Mark Brumby, of Langton Capital, asks whether the good times are over for operators in London:

London trading has been great. It might be getting a little less so.

Recently:

• LfL sales have been chugging along at 4%, 5%, 6%…

• Whilst extremely positive, capacity has been increasing, new units have been going on

• New entrants (vibrant, innovative, relevant) are opening units apace

• Occupancy costs have risen sharply; a lead-indicator, they may be a little off the top

Other indicators:

• Hotels have slowed – albeit from record high occupancy, REVPAR levels.

• Partly a supply problem, they are still servicing an increased number of visitors

• Sterling weakness should have been a positive

• But MERL & some shops have suggested numbers aren’t what they might have been

Fuller’s comments today:

• Group reports ‘another excellent year…’

• But FY15 is over & comments re current trading hint at a slowdown

• Managed LfLs +5.6% in H1, +5.3% by wk43 and +4.8% for the FY. To wk10, they are +2.7%

• H1 Tenanted profits were +3% but +2% at FY. To wk10, they are down 2%

• Beer volumes were +1% at H1 but minus 1% for the FY. To wk10, they are down 5%.

Caveats:

• Before leaping to conclusions we should acknowledge:

1. April was poor across the industry but May was better.

2. Wk10 comps included Easter last year but not this

3. The weather can swing numbers +/- 20% LfL on a day-to-day basis

4. The group updates analysts at 11am.

Overall:

• London is not ‘over’ but growth may have, at the very least, slowed

• YNGA & FSTA are obvious players but GNK/MAB are more London-heavy than is MARS