RESTAURANT THEMES CALL
As we look to 1H22 where the market narrative will likely turn to "deflation," we are adjusting our longs and shorts ahead of that shift. As such we are adding MCD, SBUX, WING, and YUM to the LONG list and removing DASH, TOST, and TKWY-NL from the long list. All of this will manifest itself in a very challenging top-line environment in 2Q22, with significant inflation.We go over all of our thoughts in an upcoming Restaurant Themes Call focused on the following themes and covering 22 names.
CLICK HERE at the time of the event for the live webcast and materials.
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THEME - FLIGHT TO SAFETY
Omicron is hurting Restaurant industry sales
All of these events will help to lower restaurant sales around the world!. China locked down 5 million people living in the city of Anyang after two cases of omicron were reported there. Hong Kong is reportedly set to ban passengers from designated high-risk countries from transiting through its airport. In Spain, the prime minister called for a debate to consider Covid to be endemic, meaning it would be monitored more like a flu. U.K. Prime Minister Boris Johnson, meanwhile, is facing opposition calls to resign as allegations emerge about a rule-breaking party at his official residence. The U.S. Centers for Disease Control and Prevention advised against travel to Canada, while a record wave of school closures in the U.S. seems set to abate. Pfizer Inc. is developing a hybrid vaccine that combines its original shot with a formulation that shields against the highly transmissible omicron variant.
International is getting expensive for DASH
Bolt, based in Estonia, said it had raised $711.40 million from investors led by (Sequoia Capital and Fidelity Management and Research Co,) taking its valuation to $8.38 billion (last round was $4.0 billion.) Bolt competes against Uber for the ride-sharing and food delivery business. The company also offers electric scooter rentals, car-sharing, and a 15-minute grocery delivery service. The company serves over 100 million customers in 45 countries and over 400 cities across Europe and Africa. "We are expanding all the five product lines extremely quickly, developing product R&D and rolling out in new cities," Chief Executive Markus Villig told Reuters in an interview. While Uber is the biggest rival for ride-hailing, Bolt faces competitors in food delivery, including Just Eat Takeaway.com and DoorDash, which entered Europe via an $8 billion purchase of Wolt. The concern for DASH and others is Bolt often offers discounts leading to price wars in some markets. "In many cases, we have been the driving force that lowers prices for consumers, so from day one, we were focused on being frugal." We have been offering substantially lower prices than anybody else in the industry, and we expect this to continue."
