Henry Engelhardt, CBE of Admiral has made a name for himself amongst the slightly uncompetitive world of exciting yearly commentaries, his trademark being a customary analogy, from koalas to jacket potatoes, he’s done them all. This was his 16th and final one for Admiral and he made sure not to disappoint, gifting readers two; ‘’I would sum up all our results since 2000 as being akin to a seedless watermelon: tasty and refreshing but somehow you always wonder how can that work in the future?’’. He followed this up by describing their latest full year results as ‘the year of the uncut diamond’, one would assume this betters 2014’s ‘baked Alaska’ (hot and cold in a single bite) and is potentially a step up from 2013’s ‘baked potato’ (comfort food: solid yet unflashy). The analogy itself is laced with uncertainty going forward, only time will tell how valuable the uncut diamond will be.
Then Next come along with their year-end figures. Aside from anything else it was a solid set of results and the period reported on had in many ways it had been a success. Despite this the CEO managed to send the share price reeling with a cautious outlook and revised full year guidance downward. Well known for his bearish predictions, Mr Wolfson predicted a move away from people spending money on clothes, instead moving towards areas that suffered most during the credit crunch, naming travel & recreation and going out, but was unable to substantiate this with any evidence or fact.
Sadly Danny Breithaupt, CEO of Restaurant Group criminally made it through his statement without any food analogies or puns, which are surely served to you on a plate when you’re CEO of Restaurant Group. Anyway, what do Restaurant group and Leicester City football club have in common you ask? Well they both perform strongly on a weekend. This alludes to the fact consumers may feel more confident to spend money on eating out, but their midweek trading remains soft and as yet would not be in line with the suggestion with Next’s Chief Exec.
Data from Kantar (the Supermarket industry data specialist) released at the beginning of April showed the fastest 12 week growth period for groceries in a year. An early Easter helping this along yet the trend is there to be seen. It showed that Aldi and Lidl are growing their premium ranges at twice the rate of their lower end product ranges and that the other major retailers are doing the same albeit at a slower rate. This data contradicting the belief that people are more inclined to eat out as per the Next suggestion and inferring they are in fact bypassing their Frankie and Benny’s (a Restaurant Group brand) in exchange for a posh meal at home. You’d think more people being at home may benefit companies like ITV, yet they have seen viewing figures fall despite announcing a £400m special dividend.
So many contrasting and contradicting views and logics, it appears that for the UK Consumer at least, the outlook is about as cloudy as a Henry Engelhardt commentary and to replicate his food based analogies, about as challenging as baking a soufflé.