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Fri 17th Apr 2020 - Propel Friday News Briefing

Story of the Day:

Murdoch – Burger King reopenings will provide important lessons on the way forward: Alasdair Murdoch, chief executive of Burger King UK, has told Propel the brand’s decision to reopen four sites for delivery only will provide it with important lessons on a way forward over the short to medium-term for the business. On Thursday (16 April), the company reopened four drive-thru sites – two in Bristol, one in Coventry, and one in Swindon – with a pared-down menu. Murdoch said: “Ideally, I would like to open more. It makes sense for us to initially concentrate on drive-thrus. Why? Because when there’s a release of the lock-down, there may be more drive-thrus available. Secondly, and more importantly, we have more space in our kitchens. Between 50% and-60% of space in our sites is taken up by kitchens and this is particularly prevalent in our drive-thru sites. So, we have the space to get people working in a safe environment. If these go well, and our teams are happy – and we need to get feedback from them – then yes, we will be looking to open more over the next few weeks. Where it is safe and applicable, we would also look to test contactless takeaway.” Murdoch said the sector was at a stage where “we have to look forward”, as “we will come out of this, and it is a question of how”. He said: “Since the decision to shut our restaurants was made, we have been working internally on what can we do, what can’t we do, and what would be possible. We feel we have made a good stab at it. We are not going to be making any money from it, but we feel by opening these sites we can learn important lessons about the steps we have taken, whether they have been 100% correct, and what other lessons are there to take on board. What further steps do we need to put in place, what else do we need to think about. If we are going to use gloves and masks how is that going to work in practice? Sneeze screens, which I am sure we are all going to be putting in, how does that work? There are hundreds of tiny little processes that we will have to get exactly right, because what is important to all of us is the safety of our people.” Murdoch will share more of his thoughts in the video interview, which will be released on Friday (17 April).

Industry News:

Charlie McVeigh to look at life after lock-down as part of latest Propel Premium column: Charlie McVeigh, Draft House founder and The Breakfast Club chairman, will look at life after lock-down and whether we can expect a V-shaped bounce or zombie apocalypse in the latest Propel Premium column, which will be sent to subscribers on Friday (17 April) at 5pm. Meanwhile, leading sector analyst Simon Stenning will look at what the immediate future holds for the hospitality industry while there will also be the latest sector whispers from Premium Diary. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from Mark Wingett. Subscribers also receive access to our database of multi-site companies, which has grown to 1,600 businesses. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email

S4labour – change in criteria for furlough scheme means some staff may no longer be eligible: S4labour, the online labour-scheduling management system from Catton Hospitality, has warned the change in criteria for employee eligibility on furlough pay means some staff may now miss out. The government has extended the cut-off to 19 March 2020. But S4labour chief product officer Richard Hartley told Propel the criteria has also changed. He said: “For an employee to be eligible they have to be part of a real time information submission notifying payment on or before 19 March. For many that pay staff on a weekly and fortnightly basis this will be good news as it will mean many more employees will now be eligible. For those on a monthly or four-weekly payroll this could mean some employees we previously thought were eligible are now not as some starters towards the end of February will not have been part of a full pay submission. There will be more that benefit than will lose out but the headline statement is misleading for employees and they should be contacting their employer to check their situation. The announcement has also changed the reference pay for salaried staff from 28 February to the last pay period prior to 19 March. Therefore any pay changes post 28 February can now be taken into consideration.”
S4labour is a Propel BeatTheVirus campaign member

Sector like-for-likes down 57.6% in March: Britain’s managed pub, restaurant and bar sector saw collective like-for-like sales drop 57.6% in March as the country moved into lock-down, according to the latest Coffer Peach Business Tracker. All parts of the market were hit hard as the slowdown in sales, which started in February, continued during the first half of the month before the total shut-down on 20 March. Managed pub operators reported a 57.8% fall in like-for-like trading compared with the previous year, with restaurant groups down 56.2% and bar chains falling 60.0%. London trading was down 60.4%, with those outside the M25 down 56.8%. “The drop in sales that began in February and escalated in the next month, meant even by the end of March, the eating and drinking out sector had fallen into year-on-year decline, down 4.1% on the previous 12 months, with London down 3.7%,” said Karl Chessell, director of CGA, the business insight consultancy that produces the Tracker, in partnership with The Coffer Group and RSM. “With shut-down wiping out April sales, apart from a small amount of delivery income, and May likely to be the same, the devastating effect on the market is self-evident. Reopening of the market will almost certainly be phased and gradual. We are looking at a substantial loss of revenue right across the sector.” 
Almost 2,000 pubs, breweries and cideries offering takeaway or delivery services: Almost 2,000 pubs, breweries and cideries are now offering takeaway or delivery services to help keep themselves afloat and customers served during the lock-down. The Campaign for Real Ale (CAMRA) has put together a directory of these initiatives as part of the Pulling Together campaign, launched in partnership with the Society of Independent Brewers and Crowdfunder, to encourage beer and cider drinkers to support the industry. More than 1,000 pubs offering takeaway and delivery services are searchable via pub directory WhatPub, while almost 600 breweries and more than 100 cideries are listed via the Pulling Together webpage. CAMRA national director Ben Wilkinson said: “Many pubs are relying on our ongoing support to keep afloat right now, and the best way we can ensure they still exist once the restrictions are lifted is to keep giving them our business.” CAMRA has also launched an online virtual pub called the Red (On)Lion to help combat loneliness and social isolation during the lock-down, which is open for anyone to use. Visitors to the Red (On)Lion are encouraged to share what they’re drinking when they log in to show how they’re continuing to support the trade during the crisis.

Job vacancies in UK hospitality sector down 66%: Job vacancies in the hospitality sector in the UK have dropped 66% in the year to date as the coronavirus pandemic continues to disrupt the market across the globe. The sector has been the hardest hit industry as vacancies across the board descend to their lowest levels in more than eight years, according to job search engine Adzuna. The latest findings show the UK has lost 35% of advertised vacancies year-to-date. The number of open vacancies in hospitality has dropped from 51,998 to 18,645 across Britain this year. Hospitality positions across the globe have dropped 34% but these figures will be reflected by the different phases of the pandemic each country is in at any given time said Adzuna.

Small brewers report beer sales down 82% with many struggling to survive: Beer sales are down on average by 82% since the outbreak of coronavirus, with many businesses struggling to survive, according to a survey of small independent breweries across the UK. Eight out of ten brewers do not believe the government is doing enough to support them, with more than half (54%) unable to access any government support. Almost a third (29%) are now considering redundancies, the survey of 282 UK breweries by the Society of Independent Brewers (SIBA) revealed. Despite beer production being part of the food supply chain – meaning brewers are designated key workers – with pubs, bars and restaurants closed the main route to market for independent breweries has been entirely cut-off, leading to 65% of breweries stopping production altogether. SIBA chief executive James Calder said: “Unlike the global beer brands that can supply supermarkets in great volume, small independent breweries sell the majority of their beer through pubs, bars and restaurants, meaning the lock-down measures have hit them much harder. While many have launched local delivery services or online shops to try to stay afloat, the increase in online sales is a drop in the ocean compared with the overall decrease their beer sales have seen. Pubs, bars and restaurants have been receiving help from the government, but none of the same schemes apply to our small breweries that saw their sales fall off a cliff almost overnight. They urgently need a package of measures to keep them going otherwise many won’t be able to reopen.”

US restaurant like-for-likes show first improvement: Like-for-like sales at US restaurants improved slightly in the week ended 5 April, down 62.3% on the previous year but marking a 4.7% increase from the prior week, according to data from Black Box Intelligence, which is based on weekly sales from more than 47,000 restaurants that represent $75bn in annual revenue. It marked the best week for restaurants since the coronavirus crisis became widespread in the US in mid-March. “There are some signs the sales decline may have reached the bottom in the past few weeks and the industry is now experiencing some very slow improvement,” Black Box said. While limited-service restaurant brands continued seeing average spend grow rapidly year-on-year, full-service brands saw “a sharp drop”. The biggest declines in like-for-like sales continued to be in fine dining and family dining, with both segments logging declines of more than 80% during the week ended 5 April. Black Box added: “Pizza concepts continue to experience the smallest decline in comparable sales, but there is an encouraging sign in the fact all cuisine types saw their comparable sales decline at a slower pace during the past week.” The company found 67% of restaurant companies had furloughed some employees and 22% had laid off staff. Almost half of companies have cut the base pay of their executives. Last week the National Restaurant Association (NRA) asked Congress for more help with the industry approaching $100bn in lost revenue. The NRA has written to Congress asking for revisions to the $349bn Paycheck Protection loan programme including lowering the cap spent on payroll so more funds can be used for expenses such as rent payments — a move that will give restaurants “a fighting chance” to reopen once restrictions are lifted. The NRA projects sales to decline by $225bn if restaurants are closed for 90 days and job losses to reach a high of seven million, or little under half of those employed in the industry. It said revenue losses will total $100bn by the end of April. 

Cask Marque issues maintenance schedule covering dispense equipment and beer lines: Cask Marque, the industry watchdog for quality beer, has issued close-down procedures and produced a routine maintenance schedule covering dispense equipment and beer lines. It comes amid increasing concern within the industry that pubs may not have closed down the dispense equipment correctly and carried out routine maintenance, resulting in damaged beer lines. This would mean costly equipment replacement and delays when reopening. Cask Marque director Paul Nunny said routine maintenance should be undertaken fortnightly. He added: “Managed houses are a particular concern with regard to dispense equipment as many pub managers may have been furloughed. This then raises the question – have the beer lines been cleaned as part of the shut-down procedure and who, if the manager is not allowed to work, will undertake routine maintenance of the equipment? Tenants and free houses must also take appropriate action to help themselves. Once pubs reopen, technical services will be under enormous pressure to service dispense equipment. There are bound to be delays in call outs that may result in preventing pubs trading when allowed to open once again.”

Instagram tests the purchase of food from the stories and photos: Instagram has partnered with Los Angeles-based restaurant ordering platform ChowNow to make pictures and stories from local restaurants shoppable by adding "Order Food" buttons and stickers to their images and videos. The buttons and stickers will link directly to ChowNow to complete order flow. Followers can also re-share stickers on their own Instagram Stories to drive awareness. “ChowNow has mobilised all its resources to help local restaurants survive and ultimately thrive, launching new products and services in record time,” Chris Webb, ChowNow’s chief executive and co-founder, told TechCrunch. “This Instagram feature is yet another valuable tool we’re offering our restaurant partners — at no cost to the restaurants — to help them drive more revenue and boost order volume.”

Job of the day: COREcruitment is supporting a quality small pub group that is keen to meet passionate operations managers for an upcoming position. The business operates a collection of properties across London and the south and has a focus on great quality produce, ever-changing menus and friendly service. It is keen to look at potentially two openings and to support this expansion feels a hands-on, growth focused operations manager will be an excellent addition to the team. Applicants need to have extensive, multi-site operations experience from the food-led pub sector. The salary is circa £70,000 plus benefits. Anyone interested can email 
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Almost half of Wimpy’s 68-strong estate operating takeaway or delivery, opens new site: Burger brand Wimpy is bucking the downward trend on the high street having opened a new restaurant this week, while also adding to the number of sites now offering home delivery and pushing ahead with refurbishment plans. Almost 50% of its 68-strong estate nationwide is now operating home delivery or takeaway services and general manager Chris Woolfenden said the company was “well placed” to keep serving customers. “Since the lock-down was announced, our franchisees have really stepped up to the mark,” he said. “The fact many of them are family-owned businesses means they are already working together under one roof and they simply want to make sure they can meet demand and give their customers what they want. In addition to takeaways, working with our home delivery partners has been a game changer. It’s clear consumers are turning to delivery services to brighten up their mealtimes and remind them of the ‘good old days’ by enjoying the brands they love in their own home.” Wimpy opened in Orpington on Easter Monday (13 April), marking a return to the town after 35 years. Joint franchisee Nico Sokoli, an experienced chef and manager who is running the new operation, said: “From the moment we opened, the response has been amazing. Obviously this wasn’t the big grand opening we had initially planned, but we think providing a takeaway and home delivery service for local people is really important right now and the people of Orpington are proving us right.”

Starbucks tests variety of service options as it prepares for ‘new, dynamic period’: Starbucks has been testing a variety of service options as it prepares to adapt for the next stage of the coronavirus pandemic based on its experiences in China. Chief executive Kevin Johnson said the company was ready for this “new, dynamic period” as some governments look to start lifting restrictions with case numbers beginning to flatten. He said: “As we have experienced in China, we are now transitioning to a new phase that can best be described as ‘monitor and adapt’. This means every community will continue to monitor the coronavirus situation and people and businesses in that community will begin to adapt. Gradually, more schools and businesses will open. What does this mean for Starbucks? As was the case in China, this means we will gradually expand and shift the customer experiences we enable in our stores. For example, some Starbucks stores will continue as drive-thru only, others may utilise the mobile ordering experience for contactless pick-up and delivery and others may reopen for ‘to-go’ ordering. As we experienced in China, this will be a journey and we are thoughtfully preparing for this next phase as we adapt in the US. More than 60% of our store formats in the US include a drive-thru, and about 80% of all customer orders were placed ‘on-the-go’ even prior to coronavirus. We have tested a variety of service options in more than 300 stores across the US over the past few weeks, including contactless service, entryway pick-up, kerbside delivery and at-home delivery. We are finding new, innovative ways to serve our communities safely while working hard to exceed public health requirements and adjust to new customer expectations. Thanks to our digital leadership, we are positioned to evolve the Starbucks experience for millions of our loyal customers.” Johnson said the company would also be looking further at its approach to pay and benefits as it continued to prioritise staff welfare “during this critical period”. He added: “As we monitor and adapt, we will support our communities, and we will grow stronger as Starbucks partners. That is Starbucks resilience at its best.”

Just Eat signs up circa 3,000 new restaurants since lock-down: Just Eat has said almost 3,000 restaurants have signed up to its website since the coronavirus lock-down. In an interview with The Telegraph, Just Eat UK managing director Andrew Kenny said more than 35,000 firms were now operating on the platform. Kenny said new partners include dozens of chains as well as independent neighbourhood restaurants. However, he warned the firm has been hit by big-name brands such as McDonald's and Greggs suspending their operations. Over the past week, Just Eat has handed more than £2.8m of fees back to independent restaurants and takeaways as part of a package worth more than £10m to help struggling partner companies. He added government efforts to shore up the restaurant industry have been heartening, despite widespread concern vital cash was not yet reaching those companies most in need of it. Meanwhile, Dutch online food ordering company can proceed with its integration of Just Eat after the UK competition watchdog lifted an enforcement order. bought Just Eat for £6.25bn in January after a bidding war. The companies had been banned from integrating under the order although the Competition and Markets Authority continues to investigate whether might not have re-entered the British market, which it quit in 2016, had it not bought Just Eat. The first phase of the investigation is expected to be completed by 19 May. 

Homeslice reopens Marylebone site for delivery and collection: London-based better pizza brand Homeslice has reopened its site in Marylebone to offer delivery and pre-ordered collection. The company has also launched a weekly charity raffle, with all proceeds to go to NHS Charities Together. The business said: “We have reorganised our restaurant to make sure everyone will be safe, with proper social distancing and rigorous hygiene protocols. We’re putting our most experienced people in place because it’s about trust and because they just want to make great pizza again.”

The Chestnut Group to provide meals for front line key NHS workers: East Anglian-based pub and restaurant company The Chestnut Group has teamed up with Food4Heroes to help provide meals for front line key NHS workers. The not-for-profit initiative has been launched to initially provide 300 free meals per week to NHS workers at the Norfolk & Norwich University Hospital critical care unit, with the aim of adding more meals and hospitals in the region as funding increases. Funded entirely by the goodwill of the local community, Chestnut Group has launched the “Giving Tree”, which is a newly established arm of the business dedicated to supporting its local communities with “not-for-profit” initiatives. House builder Hopkins Homes and law firm Birketts have provided the initial funding to kick-start the initiative. Philip Turner, founder of The Chestnut Group, said: “We have been inspired by many heart-warming initiatives across the UK and as East Anglia is our heartland, it makes complete sense to support our local front line teams as best we can. There has already been some great response by businesses and local people in the region.”

Mindful Chef launches next-day recipe box delivery service: Mindful Chef, the healthy recipe box service, is launching what it claims to be the UK’s first next day delivery service, selling its new eponymous Care Box. Available to purchase from the Mindful Chef online store from Sunday (19 April), the company said people can order one-off care boxes for their loved ones with guaranteed next day delivery, if ordered before 7pm. No subscription is required and customers can choose between a meat or plant-based box. Each Mindful Chef Care Box includes three meals for two people, with recipes including Chipotle pork meatballs with Mexican-style rice, and coconut, butter bean and mushroom stroganoff. Mindful Chef chief executive Tim Lee said: “The recipients of these boxes are often highly vulnerable and unable to leave the house or simply struggling to find the food they need in the shops.” 

Bite Me Burger launches contactless delivery service: Bite Me Burger, the David Michaels-led concept, has opened a new contactless delivery service in London. It serves households in a five-mile radius of its Bermondsey and Hackney kitchens via UberEats, six days a week. Delivery boxes are available in various sizes. Meanwhile, Orasay, which is run by Jackson Boxer and Andrew Clarke, is offering delivery within a five-mile radius of its Notting Hill restaurant. Boxer told Hot Dinners: “I change the menu every day based on what I feel like cooking, but not a total overhaul. It's very much the food I love to cook at home, for the people I hold dearest – I'm trying to figure out how to give people that special sense of being in a restaurant where the team really care about looking after you, but in a time of social distancing and isolation.”

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