BrewDog, Campari, Entain, food inflation, disposable incomes & other:

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A DAY IN THE LIFE:

We had to leave the dog on her own for longer than usual the other day and I feel that I should invest in one of those dog-cams.

Because I’m pretty sure that she spends the first few hours on her own behaving like Macaulay Culkin in Home Alone and then the next little while growing increasingly anxious and ever-more likely to chew lumps out of the furniture.

We haven’t quite got to that stage but there’s plenty of evidence to suggest that she’s been able to push open doors, circumvented dog-gates and spend a few leisurely hours stretched out on the settee, shedding vast quantities of hair while, presumably, fiddling with the TV remote and becoming more and more interested in any cupboard that smells of food.

Still, her hearing’s good enough that she’s always off the furniture and by the door by the time we turn the key.

So we’ve yet to actually see any of the above and the ‘butter-wouldn’t-melt’ act would have it that it never really happened at all. On to the news:

PUBS & RESTAURANTS:

Food & drink prices:

The latest Foodservice Price Index from NIQ and Prestige Purchasing reports that food & drink prices rose by a very marginal 0.02% in the month of January. NIQ reports that ‘the deceleration brings welcome stability for operators following a sharp festive surge in prices in December. Prices fell in the oils & fats category and ‘there was also a slight easing in the bread & cereals category and a complete flattening of price movement in meat & poultry, as demand cooled after Christmas and global supply balanced…’

• NIQ reports that ‘the extreme inflationary pressures that affected the sugar, jam, syrups & chocolate and coffee, tea & cocoa categories throughout 2024 and 2025 have started to ease. Global cocoa futures have dropped to multi-year lows, driven by improved West African harvests and rising global stocks. While it will take time for this raw commodity deflation to fully filter through to processed products, the downward correction marks a significant turning point for the sector.’

• Prices in the shops, as we have noted previously, tend to ‘rise like a rocket and fall like a feather’. It was widely reported that chocolate prices, for example, had risen sharply on the back of higher commodity prices but, as commodity prices are now at ‘multi-year lows’ (per NIQ), it will be interesting to see how rapidly retail prices drop.

• NIQ does note that ‘seasonal and structural challenges pushed fresh produce prices higher in January, with fruit affected by high energy costs for glasshouse-grown berries in Europe and a 30% drop in Spanish lemon volumes.’

• Shaun Allen, CEO of Prestige Purchasing, comments ‘seeing month-on-month inflation flatten to just 0.02% in January is a highly encouraging start to 2026. The unwinding of the cocoa crisis and the sharp drops in oils & fats provide much-needed breathing room for the hospitality sector after a punishing December.’

• And Reuben Pullan at NIQ comments ‘after relentless inflationary pressures in 2025, hospitality operators will have been relieved to see pricing stabilise in many areas of food and drink in January. Nevertheless, the market remains vulnerable to micro pressures in supply. With other key costs like labour and taxation so high, there is no room for complacency on pricing and businesses will have to be braced for more volatility in 2026.’

Cost of living, inflation, disposable incomes:

The RAC has noted that fuel prices are now rising following the outbreak of hostilities in the Middle East. Head of policy Simon Williams says ‘the average price of petrol has increased by nearly 2.5p a litre since Saturday and diesel by more than 3p on the back of oil surging above $81 a barrel – a price not seen since January last year.’ And it is possible that the energy price cap, which has just dropped marginally, could rise by 10% this summer as a result of the surge in gas prices this week…

• Cornwall Insight estimates that the average energy bill could rise to £1,801 per year for a typical dual‑fuel household. That represents an increase of £160 or 10% on April’s cap announced last week. Cornwall says ‘looking at the April cap, the role of wholesale prices as a determinant of bills had eased given the impacts of policy costs and network costs.’

• It notes that ‘while the rise is eye‑catching, any immediate concern should be tempered. We are still early in the assessment period for the July cap, and what happens in the energy markets over the next three months will be the key factor, rather than this spike alone.’

UK service sector:

S&P has produced its latest PMI for the UK services sector. As this is a blended mix of B2B and B2C businesses, where performance can vary markedly, the bald figures need to be interpreted with caution. Nonetheless, S&P notes that ‘service providers recorded a further upturn in business activity during February, which was supported by gradually improving demand.’ it says that its measure slipped marginally to 53.9 in February, down from January’s five-month high of 54.0…

• S&P notes that ‘there were nonetheless reports of challenging market conditions for clients in areas such as leisure, hospitality and construction.’ B2B had a better time of it with S&P saying that ‘service providers indicated an upturn in overall new work for the third successive month in February.’

• Tim Moore, Economics Director at S&P Global Market Intelligence, says ‘business activity continued to pick up across the UK service economy in February.’ Service business intake has picked up (largely for B2B companies).

• However, S&P says ‘February data pointed to a solid reduction in employment numbers, despite a sustained recovery in business activity.’ It adds that ‘higher payroll costs were widely cited as leading to a strong pace of overall input cost inflation.’ It says there was ‘robust increase in prices charged by service providers, with the pace of inflation little-changed from January’s five-month high.’

Other news:

UKH Scotland has called on the Scottish Government to use almost £1bn in additional funding to expand support for hospitality businesses.

COMPANY NEWS:

BrewDog. Multi-millionaire former BrewDog CEO James Watt has written on LinkedIn that he is ‘heartbroken for all of the hard working and passionate team members who have lost their jobs.’ He says he is similarly ‘heartbroken for all of our brilliant equity punks who did not get the return on their investment they wanted….’

• He says that he ‘dedicated the best 20 years of my life to something that ultimately did not have the ending we all wished for.’ He says there are ‘so many other things I would have done differently.’ He says ‘at times we expanded too fast and diversified too broadly’ and he sometimes ‘did not control spend well enough.’ He says that there were ‘highs, lows, successes, failures, huge gambles and many mistakes along the way’ but ‘ultimately, the mistakes hurt far more than the successes console.’

• Everyone has a perspective and, although it is easier to criticise than to manage, union Unite suggests that the jobs and equity capital were lost as a result of years of mismanagement. One LinkedIn user commented on the post saying that Watt had “walked away with £50m from the TSG deal, while everyone who gave you their money is now left with nothing but the taste of sour beer in their mouths”.

Campari yesterday reported 2.4% Organic Revenue Growth in 2025 amid what it said was a tough spirits market. The company reported net sales of €3.05bn, in line with estimates. It reported that adjusted operating profit was up 5.4% and says ‘looking forward into 2026, on an organic basis, we expect continued pace of underlying topline growth and improvement in profitability….’

• EBITDA on an adjusted basis was €785 million and group net profit came in at €346 million, +71.7%. The company reports that diluted earnings per share was €0.32, +2.7%. The company says that it is proposing a full year dividend of €0.100 per share, +54% compared to the previous year.

• CEO Simon Hunt says ‘in 2025, we navigated complexity with resilience and delivered solid organic growth in both topline and profitability while sharpening our strategic direction. Our team of Camparistas ensured our brands outperformed and gained market share in nearly all markets globally with growth across 24 countries and all of our brand houses.’

• The CEO says that ‘strong business momentum and accelerated deleverage one year ahead of plan allowed us to step-up our dividend payout to further enhance shareholder returns, while we retain our financial flexibility. Looking forward into 2026, on an organic basis, we expect continued pace of underlying topline growth and improvement in profitability.’

• Mr Hunt adds that ‘guided by our mission of winning the first, shared drink, every day, everywhere, we remain fully confident in delivering long-term margin accretive and cash generative growth focused on new formats for new occasions, fewer bigger bets and accelerated geographic expansion while we ensure continuous balance sheet discipline.’

China’s Luckin Coffee’s controlling shareholder, Centurium Capital, is reported by Bloomberg to be in advanced talks with Nestlé to acquire Blue Bottle Coffee…

• Nestlé acquired a majority stake in Blue Bottle for US$425 million, valuing the business at more than US$700 million. Rumours of a sale have been circulating since last year. Blue Bottle Coffee has 78 locations in the US and 100 sites in total including those in Asia.

Just Eat Takeaway.com has announced that, ‘after careful consideration, we are announcing our intention to close our operations in Denmark.’ It says that ‘while Just Eat has a proud 25 year history in Denmark, it has been navigating challenging circumstances.’

Southern Wind Group, which trades as Brazilian restaurant chain Fazenda Bar & Grill, has reported numbers to 31 Dec 2025 saying that revenues rose by 38% to £28.8m. The gross profit margin rose to 68.1% (from 66.8%) to give gross profits in absolute terms of £19.6m….

• Admin costs rose by 52% to £17.8m but operating profits, due to the higher GP, rose to a positive £1.99m (from an operating loss of £35k in the prior year). PBT, due to a small amount of interest received, rose to £2.01m from a loss of £297k in FY24. Accumulated profits swung to a positive £1.3m from an accumulated loss of £238k as at end-December 2024. Shareholders’ funds were £5.4m against £3.9m in the prior year…

• Fazenda reports that it was ‘founded in 2010 and was established as the premier Brazilian style steakhouse of the UK.’ It says its ‘aim is to continue to provide the highest quality service to ensure its guests enjoy a unique dining experience.’

• Re trading, the company reports ‘despite ongoing challenges across the hospitality sector, including cost inflation and competitive pressures, the Company maintained a strong market position during the year.’

• It reports that ‘management continued to focus on operational discipline, pricing strategy and the overall guest experience, providing a stable platform for performance during the period and supporting a stable foundation for future growth.’

• Re the future, the ‘Board remains confident in the Company’s long-term prospects, underpinned by the strength of the brand, its unique appeal and established market positioning.’ It says it ‘continues to monitor opportunities for selective expansion and will pursue such opportunities where suitable sites become available and where they align with strategic objectives, operational capacity and disciplined capital investment criteria, supporting sustainable growth and an enhanced market presence.’

HOLIDAYS & LEISURE TRAVEL:

Commercial director of the Business Travel Association, Andrew Clarke, has said that plans to expand a tourism tax across the UK will cost businesses – in his case those sending business travellers to cities – at a time when they can least afford to pay additional costs…

• Manchester, Bournemouth, Poole and Christchurch are amongst the towns and cities that already levy a charge and taxes are planned for London, Edinburgh and Glasgow.

Flights cancelled due to the conflict in the Middle East now total around 23,000. Emirates, the world’s largest international airline, is amongst the worst-hit. It has extended its suspension of flights to Dubai through the end of Saturday, implying a full week of missed flights…

• In addition to the thousands of passengers that have been stranded in the Gulf region, many others will have had to change flight plans in order to avoid the region’s airspace.

Online travel agent Loveholidays reported set to delay its proposed London Stock Exchange flotation as a result of the market turmoil and travel chaos caused by war in the Middle East.

OTHER LEISURE:

Entain has reported Q4 and full year 2025 numbers saying that Total Group Net Gaming Revenue, including the company’s 50% share of BetMGM2 was up +7%. It says that FY25 Group Underlying EBITDA was of £1,160m, up +8% and ‘ahead of guidance’. Entain adds that its statutory loss after tax of £681m includes an impairment charge related to UK Gambling tax increases. Re the outlook, Entain says it ‘expects FY26 Online NGR (exc. US) growth of 5-7% on a constant currency basis.’ It ‘remains comfortable with market expectations for FY26 Group Underlying EBITDA…’

• Entain adds that it ‘upgrading expectations’ now suggest that it can ‘offset over 50% of the incremental UK tax burden from 2027.’ The company is ‘reaffirming [its] confidence in generating at least £500m of annual adjusted cashflow from 2028.’

• CEO Stella David says ‘2025 has been a successful year for Entain.’ She adds ‘we are continuing to drive strong underlying momentum and I am immensely proud of our strategic and operational  progress and the results it is delivering.’

• Ms David says ‘Entain’s diverse and globally scaled portfolio of podium positions, is more important than ever to ensure we are a long-term winner in our industry. The business has never been in better shape and is well positioned to not only navigate the tax and regulatory challenges facing our industry, but to seize them as opportunities.’

• The CEO concludes she is ‘am excited about the future as we evolve our strategic priorities, accelerate our performance, and maintain our focus on sustainable growth and cash generation.’ She says she is ‘confident in Entain’s ability to deliver at least £500m of annual adjusted cashflow from 2028.’

Sky News’s Mark Kleinman reports that ‘the gambling regulator risks being plunged into a row over conflicts of interest after admitting that its chief executive has drawn up plans to take a commercial role within the sector when he steps down next month….’

• Sky News ‘understands that Andrew Rhodes, whose departure as CEO of the Gambling Commission was announced last month, has been in talks about a role at Hawkbridge, a new advisory firm focused on the industry.’ A spokesman at the regulator declined to comment on the identity of Mr Rhodes’s new employer but insisted ‘Andrew has told us he is going to work within the wider sector and has been open with us about his plans.’ He has ‘stepped back from any duties which might present risks of a conflict of interest.’

GB News, which is jointly-owned by hedge fund manager Sir Paul Marshall and Dubai-based investment firm Legatum, has reported numbers to 31 May 2025 to Companies’ House revealing that it lost £29.8m before tax in the year. Accumulated losses since incorporation in 2019 totalled £149.7m as at its last balance sheet date…

• GB News reports revenues up by 58% at £26.2m. Operating losses were reduced by around a quarter to £26.6m and the loss before tax was cut by 17% to £29.8m. The company has lost £149.7m since incorporation and now has negative net worth of £27.5m (FY24: negative £121k).

• Re the Going Concern principle, which the company has adopted, GB News says, as it is loss-making, it is ‘dependent upon the contributions received from its investors’. It says it has ‘strong support from its investors and the Directors have no reason to believe that the level of these contributions might vary to a significant degree or not be forthcoming as required.’

• The directors say they have issued SAFEs (Simple Agreement for Future Equity) ‘after the year-end to replace the convertible debt.’ They add that ‘investors have confirmed they will provide funding which the directors believe will be sufficient to cover any expected deficit.’ The Auditor, Buzzacott LLP, has signed off on the adoption of the Going Concern principle, dated 24 Feb 2026.

• GB News says its aim is ‘to champion robust, balanced debate and to provide a range of perspectives on the issues that affect everyone in the UK’. It says ‘with television audience share up 53% and radio audience share up 61% year-on-year’ and with strong growth in its digital operations, the ‘encouraging usage data is highly supportive of the group’s stated ambition of becoming the UK’s largest news channel by 2028.’

FINANCE & MARKETS:

S&P has reported its composite PMI for the UK economy in February saying that ‘UK private sector output growth was unchanged from January’s 17-month high.’ Its measure ‘registered 53.7 in February, to signal a further solid expansion of business activity across the private sector economy. This marked ten months of sustained growth.’

US Treasury Secretary Scott Bessent has said that the US is ‘likely’ to implement a 15% global tariff this week.

China has cut its economic growth target to a range of 4.5%-5%, the lowest target since 1991.

Sterling slightly lower at $1.3312 and €1.1486. Oil up again at $84.19. UK 10 year gilt yield down 7 basis points at 4.45%. World markets better on a bounce yesterday but London set to open down around 9 points as at 6.30am.

RETAIL WITH NICK BUBB:

• Grocery Sales Watch (Part 2): 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 4/12 weeks to Feb 21st) was headlined “Shoppers turn to private label and dine-in deals during event-filled February to manage spend”, flagging that monthly top line sales growth fell back from 4.1% in January to 3.3% in the 4 weeks (very similar to the 3.4% sales growth reported by Worldpanel on Tuesday for much the same period). In terms of retailer performance over the last 12 weeks, NIQ highlighted that Ocado (+14.4%) retained its position as the fastest-growing retailer. Lidl (+9.9%) again led the growth among store-based retailers. Sainsbury’s was +5.7%, Waitrose was +6.1%, Tesco was +4.0%, M&S was +6.5%, Aldi was only +2.5% and Morrisons was +2.6%. Sales at Asda were -4.0%
and the Co-op was -0.6%. Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, noted that “Many retailers focused on attracting shoppers with a choice of dine-in deals to capture a bigger share of spend at out-of-home channels, with premium offers such as three courses for two people for £25 setting a new and attractive price point compared to eating out. In fact, there was a small increase in basket size in the last four weeks and whilst it is too soon to say if this is a turning point in shopper behaviour, these big events encouraged shoppers to spend more and it’s possible that some are bringing some spend forward to help manage budgets ahead of Easter”.

• Today’s News (1): The embattled WH Smith has issued a trading update (for the 26 weeks to 28 February), claiming a “Solid first half performance across the Group”, with total sales up 5% and LFL sales up 2%. UK Airports also saw LFL revenue up 2%, despite ‘temporary store closures across all Heathrow Airport terminals as we continue to invest in the quality of our UK store portfolio’. The refurbished Heathrow flagship stores are expected to open in April. In the key North America business, LFL revenue was up 1%, but performance was very mixed, with the Travel Essentials business in Airports seeing LFL revenue up 6%, but the InMotion business saw LFL revenue down 4% and the Resorts business saw LFL revenue down 6%, ‘largely driven by a continued reduction in Las Vegas visitor numbers’. Overall, however, “The Group has delivered a solid first half performance and is on track to deliver
Group guidance for the year”.

• Today’s News (2): The hyper-active Frasers announced at 5pm last night that it had edged up its ‘strategic’ stake in ASOS, from c26.8% to c27.6% (via derivative instruments). Over in Germany, the sportswear giant Adidas disappointed investors with its Q4/final results yesterday and its share price slumped by over 8% at first, although it closed only c3.6% down. The quarterly FTSE index review came out yesterday evening and there were no big changes for Retailers, as expected, although Rightmove survived in the FTSE 100, with Easyjet ejected instead. The Games Workshop EGM at 10am today will seek approval from shareholders for some dull technical changes. The Kroger Q4 results over in the US at lunchtime will interest shareholders in Ocado… And in sunny Haslemere, the 10,000 sq ft Waitrose store reopens today after a seven-week makeover.

• Today’s Press: The front-page headlines of today’s papers are still dominated by the widening crisis in the Middle East, according to the press summary email from the Guardian, and the Guardian itself leads with “At least 87 dead as US sinks Iranian ship near Sri Lanka”. “Warzone widens as US sub torpedoes warship off Sri Lanka” is the main story in the i. “Trump’s war goes global” says the Metro, while the FT runs with “US broadens war on Iran to high seas”. The Telegraph goes with “Miliband led revolt to Trump’s Iran war”, whilst “Labour ensnared in China spy probe” says the Daily Mail. “Allies round on ‘weak’ UK” is the main headline in the Times and “Weak, weak, weak!” screams the Daily Express (focusing on Kemi Badenoch’s critique of Keir Starmer during PMQs yesterday).