Wednesday 25/11/20

  1. In MARKETS, CRYPTO & VACCINE NEWS, US stocks rise, Bitcoin breaks $19k and Sputnik is looking good
  2. In RETAIL NEWS, we look at the problems faced by global retailers as well as the fortunes of Best Buy, Debenhams, AO World and Pets at Home while Sainsbury’s offers in-store Patisserie Valerie and I bring you the latest retail catchphrase
  3. In CORONATRENDS NEWS, we look at Peloton frustration, Camelot’s triumph and Compass’ thoughts on the effects of WFH
  4. In MISCELLANEOUS NEWS, India bans more Chinese apps while Accor and Hoxton cosy up
  5. AND FINALLY, I bring you something you might not have known about biscuits…



So the Trump Bump gives way to the Biden Boost, Bitcoin smashes through new highs and Russia touts the superiority of its vaccine…

*** 📣 Watson’s Daily is going to start a monthly competition for SILVER members. The prize will be three weeks of commercial awareness sessions with me! More details to come…***

Biden boost pushes Dow past 30,000 for first time (The Times, Robert Miller) shows that US markets are shrugging off rising incidences of Covid as investors put their money on a rapid economic recovery in 2021. A combination of more positive vaccine news, Trump’s capitulation that paves the way for Biden to slide into office in January and the prospect of Janet Yellen (ex-Fed chief) helped sentiment. It certainly looks like there’s a lot of optimism priced in at these levels!

Meanwhile, Bitcoin price reaches three-year high of more than $19,000 (The Guardian, Julia Kollewe) highlights Bitcoin’s continue strength as it smashed through $19,000 for the first time in three years, coming within touching distance of its all-time high. Bitcoin has risen by almost 40% in November and by about 160% this year. PayPal has just launched a cryptocurrency trading platform and is rumoured to have bought about 70% of all new bitcoin in

circulation. In addition to this, Chinese authorities appear to be cracking down on cryptocurrency exchange, putting Bitcoin miners under pressure – thus restricting the amount of new bitcoin in circulation. * SO WHAT? * This is an incredible performance. However, one player buying 70% of new bitcoin sounds like a disaster waiting to happen to me. Still, momentum says otherwise and as long as bitcoin remains in short supply the rise looks like continuing! 

I’m sure that Russia says Sputnik virus vaccine more effective than Western rivals (Financial Times, Max Seddon and Donato Paolo Mancini) will come in for a lot of scepticism but Moscow’s state-run Gamaleya Institute said yesterday that interim results from phase 3 trials show efficacy rates of “above 95 per cent”, which is clearly better than what everyone else has come up with so far. The Sputnik V vaccine is being touted as an alternative to the Moderna, AstraZeneca/Oxford Uni and Pfizer/BioNTech candidates already on the table. Critics highlight its small sample sizes and rush to approve, but you know what – as a human being – I hope it really is that effective. It probably is a gamble, TBH, but better to be lucky than good, I think! * SO WHAT? * Russia has been busy on the vaccine front and it was the first country to register a Covid vaccine in August when it was approved BEFORE phase 3 trials. A second vaccine manufactured by Vektor was approved last month and a third is expected to get the government green light next month. What IS interesting, however, is that President Putin himself has not yet decided whether to take a vaccine himself! Talk about “Do as I say, not as I do!”!!! 



Retailers continue to enjoy mixed fortunes and I bring you the latest retail catchphrase…

In Tourism slump hits global retailers (Financial Times, Alistair Gray and Mamta Badkar) we see that international retailers are feeling the pinch of a lack of tourists. Abercrombie & Fitch is about to accelerate store closures in many major tourist destinations in London, Paris and five other places as the evaporation of tourist traffic has decimated sales that were already flagging before the outbreak. It argues that it is now seeing a much bigger rise in its online sales and that this will cushion any blow from closures. Although Tiffany reported much weaker sales in Europe and the Americas, China sales help Tiffany profits shine (The Times, Robert Miller) shows that a massive jump in sales of over 70% in China helped to bring quarterly profits in above market expectations. No doubt Tiffany’s owner, LVMH, will be purring with pleasure at its new toy 😁.

Best Buy continues Coronavirus-driven gains but warns they will taper off (Wall Street Journal, Dave Sebastian) shows that the consumer electronics retailer continues to benefit from people tooling themselves up over lockdown but it is currently facing supply problems and is concerned about how long the good times can last. Online sales almost tripled in the third quarter but higher supply chain costs are likely to bite if demand slows down. Talking of consumer electronics retailers, Lockdown provides key for AO World’s return to profit (The Times, Ashley Armstrong) highlights the stellar performance it has put in over the last six months. The company saw a massive 53.2% hike in sales as people shopped online in increasing numbers and even its problematic German division was in line to return to monthly profitability. The company is expecting a decent performance for Black Friday. Interestingly, AO World has recently been testing out concessions in Tesco’s larger Extra stores – its first adventure in physical retail – and it was all going pretty well until the second lockdown hit. The two parties appear to want to continue this arrangement on a longer term basis.

Puppy love revival gives lift to Pets at Home (The Times, Ashley Armstrong) shows that more pets have been bought during lockdown, which has done very nicely for Pets at Home as sales of pet supplies continue to climb. * SO WHAT? * Working from home has meant that more people can have a pet and an Ipsos Mori poll found that almost 50% of Britons who own a pet got at least one more during lockdown and 10% of households without intend to get one within the next six months! Despite increased overheads due to temp staff hire and the implementation of safety measures, the company expects full-year profits to come in as expected.

Elsewhere, Sainsbury’s offers a slice of Patisserie Valerie from today (Daily Telegraph, Oliver Gill) heralds a return of sorts of the posh bakery as its products will be on the shelves from today and be rolled out to 250 Sainsbury’s stores by Christmas but Debenhams may close up to 60 stores, putting thousands of jobs at risk (The Guardian, Sarah Butler) shows that Debenhams is now getting to the closing stages of being bought as it turns out that JD Sports is the only one left in the bidding. A deal could be announced before Christmas but it’s not all been finalised yet and could still fall apart. * SO WHAT? * I think that online retailing will continue to rule, lockdown or no lockdown, but physical stores could see an uptick in the run-up to Christmas as a bit of a novelty! The more used to online shopping we become, the more we will continue to use it in future IMO. For the longer term, I think it is imperative that retailers sort out a balance of online and offline presence and that they put more effort into customer experience at their physical stores to give people reasons to go there.

I also wanted to alert you to We’re all cyber now (Wall Street Journal, Aaron Black) as there is a new phrase in town – “Cyber 5”. It is a new term for the five-day shopping period from Thanksgiving to the following Monday and includes Thanksgiving, Black Friday, Small Business Saturday, Cyber Sunday and Cyber Monday. The fact that a Cyber 5 is now in existence highlights how shopping habits have changed. Research firm eMarketer reckons that e-commerce sales will rocket up by 50% on Thanksgiving as more stores will be closed on that day than in the past.



Peloton customers get frustrated, Camelot benefits hugely from lockdown and Compass tries to divine the future…

We all know that there have been major changes in consumer behaviour under lockdown as more people have been working from home. Some Peloton buyers are sick of waiting (Wall Street Journal, Sharon Terlep) shows that home exercisers desperate to get their fix are giving up on Peloton in increasing numbers due to long lead times and delivery delays – so rivals such as NordicTrack and Nautilus are benefitting from Peloton’s woes by customers buying their gear instead. * SO WHAT? * This is a bit of a disaster for lockdown winner Peloton, but there’s not really that much it can do as it is a victim of its own success. I would expect ALL such companies to experience major delays going forward and people will just have to grin and bear it. Mind you, if it gets that bad, maybe it will be good for gyms as people who are fed up of waiting for gear that never arrives will prefer to chance it and work out in public.

Camelot the big lottery winner after ‘seismic’ switch to online (Daily Telegraph, Oliver Gill and Russell Lynch) highlights another lockdown winner as punters switched in their droves from buying National Lottery tickets in shops to going online. * SO WHAT? * Although sales initially fell by 18% initially under lockdown they bounced back strongly as the public switch to playing online, leading to figures for the six months to September hitting record levels.

Compass expects office workers to stay at home (Financial Times, Harriey Clarfelt and Alice Hancock) shows that catering giant Compass is expecting long-lasting effects of lockdown as it expects white-collar workers to work about 2.5 days a week from home, which will cut its annual sales by about 5% as it is exposed to business in office canteens (this accounts for about 20% of revenues currently). In future it wants to concentrate more on businesses in schools, hospitals and care homes – which stay open.



India cracks down further on Chinese apps and Accor gets together with Hoxton…

In other news doing the rounds at the moment, India bans 43 more Chinese apps including AliExpress (Financial Times, Stephanie Findlay) shows that India’s crackdown on Chinese apps continues (it already banned over 200 since June) as Alibaba’s AliExpress gets swept up in the crossfire. India’s Electronics and Information Technology ministry ordered the block yesterday for “engaging in activities which are prejudicial to sovereignty and integrity of India”. The testy relationship between India and China continues…

Then in Accor and Hoxton hotel chain to merge boutique brands (Financial Times, Alice Hancock) we see that Europe’s biggest hotel chain, Accor, is merging 25% of its brands with Ennismore (which owns the Hoxton hotel

chain) into a new $1bn boutique hotel company that will operate under the Ennismore name and have a London HQ. * SO WHAT? * Supposedly, this is nothing to do with Covid (yeah right) but that it is more about moving with a trend of customers wanting to go to “destination” hotels (presumably rather than just using them as places to sleep and get a bit of breakfast). The hotels that will be in the new group have revenues of over 40% from food, drink and entertainment and it may be that this move is part of a longer term industry trend of trying to move away from relying on business travellers. I think that this is good, positive action and it will be interesting to see whether this pays off. FWIW, I think that this IS the way to go because if you just want somewhere to stay as a “base” you can save yourself much more money by using budget options whereas staying at a hotel may be increasingly seen as being an integral part of the holiday itself. It’s too early to tell whether this will be a long term trend or not as it is also possible that they will slide back into enticing business customers when behaviour reverts to previous norms.



…in other news…

I thought I’d leave you today with a useful trick if you like biscuits: Dad’s simple hack to reseal biscuit packet is blowing people’s minds (The Mirror, Luke Matthews). I think “blowing people’s minds” is exaggerating somewhat, BUT this is a useful thing to know!

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Some of today’s market, commodity & currency moves (as at hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq*DAX *CAC-40 *Nikkei **Shanghai **
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

(markets with an * are at yesterday’s close, ** are at today’s close)