Monday 28/09/20

1. In CORONATRENDS NEWS, Europeans return to the workplace, Russia prepares for more lockdowns, UK high streets fear a second wave and US grocers stockpile
2. In UK REAL ESTATE NEWS, the UK housing market looks vulnerable, first-time buyers are set to fade and IWG tries it on
3. In EV NEWS, everyone targets China while the Nikola scandal deepens further
4. In INDIVIDUAL COMPANY NEWS, the TikTok ban is faced down and Meatless Farm raises money to expand
5. AND FINALLY, I bring you the world’s smallest Rubic’s cube and how to seal crisps effectively…

So Europeans return to work but don’t kick back, Russia prepares for more lockdowns, UK high street braces itself for a second wave and US grocers start to stockpile…

In Europeans return to workplace but reduce leisure activity (Financial Times, Valentina Romei) we see that while parents have returned to work as their children have gone back to school (according to Google data), leisure activity has started to drop off as new coronavirus cases start to rise. Although the use of public transport is rising (according to transport and mobility app Moovit), international travel is falling – as are visits to entertainment venues and restaurants. Russian businesses prepare for fresh lockdowns as Covid-19 cases soar (Financial Times, Henry Foy) shows that many companies are preparing for tighter lockdown measures after a recent surge in the number of new coronavirus cases. Sberbank, Russia’s biggest lender and one of its biggest employers, is going to move half of its Moscow workforce to working from home and X5, Russia’s biggest food retailer, is ordering 90% of its Moscow office employees to work from home.

Fears grow of ‘knockout punch’ facing high streets (Daily Telegraph, Oliver Gill) shows that opposition MPs are putting increasing pressure on the government to rethink the government’s Job Support Scheme to avert mass unemployment and a “knockout punch” to the UK high street. Companies in hospitality and conferencing say that

they will be forced to make mass redundancies as furlough comes to an end and those working in the events, arts, leisure and sports industries will also be among those who will suffer particularly acutely.

Meanwhile, in the US, Grocers stockpile, build ‘pandemic pallets’ ahead of winter (Wall Street Journal, Jaewon Kang and Annie Gasparro) shows that supermarkets are stockpiling groceries and storing them to prepare themselves for the next few months as the country faces more new restrictions due to the coronavirus outbreak. Food companies upping production of their most popular items so that they don’t get caught out like they did the first time and grocery stores are stockpiling months worth of supplies rather than weeks worth for the same reason. Southeastern Grocers secured supplies of turkey and ham over the summer (way before they normally do) and grocery wholesaler United Natural Foods Inc has also increased inventory of cranberry sauce, herbal tea and cold remedies! Associated Food Stores has started to put together “pandemic pallets” of cleaning and sanitising products to ensure that its warehouses don’t run out. * SO  WHAT? * It does seem that we enjoyed a bit of a summer respite after the severe restrictions of the peak of lockdown and that many are now using those lessons learned to prepare for a second wave. Whether this is going to be worse than the first wave is clearly a moot point, but severe restrictions at this stage will undoubtedly be the end of many businesses who have only just struggled to their feet. Government help is clearly required, but it just won’t be able to save everyone unfortunately. At least we are now facing a second wave with knowledge of what happened the first time around.

We look at the prospects for UK residential and commercial property…

Given that, for many people, their most valuable asset is what they live in, House price growth set to fade away (The Times, Gurpreet Narwan) is something that those considering selling their property may not want to hear. Apparently, Google searches for key phrases like “Rightmove”, “Zoopla” or “On The Market” slowed down this month and are now 7% below the peak of August 23rd, according to analysis carried out by Pantheon Economics. * SO WHAT? * This is a very early indicator and so it is unlikely that this slowdown in momentum will be reflected in the upcoming Nationwide House Price Index. Many analysts are now saying that demand from those seeking to move to the ‘burbs and from first-time buyers will fade as we enter another period of uncertainty and potentially higher unemployment. In fact, Share of UK homes bought by first-time buyers expected to drop (The Guardian, Kalyeena Makortoff) cites forecasts from Zoopla which show that the property portal expects first-time buyer demand to fall going into the end of the year. Is the UK’s booming housing market heading for a bust? (Financial

Times, George Hammond) discusses the possibility of a sharp drop-off in the property market. It originally boomed because of pent-up demand from lockdown and then because of Sunak’s stamp duty holiday, but some say that these are artificial factors that disguise the underlying reality. When you then put Brexit on top of that, things are looking pretty dicey for the end of the year.

In commercial property, Buyout firm puts its faith in recovery for offices (The Times, Tom Howard) shows that KKR, the American private equity firm, is putting its money where its mouth is and buying a stake in Great Portland Estates to become the company’s fifth biggest shareholder with a 5.35% holding. It believes that central London office space will recover – a fairly ballsy move given that commercial landlords’ income has been decimated by the pandemic. Separately, IWG, the serviced offices giant (which used to be known as Regus) is on the verge of putting its Jersey-registered subsidiary Regus plc into in insolvency if landlords don’t agree to massive rent cuts. IWG makes its money by taking out long-term leases and then subletting the space in short-term deals. * SO WHAT? * I don’t think that we will ALL be working from home ALL the time once everyone gets vaccinated, but things will have changed enough on a longer term basis to make an appreciable difference. You can’t blame IWG for trying it on I guess. 

China becomes even more important and the Nikola scandal gets worse…

In a quick scoot around EV-related news today, Global carmakers bet on China’s electric vehicle rebound (Financial Times, Christian Shepherd and Emma Zhou) highlights China’s importance as a key growth driver for the world’s biggest automakers. The country’s annual motor show opened over the weekend after being postponed from April, and the venue was packed out. * SO WHAT? * Sales of EVs and hybrids are now rising after a year of

weakness following a cut in subsidies which was then made worse by the coronavirus outbreak. At the moment, EVs only represent about 5% of total car sales in China, but the country’s desire to be #1 in the world for EVs is a powerful attraction for car companies who are scrabbling about for sales.

I actually mentioned this story in the latest edition of Watson’s Weekly, but Nikola founder bought truck designs from third party (Financial Times, Claire Bushey, Peter Campbell and Ortenca Aliaj) shows that the horror show is continuing apace. Things are just going from bad to worse by the day for this company.

The TikTok ban faces resistance and Meatless Farm raises money…

TikTok download ban is blocked by judge (Wall Street Journal, Katy Stech Ferek and Georgia Wells) brings us the latest on the whole TikTok saga. Basically, a federal judge has now blocked Trump’s attempt to ban TikTok downloads in the US, giving the Chinese-owned app a bit of breathing space. The judgment came less than four hours before the ban was supposed to take effect. The drama continues…

There’s good news in Meatless Farm reaps $31m for expansion (The Times, Tom Howard) as the UK plant-based meat-alternatives firm managed to raise $31m to fund its expansion. The company said it would use the money to fund UK and worldwide expansion. Go Meatless Farm! The ongoing success of the likes of Beyond Meat and Impossible Foods suggests that the market for vegan food is not a short-term fad.

…in other news…

I thought I’d leave you today with something amazing in World’s smallest official Rubik’s Cube developed by Japanese companies (SoraNews24, Master Blaster) and something very useful in Ingenious three-step life hack to ‘perfectly’ seal half-eaten bags of crisps (The Mirror, Neil Murphy). How great is that?!?