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Tue 21st Apr 2020 - Propel Tuesday News Briefing

Story of the Day:

Karen Jones in talks to take back handful of Food & Fuel sites: Karen Jones, the executive chair of Prezzo, is in talks to take back up to five of the 12 Food & Fuel sites The Restaurant Group (TRG) placed into administration last month, Propel has learned. Jones sold the then 11-strong Food & Fuel, which she co-founded in 2006, to TRG in September 2018 for £14.9m. It is also thought Signet Hotel Group, the new vehicle set up late last year by Hector Ross, former chief operating officer of gastro-pub operator Bel & the Dragon, is in talks on two of the Food & Fuel sites. Food & Fuel comprised leasehold pubs and cafe bars predominately in affluent London neighbourhoods, providing a premium offering tailored to local markets. At the time of its acquisition by TRG, the business comprised eight gastro-pubs, one sports pub and two cafe bars under the Coco Momo name. After acquiring the business, TRG added the former Cafe Rouge site on the Strand-On-The-Green to the Food & Fuel portfolio, reopening the site under the name The Steam Packet last year. Last month TRG appointed restructuring firm RSM as administrator to Food & Fuel and filed a notice of its intention to do the same with Chiquito, which owns 61 Chiquito outlets. A TRG spokesman said at the time: “As we announced in our update to the market on 18 March, covid-19 has had an immediate and significant impact on trading across the group. We have conducted a review of the performance of our business divisions, with a particular focus on the expected cash generation profile of each of our business units. The group believes Food & Fuel and Chiquito will achieve negative Ebitda in the financial year ending 27 December 2020. The decisions have been incredibly difficult and we recognise the significant impact on all our colleagues that are affected. We thank them for their hard work and commitment during these testing times.” Jones also operates Frontier Pubs, the Ei Group Managed Investment joint venture, through her Pioneer Hospitality vehicle.

Industry News:

Sponsored story – K-Box develops solution to maximise delivery sales: Developing its network of more than 120 partner locations across the UK in 2019, K-Box maximises under-utilised kitchens and labour, bringing them into its “host” kitchen network, to help deliver additional sales in a booming delivery market. K-Box founder Salima Vellani said: “We recognised there was a need to create additional income from our own restaurant kitchens, so with our team of development chefs we got to work on developing delivery-only brands that could satisfy the growing demand. We now have more than 15 brands within our portfolio.” By offering training, technology and supply chain support, along with local demographic analysis and brand matching, K-Box is set up to support host sites with everything they need to maximise the delivery market place opportunity. With K-Box’s proven track record and ability to adapt to the needs of partner sites, it is seeing its host kitchen network grow dramatically globally. A key part of its network has remained operational during the current coronavirus outbreak, continuing to serve communities and deliver sales. This both sustains and protects these businesses for the future. For more information about joining the network, visit If you have information you would like to feature in a sponsored message, email

BBPA outlines specific support pubs need to survive extended lock-down: The British Beer & Pub Association (BBPA) has outlined specific support it wants the government to give pubs to ensure they can survive an extended lock-down. The trade body’s plea comes after cabinet minister Michael Gove warned pubs would be “among the last” to see restrictions placed upon them relaxed. The BBPA said the government should extend and expand its business grant support scheme specifically for pubs, so they can get further cash flow while they remain closed. It has called on the government to expand the threshold for grants to above £51,000 rateable value for pubs. An extension of the furlough scheme for pubs would also be pivotal while it also specified wavering state aid was another vital measure the government should action. BBPA chief executive Emma McClarkin said: “If pubs are going to be the last to reopen, then it’s only right the government gives extra support to them to help ensure their survival. When this crisis is over we will all want to go to the pub, so it’s vital the government does everything it can to help them right now.”

More than 140,000 businesses apply for CJRS on opening day: More than 140,000 business have applied for the government’s Coronavirus Job Retention Scheme on its opening day, chancellor Rishi Sunak has confirmed. Employers are able to claim a grant from the government to claim 80% of an employees pay, up to £2,500 per month. HM Revenue & Customs chief executive Jim Harra previously told the BBC's Today programme employers had made 67,000 job claims in the first 30 minutes. Last week the government extended the scheme until the end of June. It was originally open for three months and backdated from 1 March. Sunak has said he would keep the scheme under review and extend it if necessary. It followed the extension last week of the lock-down measures by the government for at least a further three weeks.

Sector needs to address ‘critical’ issue of infrastructure, warns Backman: Sector businesses need to address the “critical” issue of their infrastructure while they remain closed or risk implications when they start up again, according to industry analyst Peter Backman. He said: “This is primarily an issue of human resources – what is happening to furloughed staff? Will they want to (or will they be able to) return when businesses start trading again? ‘Hardware’ also needs looking after – what happens to equipment that is unused for months? Buildings need attention – will they be getting it? Will relationships between foodservice businesses and their suppliers be strengthened or weakened during the lock-down? And what about relationships with landlords? And suppliers of finance? What are the implications for businesses when they start up again?”

Brits turning to home cooking as they use money saved by not eating out on equipment: Brits are turning to home cooking as they adjust to life under lock-down. They appear to be using money saved by not eating out to invest in cooking equipment and smarter models, according to research by GfK. Sales of some kitchen appliances have shot up, with purchases of deep fryers showing 76.4% growth in value for the week ending 4 April, compared with the previous year. Sales of hot drinks makers have risen 65.4%; while sandwich makers, waffle makers and grills served up 62.1% value growth. Meanwhile, purchases of food stand mixers have leaped 218.6%, hand mixers by 105.3% and food processors by 43.7% as Brits take up home baking. Kelly Whitwick, UK retail lead for market insights at GfK, said: “Looking across these home cooking appliances, the average price is showing an upward trajectory since lock-down started. It seems we are using the money saved from not dining out to invest in premium cooking equipment and smarter models.”

London mayor launches ‘Pay It Forward’ scheme to aid SMEs: London mayor Sadiq Khan has launched “Pay It Forward”, a scheme to help people who want to support their local independent shops, restaurants, cafes, bars and creatives. The mayor has linked up with Crowdfunder to create the free Pay It Forward initiative. Businesses can offer customers the option to buy goods and services in advance based on a promise to deliver in the future. Khan said: “Small businesses are facing enormous challenges as a result of the fight against coronavirus – not least a significant drop in their cash flow. Londoners value their local independent shops, restaurants, cafes, bars and other small businesses and I’m confident this goodwill means many will be happy to pay for goods and services now so they can continue to enjoy them when things get back to normal. I’m clear the economic impact of the outbreak and the restrictions brought in to tackle it will be far-reaching and long-lasting – so I’m determined to do all I can to support the economy over the coming weeks and months.”

Job of the day: COREcruitment is supporting a contract catering and foodservice business as it looks to appoint an account director. This is a key contract, predominantly in London with circa £8m in revenue turnover across multiple outlets. The individual will be a seasoned expert with knowledge of quality food and beverage, contract account management, while reception and concierge experience would be ideal. The salary is circa £75,000. Anyone interested can contact with their CV or profile.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

BrewDog brings back door-to-door beer delivery service, David McDowall to feature in latest ‘navigating the coronavirus’ video: Scottish brewer and retailer BrewDog is bringing back its door-to-door beer delivery service. The first BrewDog locations to offer the on-demand beer drops will be in Aberdeen, Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester, Reading and Sheffield. Sites will also be offering a limited food menu featuring BrewDog classics such as burgers and wings. The fresh beer offering will initially be BrewDog’s flagship Punk IPA and Lost Lager, with other canned and bottled beer available. NHS workers will receive 50% off their order along with a bottle of hand sanitiser. The decision to relaunch the delivery service has allowed some of the company’s staff, who live locally to their BrewDog bar, to opt into returning to work. BrewDog will provide each team member with masks and gloves, as well as refresher training on sanitation protocol, and physical distancing measures. Meanwhile, BrewDog chief operating officer David McDowall will feature in the latest of Propel's video interviews with leading operators about navigating the coronavirus crisis. McDowall talks to Propel insights editor Mark Wingett about how the business went on the front foot to survive, learning from its international estate, and what the industry and the government needs to do next so the hospitality sector has a bright future. The video will be released on Tuesday (21 April). Readers can support independent sector journalism and get their news 12 hours early (at 7pm each night) with a Propel Premium subscription. It costs £395 plus VAT per annum for operators and £495 plus VAT for suppliers. Email to sign up.

Five Guys to reopen further parts of its UK estate: Five Guys, the US better burger brand, has reopened a number of sites across London and the UK, offering a full menu available either for delivery and click-and-collect services. The 100-strong UK business, which had kept 13 sites across the country operating throughout lock-down for delivery and takeout, has reopened a further six sites – in St Paul’s and Baker Street in London, Edinburgh Fort Kinnaird, Edinburgh Fountain Park, Plymouth and Liverpool Queen Square. It will follow this by opening its site in Guildford on Wednesday (22 April). The company said click-and-collect orders will all be pre-paid, with the restaurants operating strict social distancing policies for those using the collection option. Five Guys UK chief executive John Eckbert told the Evening Standard: “We have adopted a phased approach to reopening Five Guys stores, adhering to government advice and ensuring the safety of our customers and crew is paramount. To date a small number of stores have remained open for click-and-collect and Deliveroo orders only and while this has been in operation, we’re proud of how our crew members have supported local hospitals and key front line workers across the UK.”

Goodbody – Marston’s has necessary funds to continue paying bondholders despite securing ‘precautionary’ waiver: Goodbody leisure analyst Paul Ruddy has said Marston’s has the necessary funds to continue paying bondholders despite confirming it has secured a “precautionary” waiver. The company has secured the waiver of any breach that might arise, under the 30-day suspension of business and operations provision, until 29 May. There will be an automatic extension to 15 June in certain circumstances while Marston’s said it was discussing whether there was a need to consult with bondholders on further covenant waivers. Ruddy said: “Pre-coronavirus we had expected net debt of £1.35bn with net debt to Ebitda of circa six times at year end FY20. At year end FY19 its £1.4bn of net debt was made up of £745m of securitised debt, £335m of bank debt, circa £40m of cash and circa £350m of finance leases and lease related borrowings. It had property plant and equipment of circa £2.4bn. Within the securitisation, the group has circa £75m of debt service required this year and an undrawn £120m revolving credit facility so bondholders will continue to be paid. At year end FY19 it had a liquidity facility of £360m (bank borrowings were £335m). Given the scale of the challenges facing the sector we would avoid names with higher leverage.”

Shake Shack returns $10m coronavirus loan: Shake Shack, one of several large US restaurant companies that got federal loans through the coronavirus stimulus law meant to help small businesses, is giving all $10m back. The loan programme set aside $349bn to help small businesses keep their workers on the payroll. Less than two weeks after it started, the programme has already run out of money. In a statement on LinkedIn, Danny Meyer, Shake Shack's founder and chief executive of its parent company, Union Square Hospitality Group, and Randy Garutti, Shake Shack's chief executive, said the company pursued the loan because the law stipulated it was open to any restaurant site with no more than 500 employees, which fits Shake Shack's 189 individual US restaurants. “The programme came with no user manual and it was extremely confusing,” they said. The programme offered to forgive the loans if recipients rehired furloughed and laid-off workers by June, and because Shake Shack and its parent company had already furloughed hundreds of employees, Meyer and Garutti said they gambled “the best chance of keeping our teams working, off the unemployment line and hiring back our furloughed and laid off employees, would be to apply now and hope things would be clarified in time”. But they said they had no idea the fund would dry up so quickly, so after securing separate funding last week, “we've decided to immediately return the entire $10m” so restaurants that “need it most can get it now”. The duo also urged Congress to ensure “all restaurants no matter their size have equal ability to get back on their feet and hire back their teams”.

D&D London to provide more than 2,000 meals a day to key workers across UK: Restaurant operator D&D London is supporting NHS charities and hospitals by providing more than 2,000 free meals a day to key workers across the UK. Led by Alexander & Björck’s head chef Henry Osborn, D&D London is utilising its UK restaurants with help from many of its furloughed staff. A combination of volunteers including D&D London chefs and their restaurant brigades, management and head office employees are operating from Butlers Wharf Chophouse and Radici in London as well as 20 Stories in Manchester to prepare and deliver fresh meals daily, to hospitals and NHS staff. With support from The Hildon Foundation, D&D London is feeding front line workers at West Middlesex and St Barts hospitals in London as well as Manchester Royal Infirmary and the St Johns Ambulance. In addition, the operation at Radici, led by chef patron Francesco Mazzei, is working with the #HelpThemHelpUs charity; a network founded and staffed by front line NHS workers, Dr Dominic Pimenta and ex-Chelsea footballer Joe Cole. The kitchen of D&D London’s Le Pont de la Tour is also being used by Michelin-starred chef Larry Jayasekara and his team, who are preparing and delivering hot meals daily to the front line teams of University College Hospitals. D&D London will be expanding its volunteering efforts across the UK and to its New York restaurant, Queensyard, next week.

Mercato Metropolitano launches initiative to support new F&B projects: London-based Italian street food market Mercato Metropolitano has launched an initiative under the title DREAMM, where it plans to identify and incubate new food and non-food concepts and ideas. Those chosen for the incubation programme will be able to access financial support packages worth up to £4,000, including capital to kick-start their idea, thanks to support by the group’s own fund and the Peabody Community Foundation. The company stated: “Do you have a cool, tasty food idea you want to pilot? Maybe a new sustainability concept you want to test out? What about an amazing entertainment offering or a community-based cultural startup? We want to help you make it happen. Come and pitch your ideas for a chance to join our MMovement and turn your DREAMM project into reality!” If projects are selected they will go through the group’s incubation programme, which also includes tailored mentorship and support, a chance to spend three months in the Mercato Metropolitano incubation shack in one of its markets, an opportunity to become a full-time “TeaMMate” at Mercato Metropolitano. Those looking to participate, need to create a 30 to 60-second video with a short-written description, explaining what their dream idea is and how they imagine developing it with Mercato Metropolitano and posting it on Instagram or Twitter with the hashtags #DreaMM2020 and #JointheMMovement by Friday (24 April). The Mercato Metropolitano team will select its top ten ideas that will move on to the online “DreaMM Pitch Day”, in May. The company’s Elephant & Castle and Mayfair food markets are temporarily closed. However, in line with its business focus on its communities, the company continues to operate the deli in each of the sites from 11am to 7pm Monday to Saturday and between noon and 6pm on Sunday. The company is also hosting workshops and classes as well as offering retail products online along with a community kitchen series.

Subway enhances safety protocols as franchisees launch market place to make sandwiches at home: Subway is enhancing cleaning procedures and sourcing masks and protective shields for workers while franchisees are offering ingredients to allow customers to make its sandwiches at home. The company said it was working to “mitigate the strains and stresses” being placed on its franchisees during the “ever-evolving landscape” of the coronavirus pandemic. In an update, Subway said it was providing financial relief and support to its franchise community as well as reinforcing health and food safety standards, such as workers wearing gloves and sandwiches being individually wrapped and sealed. The company also “introduced enhanced procedures, such as hourly restaurant cleanings, especially in high-touch areas such as door handles and credit card terminals”, reports Nation’s Restaurant News. Subway said it has also issued guidance for wellness checks of restaurant staff at the start of each shift. Earlier this month Subway began testing “Subway Grocery” sales in 100 Southern California restaurants, and the company said other franchisees had now launched “Subway market place”, which allowed customers to buy bread and pre-packaged meat and vegetables to make sandwiches at home.

Old Chang Kee reopens sites for delivery: Singaporean snack and street food brand Old Chang Kee has reopened for delivery. The company, which is known for its curry puffs, is offering the service from its Covent Garden and Fitzrovia sites across Greater London. The restaurant's curries – Singapore chicken curry; chicken rendang; tofu and mixed vegetable curry; and dry chicken curry – are also available and feed two people, but customers need to add their own rice, reports Hot Dinners. Founded in 1956, Old Chang Kee operates more than 100 outlets, mainly in Singapore, Malaysia, Indonesia and Australia.

EasyHotel set to delist from LSE next month: EasyHotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has said it expects to delist from the London Stock Exchange on 19 May after the company agreed to a takeover by real estate investor Ivanhoé Cambridge and property fund manager Icamap in August. The company stated: “The board believes the cancellation is in the best interests of the company and shareholders as a whole.” Citrus Holdco – a company owned by a consortium comprising Cadim Fonds, which is part of Ivanhoé Cambridge, and Icamap Investments – that currently owns about 71.2% of EasyHotel shares, was interesting in acquiring a 94.6% stake in EasyHotel. Citrus Holdco's said it was willing to pay a price of up to 70p a share until 1pm on 18 May to acquire the remaining shares, enabling shareholders to sell shares at a premium of up to approximately 21.7% to the closing price per share on Friday (17 April).

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