Trading, incomes, High Street, growth, tourism taxes, Entain & other:

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A DAY IN THE LIFE:

I was once told that you can’t test something without measuring it and you can’t measure whatever it is without influencing the result.

And, on reflection, that may be true.

Because the Victorians, who reportedly knew a great deal about birds in the UK, gleaned a lot of their information by shooting the birds in question in order to have a very close look at them.

And, on the list of things guaranteed to change the outcome for the subject, then shooting it has to be pretty high up.

And elsewhere, that renowned tree-hugger Charles Darwin, solved a lot of his puzzles by killing things.

For example, he ‘solved’ for the appearance of various plants on remote islands by shooting birds, scraping the mud from their feet and then planting it to see what sort of plants subsequently germinated. Presumably he harvested their poo, as well, because that’s how most of our wild brambles, elderberry shrubs and blackcurrant bushes seem to spread but, all in all, it seems a bit hard on birds.

Anyway, on to the news:

PUBS & RESTAURANTS:

Trading:

NIQ has produced its Daily Drinks Tracker for each of the four weeks to 29 Aug, 5 Sep, 12 Sep and 19 Sep saying that drink sales were minus 9.7%, plus 7.6% (these two numbers influenced by the move in the August Bank Holiday from the first of the two weeks to the second), plus 2.5% and minus 1.9% respectively…

• In the first week, the week to 29 August, drink sales were down 9.7%. The Bank Holiday moved from this week in 2025 to the next week in 2026. Long drinks and soft drinks ‘outperformed’ at minus 5.4% for beer, minus 9.9% for cider and minus 5.9% for soft drinks whilst wine sales were down by 11.0% and spirits sales were some 27.4% lower.

• The week to 5 September benefited from the inclusion of the August Bank Holiday and drink sales rose b y 7.6%. Once again, long drinks and soft drinks outperformed, with beer up 8.4%, cider sales 13.3% higher and soft drink sales up by 11.9%. Wine sales were 2.9% higher and even spirits managed a nominal (but sub-inflation) rise of 0.8%.

• The week to 12 Sept was arguably more ‘normal’. Total drink sales rose by a sub-inflation 2.5% with beer up 5.7%, cider up 7.3% and soft drinks up 4.6%. Wine sales were good, up 6.0% but spirits sales reverted to trend and fell by 16.5% compared to the same week in 2025.

• The week to 19 Sept looks strange. Total drink sales, NIQ says, fell by 1.9% but, as only one of the categories, wine at minus 2.6% was in decline, this looks hard to rationalise. NIQ reports that beer seals were up by 0.9%, cider sales were up by 2.8%, spirits sales were up by an unusual 3.0% and soft drink sales were also 3.0% higher.

• Rachel Weller, NIQ’s commercial lead, UK & Ireland, says ‘a good start to September will have been a relief to On-Premise operators and beer, cider and soft drinks brands. It has helped to claw back some of the ground that was lost in August, when extreme heatwaves, a World Cup hangover and consumers’ watchful spending made for a difficult environment.’

• She says ‘nevertheless, conditions are likely to remain very challenging as we move towards the crucial final quarter of the year. A lot now hangs on the government’s Budget in October, which is a crucial opportunity to revive the confidence of consumers and hospitality alike.’

Disposable incomes:

The price of a litre of diesel is flirting with a new record high 200p. This will negatively impact disposable incomes and, with unleaded costing around 27p per litre less, the impact will also be felt elsewhere.

High Street:

Referring to the government’s intention to revitalise the High Street, PM Andy Burnham writes on X ‘we’ve all walked past them. The empty shop that’s been boarded up for years. The old cinema gathering dust. The building everyone says, “someone should do something about that.” Well, that’s exactly what I’m doing. We’re investing £210 million to help bring neglected high street buildings back into use…’

• He says the intention is ‘turning empty spaces into community hubs, health centres, shared workspaces, cafés and the local services that people actually want to see.’ Mr Burnham adds that ‘the funding will also help communities save spaces like pubs and sports clubs and support co-operatives so local people can share directly in their area’s success.’

• The PM writes ‘people don’t measure growth by looking at a spreadsheet. They measure it by looking at their local high street. That’s how we restore pride and bring hope back. Not by telling people things are getting better, but by giving them the power to see and feel the difference where they live.’

• Commenting on the PM’s words, Alex Reilley, chair of bar restaurant chain Loungers, writes ‘it’s depressing to say but £210m won’t even touch the side. The state can’t fix this alone (& you need to stop pretending you’re good at it) – partner with the private sector and turn £210m into £2.1b & then you can make a real difference.’

Economic growth:

The CBI’s Growth Indicator reports that the ‘growth outlook remains negative for the rest of 2026….’

• It says that ‘firms across the private sector expect activity to fall in the three months to December (weighted balance of minus 14%)’ and adds that ‘the latest results extend a period of negative predictions for growth that has persisted since late 2024.’

• Alpesh Paleja, CBI Deputy Chief Economist, comments ‘the outlook for growth remains subdued. The picture is mixed across sectors, particularly with some signs of resilience and even mild improvement in parts of manufacturing and professional services. But these are far outweighed by challenges weighing on conditions for all businesses. Cost pressures remain strong, especially around energy and employment and, coupled with weak demand, this continues to put pressure on margins, recruitment and investment plans.’

• He adds that ‘uncertainty ahead of next month’s Budget is also holding back activity in some sectors. Against the backdrop of renewed fiscal pressures, the Budget must draw a clear red line under any more rises in the cost of hiring, investing and doing business.’

• Turning to costs, he says ‘the Chancellor must focus on easing the cumulative burden of costs, as an entry point to spurring dynamism and activity. Removing legacy policy costs from business’ electricity bills, exploring options to reduce employer National Insurance Contributions, and committing to a clear path for business rates reform would be important first steps to building business confidence and putting the country back on a path to sustained growth.’

Budget lobbying:

The BII tells ‘the Prime Minister to back our pubs and they will deliver in every community.’ It says that a ‘fair tax deal would unlock investment and jobs, while further tax rises could put two in five pubs at risk of closure….’

• The BII urges a cut in VAT to 10% on pub sales. CEO Steve Alton says ‘our members are ready to invest. They want to develop their pubs, grow their teams and spend more with the local businesses that supply them. Give them a fair tax deal and that investment will reach communities across the UK.’

• But he says that ‘even after a strong summer for trade, too many publicans have little profit to show for the long hours they put in. Staff costs, energy bills and unfair cumulative taxation are undermining businesses that communities depend on. Around 40p in every £1 spent in a pub now goes to the Treasury. That is holding back the very investment, employment and growth that the Government wants to see.’

• Mr Alton calls on the Prime Minister and the Chancellor to ‘use this Budget to give pubs a fair deal, with 10% VAT on all pub sales at its heart. Back our publicans and they will deliver in every postcode.’ He says ‘tax them harder and thousands of communities could lose their pub.’

Other news:

Writing in The Telegraph, serial entrepreneur Luke Johnson says he will stop investing in the UK if capital gains tax is raised….

• The former chair of Patisserie Valerie where the fraud trial involving the executive directors (and not Mr Johnson) has been pushed back to January 2028 says that only around half a million people currently pay the tax at a rate of between 18% and 24%.

• He says these rates are currently ‘pretty average’ but notes that ‘in my working lifetime, capital gains tax has fluctuated more than any other tax – it has been imposed at rates from 10% to 40%.’ He then says ‘I would stop all investment in this country if the Government aligned capital gains tax with income tax.’

Capital transactions: Sector specialist property agent and advisory company Christie & Co has reported H1 numbers saying that it has sold more pub businesses in H1 this year than it did in the same period in 2025. The company adds that there was also ‘modest growth achieved in our hospitality stock audit business in line with management expectations against the backdrop of widely recognised challenging conditions for the UK hospitality sector…’

• Christie reports that ‘transactional brokerage activity across our UK and International operations has remained robust throughout H1, with the combined value of active mandates and agreed deals in solicitors’ hands up 7% at 30 June 2026 compared to the start of the year.’

• Christie adds that it ‘anticipates delivery of a full year performance in line with current market expectations, and once again anticipates selling in excess of 1,000 businesses in the year. The Group has a strong pipeline of deal flow in H2.’

COMPANY NEWS:

Blades Restaurants Limited, which operates around 10 McDonald’s restaurants on a franchised basis in the Nottingham area, has reported results for the year to 31 December 2025 to Companies’ House saying that revenues slipped by 4.9% to £38.6m. The group reports that its GP% rose to 65.9% from 65.4% in the prior year but, as revenues were down, gross profit in absolute terms fell to £25.4m from £26.5m in FY24. Admin costs fell by 3.9% and the group reports an operating profit of £380k against £452m in the prior year. With a modest amount of interest paid, PBT is £373k against £433k in 2024….

• Blades reports dividends for the year of £495k (FY24: £1.15m) and, as a result of the company’s reduced profits, its tax liability and its dividends paid out, retained earnings and shareholders’ funds, which are around the same figure, fell to £1.92m from £2.14m in FY24.

• The company says that ‘during the year digital sales via McDelivery, mobile apps and self-order kiosks have continued to increase as the company seeks to make the food ordering process ever more customer friendly.’ It says it ‘has continued to invest in the business and in the development and training of its employees, as well as continued investment in IT and store equipment.’

Kingston Restaurants, which ran 8 McDonald’s outlets on a franchised basis in the Hull, East Yorkshire, area, at the time of its numbers, has reported results for the year to end-December 2025. The group had 10 units in the comparable period in the prior year. It says that revenues slipped by 16% to £42.2m but the GP% rose to 66.0% from 65.4% in FY24….

• Kingson reports that admin costs were reduced by around 17% but the surplus on disposal of restaurants of £2.9m booked in FY24 was not repeated. Interest received rose (due to funds received after asset sales) but the company still reports a loss before tax of £32k as opposed to a profit at the same line of £1.94m (including asset disposals) in the prior year.

• The company reports a dividend of £450k for FY25 (£1m in FY24). It reports retained profits of £10.6m and shareholders’ funds of £11.5m.

• The company cautions that ‘the hospitality industry continues to face significant challenges and uncertainty. Consumer spending remained unpredictable as the cost-of-living crisis continued to drain discretionary expenditure. The employment cost increases seen in April 2025 have added a further strain on the whole sector.’

• It says, however, that ‘despite these headwinds, we focused throughout the year on enhancing customer experience, optimising cost structures, and driving sustainable growth across our portfolio of restaurants. This has been reflected in the increased footfall within stores during the year which has continued into 2026.’

• Kingston says ‘we are pleased to report a set of sound financial results amid a backdrop of significant macroeconomic challenges.’ It notes that ‘during 2025, an impairment loss of around £219,000 was recognised in respect of a specific loss making restaurant.’ It says ‘if we remove the impact of the one-off impairment, a profit before tax of around £187,000 was achieved which has solely been realised from the carrying out of trading activities.’

• The company reports that ‘since the year end the company has committed to acquire one further restaurant which will bring the total operational restaurants to 9.’ It does not comment on current trading.

HOLIDAYS & LEISURE TRAVEL:

Tourist taxes. The FT reports that tourist taxes are ‘on the march.’ It says that, whilst they are attracting headlines in the UK, they are also spreading internationally. Local authorities are seeking to manage overtourism whilst also raising revenue….

• The FT had earlier in the month reported on the visitor levies, with no cap, that authorities will be free to levy from 2029. Whilst the levy will be a percentage of the accommodation cost, rather than a fixed amount, the charge does have the potential to dampen demand.

Whitbread: The FT reports on Whitbread’s continued efforts to turn revenue growth into profits in a high cost environment.

Heathrow Airport has cautioned that its third runway might be delayed by up to four years due to planning and regulatory issues. The runway, which could cost around £33bn, would open in 2035.

Moody’s has commented on Royal Caribbean Group’s agreement to acquire 50% of the equity of Sandals and Beaches Resorts for $3 billion saying that ‘the purchase multiple of around 10x forward EBITDA will provide for a reasonable return on Royal’s $3 billion investment, but will modestly increase pro forma debt/EBITDA by 0.15x-0.4x….

• Moody’s says ‘we expect a negligible effect on Royal’s operating results or financial condition’ and adds that ‘the Sandals investment is the second lever Royal has pulled to broaden its offerings to its ocean cruise customers since the start of 2025. In January 2025, it announced that it planned to offer European river cruises via its Celebrity Cruise brand.’

• Moody’s reports that ‘we do not know how much of its 50% share of Sandals’ annual EBITDA Royal will receive as cash distributions. When adjusting financial statements, we typically increase an issuer’s EBITDA by the amount of distributions received from equity method investments, when there is a demonstrated track record of such distributions being made.’

OTHER LEISURE:

Ladbrokes, Coral and Bet MGM owner Entain has updated on trading given ‘announced regulatory development in Brazil, prohibiting online sports betting and gaming’ saying that the move to withdraw all operators’ authority to operate online sports betting and gaming with immediate effect’…

• It says ‘this provisional measure requires Congressional approval within a 120-day period to remain valid thereafter. Congress may reject, approve, or make amendments to the executive measure. Therefore, the longer-term outcome is likely to remain uncertain during this period.’

• It says it is ‘disappointed by this sudden development without consultation of industry stakeholders regarding its significant adverse consequences. However, Entain’s operations in Brazil are complying with the provisional measure.’ It says that ‘in FY26, Entain expected Brazil to represent approximately 5% of the Group’s Online Net Gaming Revenue, although given the challenging and highly competitive operating environment, its EBITDA contribution was expected to be modest.’

• Overall, it ‘reconfirms FY26 Group Underlying EBITDA guidance of between £910m to £960m and Online Underlying EBITDA margin guidance of 21-22%, while now expecting to be towards the lower end of both ranges due to Brazil’s provisional executive measure.’ It says that ‘excluding Brazil, Entain remains on track to deliver FY26 Online NGR growth at the top end of its guidance of 5-7% on a constant currency basis.’

• 2026 is clearly a part year and the full year 2027 impact will depend very much upon whether the measure is approved by congress. Entain says it ‘will continue to monitor the situation and will provide updates as appropriate.’

Hollywood Bowl has announced that Young & Co ECO Simon Dodd is to join the company as a non-executive director.

Cinema chain Odeon has reported numbers for the year to end-December 2025. Ticket sales fell by 2% and the company has taken a £232.7m write-down against the value of its cinemas.

The Daily Mail reports that ‘owners of seaside arcades fear a ‘devastating’ hike in gambling taxes could put them out of business….’

• And casino and bingo hall operator Rank Group has warned that up to a third of its venues could face closure if the Government opts for a sharp increase in gaming machine taxes at next month’s Budget, reports The Independent. CEO Richard Harris told the Press Association that an increase to 40% would make a large number of its units ‘unviable’.

• He says ‘we have a healthy business, but if it went to 40% about a third of our estate would have to close. Jobs would be at risk and it would have a big impact to local areas by hitting workers, but losing bingo halls would have a social impact, too.’ He says ‘there are other operators who wouldn’t just be looking at shutting venues but wouldn’t have a future at all.’

Podcast company Goalhanger has reported pre-tax profits of more than £10m. The company has announced the payment of £5m in dividends.

Sky News reports that the English Football League is seeking a payment of over £207m a year in each of the next five years from the Premier League.

And, with Manchester City’s problems keeping the lawyers happy, it’s reported that a number of Premier League clubs are taking legal advice as to whether they have a case for compensation payments from Manchester City after the club was found guilty of the ‘vast majority’ of the rule breaches it was alleged to have made.

The BBC reports that Sir David Beckham has netted a £38.5m payout from his sports, fashion, and media business after the 2026 Men’s Football World Cup helped it bring in record profits.

Microsoft founder Bill Gates has added his voice to those expressing concern about the continued development of AI, He says that, if left unchecked, it could cause ‘a billion deaths’ and adds that ‘no one thinks self-regulation is enough.’

FINANCE & MARKETS:

The EU is calling on the UK to raise tariffs against Chinese car imports if it is to avoid being excluded from the Continent’s ‘made in Europe’ umbrella.

Sterling up at €1.1629 and $1.3244. Oil up at $107.16. UK 10 year gilt yield up 1 basis point at 5.38%. World markets higher on Friday & London set to open around 20 points higher as at 6.30am.

RETAIL WITH NICK BUBB:

• Saturday’s Press and News (1): In terms of the front-page News headlines of Saturday’s papers, many led with the news that Manchester City have been found guilty of breaking 114 of the 115 financial rules they were accused of breaching. Even the FT made this its main story (“Man City found guilty in probe over funding”), whilst the Guardian flagged that “Premier League in turmoil after Man City found guilty” and “The 114 guilty verdicts that rocked football” was how the i Weekend described it. In other news, the Times led on a “Cabinet rift”, reporting that the Housing Secretary, Angela Rayner, has criticised Home Secretary Shabana Mahmood’s visa reforms plan that would ‘make it harder for foreign workers to claim permanent residence in the UK’. The Daily Telegraph, bizarrely, continued to focus on the fate of the retired explorer Ranulph Fiennes (“Investigate Fiennes captivity, say
family”), whilst “Burnham bottles it!” was the headline in the Daily Mail, after the PM ruled out a snap General Election. Finally, Daily Mail readers also had to put up with the thoughts of the wretched Boris Johnson on UK politics, as his weekly column was headlined “When Starmer chucked Rwanda, he threw away Britain’s defence against illegal immigrants – and Burnham looks even more wet and hopeless”.

• Saturday Press and News (2): In terms of Retailing stories in the Business sections of Saturday’s papers, the FT had an odd story about the sale process for Poundland, flagging that its owner, Gordon Brothers, has demanded that potential bidders cough up £30m to cover a shareholder loan. The Times also picked up on that report (“Poundland’s £30m price raises doubts about future”). The FT also had a big article about the UK launch of the Jersey Mike’s fast-food chain, ahead of its first store opening in Argyll Street, near Oxford Circus (“On a roll: Jersey Mike’s bets hot subs will sell in ‘cold’ Britain”). The main Business story in the Guardian was that the Government has committed £210m to regenerate England’s High Streets, highlighting the weakness of Central Arcade in Newcastle, the Churchgate shopping centre in Hitchin and the Whitgift Centre in Croydon. And the ‘Investment Extra’
column in the Daily Mail was devoted to the outlook for the kitchen market, noting that most analysts see Howden and Wickes as Buys and that Kingfisher is more of a Hold, after its recent share price rally. 

• Sunday Press and News (1): The front-page headlines of many of the Sunday papers were mixed. The Sunday Times led with a report that a former bodyguard to the leader of Hamas secured asylum and citizenship in the UK over a decade ago, before “plotting” a terror attack in Europe ahead of the second anniversary of the 7 October attacks. The Observer devoted its entire front page to a photo of what it called “The most powerful woman in Britain”, Louise Haigh, “Burnham’s de facto deputy” who has brought her “Sheffield steel to Westminster”. The Mail on Sunday claimed, ahead of the start of the Labour Party Conference in Liverpool, that “Labour at war over migrants and economy”, whilst, bizarrely, the Telegraph led for the third day in a row with the pleas from the family of retired explorer Ranulph Fiennes (“Fiennes family ‘snubbed by police’”).

• Sunday Press (2): In terms of Retailing stories in the Business sections of the Sunday papers, we couldn’t see anything in the Sunday Times, but the Sunday Telegraph had another ominous-sounding article about Poundland, noting that credit insurers have stopped coverage for suppliers because of the Gordon Brothers sale process and that management had to fly to Shanghai recently to persuade Chinese factories to continue working with Poundland. The Mail on Sunday looked ahead to the Greggs trading update next week and noted that hedge fund shorts are nervous (“Will appetite for Greggs grow on Burnham backing?”).

• Sunday Press (3): In terms of the Economics etc comment columns in the Sunday papers, we give our usual shout-out to the regular column by David Smith, the Sunday Times Economics correspondent (headlined “Healey still has to convince markets he’ll cut the deficit”), in which he noted that “One of the Bank’s deputy Governors warned that some rate increases are likely”. We also liked the columns in the Observer by the Political correspondent Andrew Rawnsley (headlined “The Labour faithful want to believe in Andy Burnham. The hard choices can wait for now”) and by the veteran Economics commentator William Keegan (headlined “Sticking to Keir’s plan would not impress Keynes”).

Today’s Press (1): In terms of the front-page News headlines, according to the press summary email from the Guardian, the Guardian itself leads with “Five men arrested after explosives found near RAF base used by US”. The Times leads with “Iran link investigated in ‘terror plot’ at RAF base”, the Daily Mirror has “999 call foils ‘terror plot’” and “Farmer foils RAF bomb plot” is the top story at the Sun. The Telegraph has “Iran link to RAF bomb plot” and the Daily Mail says “‘Iran bomb plot’ at RAF base foiled by farmer’s 999 call”. In other news, the Financial Times runs with “Burnham to fight election on tax rises for care reform” and the i Paper leads on “Tax rise talks at No10 to pay for new National Care Service”.

Today’s Press (2): In terms of Retail news in the Business sections of the papers today, there isn’t much to report, although the Times picks up on the Sunday Telegraph story about Poundland (“Poundland managers fly to China for supplier crisis talks”). And in its preview of the week’s company news, the Times notes, ahead of Thursday’s earnings in the US, that ‘Nike has been running to stand still recently’ and ‘last week the company lost its place in the S&P 100, the index of America’s biggest companies”, whilst, ahead of Friday’s finals from the pub company, that ‘Investors in JD Wetherspoon have grown accustomed to bad news’. On its UK News pages, the FT has an interesting article about the Uxbridge Road in West London, headlined “High street battles against bookies and chicken shops”, noting that ‘London activists say diverse stores are pivotal to reviving ‘hollowed out’ areas’.
The FT also has a full-page feature on Milan Fashion Week (“Can Italian fash­ion restart the party?”), noting that ‘Demna offered retail therapy at Gucci, D&G made the case for maximalism while Louise Trotter got crafty at Bottega Veneta’.

BDO High Street Sales Tracker: This sales survey for medium-sized Non-Food chains from the accountants BDO, which comes out on a Friday morning, gets a lot of focus, because it is the only weekly (as opposed to monthly) guide to Non-Food Retail spending trends, in terms of publicly available data. It has a useful split of Store and Online sales growth, but its methodology is flawed and the survey is concentrated on relatively upmarket and small Fashion retailers (plus a handful of premium Homewares and ‘Lifestyle’ retailers), so it is not a perfect guide… Momentum in the latest week stayed positive, however, as the w/e Sept 20th saw Total BDO LFL sales up by c0.6% versus a year ago, despite a tough comp (with Stores overall up by c1.2% LFL and Online sales overall up by c1.1% LFL), with total Fashion sales alone up by c0.8% LFL.

News Flow This Week: As September/Q3 draws inexorably to a close, the pace of news slows down this week, although tomorrow brings the Card Factory interims and Wednesday brings the Greggs Q3 update. And then, as October/Q4 gets underway, on Thursday we get the Topps Tiles pre-close update and the Nike Q1 results (in the US).