Restaurants
Toast raised the range of pricing for the IPO to $34-36 from $30-33. That values the company at $18B at the high end of the range.
We are hosting our pre-IPO Black Book on Toast today at 2 PM.
Our key investment points:
Consumer Staples
Instacart boycott
A group of Instacart workers known as the Gig Workers’ Collective is advocating for a boycott of the platform to pressure the company to improve worker conditions. The workers are using #DeleteInstacart to pressure the company ahead of a rumored IPO later this year. In an open letter, the group wrote, "Continuing to utilize Instacart’s services would only enable its unethical behavior, endorse its continued exploitation of workers, and reward its corporate greed." The workers are demanding a reinstatement of a commission-based pay model, a 10% default tip, a more transparent system for assigning orders, occupational death benefits, and a rating system that does not punish workers for reasons beyond their control, like inventory issues at a grocer. In addition, workers have complained about a change to a batch order system that groups orders together, paying $7 per batch instead of $10 guaranteed per order. The current default tip is 5%, and a 40 cent per item commission order stopped.
UK grocery sales reflect change is happening (NOMD)
In the 12 weeks ended September 5, grocery sales increased 1.9% YOY and 8.7% higher than 2019. the 12 week period ended August 8 grocery sales fell 4% YOY and were 9.9% higher than 2019. Like for like grocery sales increased 1.3% in the latest month compared to -0.5% in the previous month. In the first week of September, Kantar recorded the highest week of traffic to supermarkets since Easter. Sales of ready meals increased 11% in the latest month, an indicator of less at-home cooking. The market share for online grocery shopping fell to 12.2% in the month compared to 13% in the previous month. The UK is Nomad Food's largest country by sales, representing 31% of overall sales (before the Fortenova frozen food acquisition).
Shifting on-premise drinking to the weekends (BUD)
Across alcoholic beverage categories, there has been a clear shift to consumption on weekends compared to pre-pandemic in the on-premise channel. Only wine had a slight 1% shift on Fridays. Beer increased its share on Saturdays by 2%, while wine increased by 3%. On Sundays, spirits increased its share by 2%, wine by 2%, and beer by 1%. The increase in working from home is likely behind the gain in on-premise alcohol consumption on weekends. On-premise establishments would prefer to see drinking spread out, but it may make it easier on staffing for now.
