AG Barr reports total sales down 1.1%: Soft drink group AG Barr has reported that total group sales, excluding the now divested Orangina brand and Findlays water coolers, declined by 1.1% for the 15 weeks to 9 May 2015 versus the same period last year. The recently acquired Funkin business continues its growth trajectory and contributed just under £3m to gross sales. In the period, the total soft drinks market as measured by Nielsen, recorded modest value growth of 0.7%. The company stated: “As previously indicated, this sales performance reflects the return to a more normal sales phasing over the year compared to the strong first half performance in prior year sales related to our Glasgow 2014 Commonwealth Games marketing and promotional activity. Margins continue to hold up well as we drive efficiency improvement across the business. We have a strong summer brand programme planned across all of our core brands and expect to see a return to sales growth in the second half of this financial year. The balance sheet remains strong and there have been no significant changes in the financial position of the Company, save as disclosed below, since publication of the Report and Accounts for the year ending 25 January 2015. We are pleased to confirm that we have now signed development agreements to build further warehousing capacity as we continue to develop our Milton Keynes site. This includes the acquisition of an additional 1.54 acres of land. We have also agreed to purchase a further 3.86 acres of land, adjacent to our existing site, to give us additional expansion options in the future. The total cost of this development is £11m including £4m for the land for additional future expansion. The UK macroeconomic environment appears more positive; however, this is balanced by a retail market which continues to be competitive and volatile. We remain confident in our strategy and long-term prospects. We are on course to meet our expectations for the full year despite the challenging conditions across the market.”

Burger & Lobster launches two sites in one week: Burger & Lobster has launched two new sites – a new restaurant on Threadneedle Street and a second Smack Lobster Roll venue in Soho. Burger & Lobster Threadneedle St will be the group’s largest UK venue to date, providing space for over 300 diners, a private dining room and mezzanine level which overlooks the restaurant and impressive island bar. Threadneedle St will also exclusively launch Burger & Lobster’s new breakfast concept, which consists of their 60z breakfast burger and Lobster Scrambled eggs. Meanwhile over in Soho, Burger & Lobster will launch its second Smack Lobster Roll site on Dean Street this week. Serving up five Lobster Rolls including its B&L classic and 4 Lobster salads all at £10, Dean Street will be the first Smack site with a take-away option only.

Douglas Jack – our key points from leisure conference: Numis Securities leisure analyst Douglas Jack has set out his key points arising from the firm’s leisure conference held last week. He said: “The main positive theme was the strength of the UK consumer backdrop, and the resultant surge in demand for premium products (that are unique to the on trade). The main negative theme was the scale of supply growth in eating out, a scenario that favours strong brands in captive markets. Longview Economics expects consumer cash flow to grow by 3% in real terms in 2015, the best rate since 2005. It is also positive that Longview estimates that the process of de-leveraging household debt is now 40% complete. The backdrop should remain benign: 2-3% GDP growth in 2015 and 2016; no interest rate increase until 2016; and rising private sector employment. The main medium-long term economic risks are inflation and rising interest rates, stemming from low labour productivity and rising wage inflation. Slack in the labour market has started to dissipate, with the share of part-time workers in the labour market now falling. These issues, housing market earnings multiples, and the current account deficit should become more problematic when monetary policy eventually has to tighten. According to CGA Peach, eating out supply rose 5.4% in the year to March 2015 (with restaurants up 8.1%) whereas drinking out supply fell 2.9% (with wet-led pubs down 5.6%). Licensed retail supply is now growing more quickly in Manchester (+4% supply), Cardiff (+6%) and Leeds (+8%) than in London. Competition is fiercest in city centres, compounded by rapid growth in the fast casual restaurants and street food. On-trade drink is decreasing by 2.0% pa in volume, but rising by 1.7% pa in value, with all pub segments in volume decline, whereas the restaurant sector is in 5.2% volume (7.5% value) growth, driven by supply. Premium products are outperforming (volumes are growing at 21% for craft beers, 8% for world lager and 6% for premium cider, versus declines of 3% for standard lager and 5% for keg ale) and these trends are expected to continue. Pub food sales are growing at 5.8% (wet-led +6.8%; food-led +3.6%; bars +8.7%) according to CGA. Horizons forecasts a 3.9% CAGR for on-trade food sales through to 2019, with managed groups outperforming independents. Voucher promotional activity is falling, but restaurant prices have been steady for two years, whereas pub prices have been rising towards restaurant levels. Overall, we view the outlook as positive. The greatest risks rest with independent and mainstream restaurants opening in oversupplied town and city centres.”