Leading analyst Mark Brumby at Langton Capital says that trading is still no walk in the park, with more discounting evident. He highlights that “every pound is a prisoner, there’s intense competition at the lower end”.

What’s happened?

· We know about the financial excesses of 2003-07, the credit crunch & the recession

· And we know about the recovery but where are we now; right now?

· Real wages have blipped into positive territory but things feel a shade more challenging

· Warmer Sept + Oct weather didn’t provide quite the boost it might have

· Discounting is on the up, interest rates will rise in 2015 + the consumer remains constrained

· Off-trade promos (Spitfire £1 a bottle, Becks (in 30s) 60p) have intensified

What does this mean?

· We shouldn’t become too blasé when edging up forecasts

· Every pound is a prisoner, there’s intense competition at the lower end

· Hungry Horse (GNK), Sizzling Pub (MAB) & other value-operators are particularly active

· Companies understandably seek positive LfL sales but margins may pause for breath

· Winter 1013/14 was benign, comps are tough & beating (even hitting) forecasts is not a given

Implications, conclusion etc.:

· General feeling that the pedal is to the metal (grocery prices down, costs benign, wages in growth, unemployment down etc.) but consumers’ response is half-hearted

· We would not abandon the sector – nor the consumer in general nor the UK economy

· But rather favour more modestly-rated operators such as Marston’s or those with real USP (JD Wetherspoon) in this environment.