among other things, a reduction of the revenue we generate from the use of our platform, the number of platform users, frequency of use of our platform, and our margins.’

DOMINO’S – MORE ON CFO CHANGE, STRATEGY ETC.:

The note below went out to clients yesterday morning.

Domino’s Pizza Group has this morning announced that CFO Edward Jamieson will leave the board today, Andrew Andrea, currently at C&C, will join in March next year.

Today’s update:

• Group reports that current C&C CFO Andrew Andrea ‘has been appointed as Chief Financial Officer’ and will join DOM on 16 March 2026 after serving his notice period.

• Thereafter, the company announces that ‘Edward Jamieson, our current CFO, is leaving the Company by mutual agreement.’

• It says ‘he will step down from the Board today’ but adds that he ‘has played a key role in developing a new strategy, completing multiple transactions, and significantly growing its share of the UK pizza market.’

Inbound CFO

• DOM reports that Andrew Andrea, who has served as both CFO and CEO of Marston’s and CFO of C&C ‘is a proven FTSE CFO with highly relevant sector experience.’

• DOM points out that Mr Andrea ‘has extensive experience of M&A and of operating in franchise models at both Marstons and…the optician chain Dollond & Aitchison.

• Chair Ian Bull says Mr Andrea ‘has an exceptional track record as a CFO in the hospitality sector and knows how to operate in franchise environments.’

Interregnum:

• DOM reports that ‘until Andrew joins next March, Richard Snow will take over as interim CFO with immediate effect. Richard has previously held CFO roles at Ladbrokes and Cavendish Corporate Finance, and for the past year has worked with DPG on strategic projects.’

Corporate change, strategic issues:

• DOM announces that ‘Lynn Fordham, current Senior Independent Director, is taking on the newly-created role of Special Adviser to the Board as the business embarks upon a period of accelerated activity.’

• Chair Ian Bull refers to ‘the next phase of DPG’s growth.’ He says of the incoming CFO ‘his experience will prove invaluable as we accelerate delivery of our growth strategy.’

• The chair says ‘this is an exciting time for Domino’s, as we execute our strategy, further increase market share and launch new initiatives such as our chicken sub brand Chick N Dip.’

Trading:

• The company says ‘we continue to expect FY25 Underlying EBITDA to be in the range of £130m to £140m, unchanged from our interim results on 5 August 2025.’

• Chair Ian Bull says ‘while our market remains challenging, we have a clear strategy and a world-class CEO, leadership team and franchisee base to deliver it.’

Langton Comment:

• In the wake of the group’s profit warning that accompanied its H1 numbers in August, DOM’s shares have performed poorly.

• Whilst unpicking the reasons behind and implications of a resignation can be difficult (or impossible), there will be a number of observers examining the tea-leaves in order to formulate opinions as to future strategies.

• Today the company has reassured that trading expectations remain unchanged from those communicated on 5 August.

• The company has seen earnings move backwards in recent years and, though the dividend has been raised, the shares have similarly been week. Shareholders appear to have been somewhat underwhelmed.

• A drop in LFL sales in Q1 accelerated into Q2 but, as there is no new trading news today, this should have been taken on board by investors.

• Comps should soften and Chick n Dip may provide a further avenue for growth. The acquisition of the 12.1% stake in DP Poland could be interesting moving forward.

• DOM’s capital light structure has some appeal and a chunky (and possibly chunkier) dividend may be a feature of such a business model. The sub-franchised model goes some way to supporting the valuation.

COMPANY NEWS:

Deliveroo plc reported yesterday that, despite his denials earlier in the year, ‘Will Shu, Founder and Chief Executive Officer has decided to step down as CEO once the scheme in relation to the offer from DoorDash, Inc. becomes effective.’ Mr Shu says he has ‘decided at now is the right time for me to step down.’ He adds that ‘the Company’s growth and profitability are accelerating and we are delivering on our mission to transform the way people shop and eat…’

• Mr Shu says he wants to ‘contemplate my next challenge.’ Claudia Arney, Chair of Deliveroo, says ‘Deliveroo is entering a new era as part of the enlarged DoorDash Group, with exciting opportunities ahead.’ In February this year, the company said of Mr Shu ‘Will remains relentlessly focused on the long term future of Deliveroo and delivering for consumers, merchants and riders.’

• The company confirms that ‘the acquisition of Deliveroo by DoorDash, Inc. continues to progress as anticipated. The court hearing to sanction the Scheme is expected to take place on 30 September 2025. The Scheme is expected to become effective on 2 October 2025.’

Time Out Group plc has announced that its Time Out Market Budapest opens to the public tomorrow, Saturday, 20 September. It says this is the first Time Out Market to open in Central & Eastern Europe and is the Company’s twelfth food and cultural market and sixth Management Agreement….

• The company reports that there are ‘a further four Management Agreements signed and one Owned & Operated site (New York Union Square, set to open on 26 September 2025), with more in advanced negotiations.’

The Caffè Nero Group has updated on trading saying that it generated ‘record sales of £626.4m ($845m) for the financial year ending 31th May 2025. It says it ‘delivered like for like sales growth of 7%, with overall sales up by 12%….’

• Caffe Nero adds ‘in a year when the coffee category has been lacklustre for much of the industry, The Caffè Nero Group has thrived, gaining market share across all territories. During the year, the Group added 94 stores, opening 62 new stores and adding 32 stores through the acquisition of the 200 Degrees and FCB brands in the UK.’

• It adds that, in the UK, it ‘achieved like for like sales of 7% and grew overall sales by 10%. The Group anticipates opening at least 75 new stores in the coming year.’

• CEO Gerry Ford says he is ‘hugely encouraged by the group’s performance during the last financial year.’ Mr Ford adds ‘despite tough trading conditions and a challenging financial climate, we have continued to outperform the market and have grown our customer numbers.’ He concludes ‘we enter the current financial year with strong momentum and have set ourselves up well for another successful year.’

Harvey & Son (Lewes) Limited, which was founded in 1790 and which brews and owns pubs in the East Sussex area, has reported results to end-December 2024 to Companies’ House saying that revenue rose by 2.9% to £25.0m with gross profit up to £7.1m from £6.6m in the prior year. Operating profit rose by 23.4% to £3.9m and, as interest receivable and other finance income rose, PBT was up by 25.6% at £4.2m (FY23: £3.4m)…

• Harvey’s has £38m of freehold properties at written down value. They were revalued at end-2021. The company has £9.5m of cash (FY23: £9.9m) and no debt. The company says ‘with substantial cash reserves the Company is in very sound position and can recommend an increase in share dividend to reflect this buoyant position.’

• It says its ‘beer production volumes have not grown as extensively but compared to other traditional brewers barrelage has held up well.’ It adds that ‘most of the Company’s growth has been due to factored trade activity in wine and other beers.’ Harvey’s reports that ‘further turnover has been achieved from the development of managed pubs and sound rental income.

• Harvey’s reports that ‘after several years of planning activity the company finally completed the development of a large and historic public house site in Newhaven. The pub reopened in July 2024 and the site now includes seven self-contained flats, separately let.’

The Carlton Club has reported results to 31 Dec 24 to Companies’ House saying that income rose slightly to £5.29m (FY23: £5.12m). The operating loss was £120k (FY23: operating profit £68k) but fair value movements and interest received took the result to a PBT of £80k (FY23: £273k)….

• The company reported that it extended its terrace by adding a heated glass veranda during the year under review. It says the ‘new structure has allowed us to fully utilise all seating areas.’

• It says it ‘received a £90K rebate for 2024/25 through government business rates relief for the retail, hospitality, and leisure sectors. However, revenue from functions declined due to the cancellation of political events following political changes in 2024.’ It says that ‘additionally, rising costs for electricity, gas, laundry, and repairs contributed to a trading deficit of £120k. Despite this, membership numbers remain strong.’

Speaking on a podcast with Davina McColl, celebrity chef Jamie Oliver says his restaurant empire went bankrupt because he didn’t get the basics right and was ‘conceptually thick’. The 2019 collapse cost 1,000 jobs and led to the closure of 22 of the then 25 sites.

Keurig Dr Pepper, which is in the process of acquiring JD Peet’s, has announced a new leadership for its US coffee business. The company has promoted Olivier Lemire to President, US Coffee, succeeding Patrick Minogue.

HOLIDAYS & LEISURE TRAVEL:

CoStar reports that the US hotel industry reported mostly negative year-over-year comparisons in the week to 13 September. It reports occupancy down 1.8pps at 65.4% but ADR up 0.1% at US$162.71. REVPAR was down 1.7% at US$106.43.

FINANCE & MARKETS:

Sterling down at $1.3542 and €1.1506. Oil lower at $67.32. UK 10 year gilt yield up 4 basis points at 4.66%. World markets mostly better yesterday but the Far East lower in Friday trading. London set to open four points higher as at 6.30am.

RETAIL WITH NICK BUBB:

• The Planet ONS Watch: Unaccountably, City economists continue to treat the clearly unreliable and frequently revised monthly Retail Sales figures from “the Planet ONS” as the definitive guide to High Street spending trends, but we remain a consistent critic of the quality of the Retail Sales figures on ‘the Planet ONS’, so let’s see what today’s figures from the beleaguered Office of National Statistics (ONS) for August (the 4 weeks to Aug 30th) reveal…The City expected a modest 0.4% increase in month-on-month seasonally adjusted sales volumes, so the 0.5% increase should please the economists, but we are disappointed that the bizarre Food Retail sales figures have gone from bad to worse…The non-seasonally adjusted value figures on the Planet ONS show that August sales were up 2.5%, with ONS Food Retailer sales down by 0.3% (which is silly/much too low), ONS Non-Food Retailer sales
up by 4.1% (which looks over-stated) and ONS Non-Store/Online sales up by 7.2%.

• Consumer Confidence Watch: Turning to a forward-looking indicator, the widely followed monthly GFK Consumer Confidence survey came out overnight and the September index dipped from -17 to -19 (City economists had expected it to dip to -18). Interviewing with the c2000 adults in the survey was, as usual, conducted in the first half of the month, between Sept 1st and Sept 11th. Neil Bellamy, Consumer Insights Director at GfK, said that “There’s an autumnal chill in the air this month, with all five measures of consumer confidence down…The August 7th decrease in interest rates does not appear to have provided any obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues…With tax rises expected in the November Budget, the risk is that confidence inevitably falls, just like the autumn leaves”.

• Grocery Sales Watch: The latest monthly grocery sales figures from ‘Kantar’ Worldpanel’s great rival, NIQ (formerly known as Nielsen), came out at 8am yesterday morning and their overview (for the 4 weeks to Sept 6th) was headlined “Total Till sales rise as UK shoppers return to routine with back to school and look ahead to Christmas”, flagging that monthly top line sales growth picked up from 3.7% in the previous 4 weeks to 4.1% (a bit less than the 4.8% sales growth reported by Worldpanel yesterday for much the same period). In terms of retailer performance over the last 12 weeks, NielsenIQ highlighted that Lidl (+11.4%) and Ocado (+14.3%) continue to lead the growth, with Marks & Spencer also growing (+8.5%). In the last 4 weeks, one in four shoppers visited Marks & Spencer, a +11.9% growth in shoppers on last year, ‘enticed by the new seasonal food ranges, new store
openings and social media engagement’. Sainsbury’s (+5.6%) and Tesco (+5.0%) also both gained market share, with Waitrose (+4.6%) ‘maintaining momentum throughout the summer’, whilst Aldi was up 5.2%. Morrisons was +1.1% and Asda was -3.2%. Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, noted that “Following the hottest summer on record, which encouraged spending and sustained food and drink sales, the industry now faces the challenge of navigating higher inflation. One in three households currently identify the cost of living as their top concern, up from 22% in March, while nearly two-thirds of shoppers report being moderately or severely affected by rising costs, compared with 56% a few months ago”.

• Today’s News: The Boohoo AGM is being held at noon today in Manchester.

• Yesterday’s News: Just after we went to print yesterday, at 8.19am to be precise, Pets at Home issued another profit warning, lowering full-year adjusted PBT guidance to £90m-100m (the Q1 update on July 31st had lowered the guidance from £115m-125m to £110m-120m, vs a flat £133m in y/e March 2025). The reason given was weaker than expected Retail LFL sales and the pet market (store sales have declined by 5% in the year to date), so it is not clear why the CEO Lyssa McGowan was given the push, with immediate effect (with the non-executive Chairman Ian Burke taking over on an interim basis). Nor is it clear why the company was still buying its shares back until the day before, given the inevitable slump in the share price… And at 10am yesterday Deliveroo announced that the Founder and CEO Will Shu will step down once the DoorDash takeover scheme becomes effective, on October 2nd.

• Today’s Press: According to the invaluable Guardian press email summary of the front-page headlines of today’s papers, the main story in the Guardian itself today is “Use the military to stop Channel crossings, Trump tells Starmer”. The i has “Trump urges Starmer: use military to stop migrant boats”, while the Financial Times says “‘Call out the military’ to stop illegal immigrants, Trump urges Starmer”. The Telegraph quotes Trump with “‘Send in military to stop boats’” and the Sun has “Use troops to stop boats”. The Times reports “Immigration is destroying UK, Trump tells Starmer”. The Mail says “Trump shows PM who’s boss”, while the Mirror simply leads with “Thank goodness that’s over”.
• News Flow Next Week: Next week brings two more big interim results from Non-Food retailers: the Kingfisher interims on Tuesday and the JD Sports interims on Wednesday. Wednesday also brings the Frasers AGM, with the DFS finals and the H&M Q3 results on Thursday.