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Wed 29th Apr 2020 - Propel Wednesday News Briefing

Story of the Day:

Luke Johnson – ‘I fear for this industry’: Sector investor Luke Johnson has said he fears for the future of the hospitality industry, and of the businesses he had spoken to about possible investment “a lot are very frightened”. Almost two weeks ago Johnson called on operators of “established, high-quality UK hospitality businesses seeking added value equity capital” to contact him. In a tweet, Johnson, who currently backs Gail’s Bakery, Lussmanns Fish & Grill and All Star Lanes, among others, said he was willing to invest £500,000 to £5m in companies that fitted that criteria, and ready to “move quickly if terms were realistic”. Speaking to Sky News on Tuesday (28 April), Johnson said: “A number of people contacted me and a number might be interesting but they are all very nervous because the hospitality, leisure, entertainment and travel sectors are possibly the worst hit of all and a lot of people are very frightened. There has already been a number of insolvencies and there will be plenty more companies go bankrupt. There will be thousands, possibly millions, of job losses, because almost three million people work in the sector. In theory it is worth £120bn a year. It is an enormous tax generator, it is very important for the economy as a whole, and the fear there is not just businesses won’t be able to trade but even when they are allowed to reopen the restrictions placed on them by social distancing and so forth will mean it is just uneconomical to try to trade. I fear for this industry that I have been involved with for 30 years.” On the possibility of people having to wear masks in public, Johnson said: “I think it is pretty frightening. People go out to eat and drink in pubs and restaurants because they want to have fun, they want to celebrate and relax. Human beings are fundamentally social creatures – we can’t live our entire lives through virtual media. I do think we need to adjust to this virus. It is unlikely to affect the vast majority of the population and I think society needs to adapt. We can’t live our lives in fear, going around all the time in masks with social distancing, it is neither practical, nor really is it an existence.”

Industry News:

Detox Kitchen founder Lily Simpson to feature in next ‘navigating the coronavirus’ interview: In the latest of Propel's video interviews with leading operators about how they are “navigating the coronavirus crisis”, Elliotts chief executive Ann Elliott talks to Lily Simpson, founder of Detox Kitchen, about meeting her customers’ needs through delivering vegetable boxes and ready to eat meals, how she was due to sign for her third site the day after lock-down, and communicating with her team and supply chain. The video will be released on Wednesday (29 April). Meanwhile, 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.
Elliotts is a Propel BeatTheVirus campaign member

BII calls on chancellor to extend support to pubs following member survey: The British Institute of Innkeeping (BII) has sent a letter to chancellor Rishi Sunak, detailing the results of its member survey and the impact coronavirus has had on the livelihoods of licensees over the past six weeks. The survey, which comprised 35 questions and had more than 300 completed responses, found while 65% had now received their eligible grant, 20% of members were not currently eligible as the rateable value of their property is above £51,000. It also showed only 3% had received a loan via the Coronavirus Business Intervention Loan Scheme (CBILS). The letter stated: “Members remain very concerned on taking further debt into low margin businesses and 45% have chosen not to apply at this time. For those that have applied, banks in the CBILS scheme have been very reluctant to lend to pubs.” The BII said 30% of its members are waiting for the self-employment support payable in June, however, 50% are not eligible for any additional government support. In terms of the Coronavirus Job Retention Scheme (CJRS), 90% of BII members have furloughed team members with 11% having made redundancies. A total of 88% have applied for their furlough payments with 7% having been paid. The BII said members have raised concerns around the ability to implement any social distancing protocols and maintain them; bear the costs of reopening; replenishing stock and higher staff costs to manage protocols; and being able to operate profitably at significantly reduced turnover. The BII said if this is the case, support with grants, the CJRS and loans must continue. Meanwhile, the British Beer & Pub Association (BBPA) has urged the government to recognise more specific support is needed for pubs, after France announced plans to end its own lock-down and confirmed bars and restaurants won’t open for months. The BBPA has called on prime minister Boris Johnson to back British pubs, by giving them the specific support they need to get through the lock-down and beyond. 

Britons could face ‘two or three pint limit’ when pubs reopen to aid social distancing: Pubs could reopen if landlords “rationed beer to two or three pints per customer” before asking them to go home, to help with social distance measures, it has been argued. Lock-down adviser professor Eyal Winter, of Lancaster University, said people were “starving” for pubs, which he described as “an important part of British culture”. Winter, an economist advising politicians on how to ease the coronavirus restrictions, said social distancing would have to be enforced if pubs reopen. One suggestion involves staggering the number going into them over the course of a day to avoid them getting “very full” at once. Winter also told The Guardian those flouting the rules should be fined amid fears some people would behave unacceptably as soon as lock-down measures cease. And he said theatres and cinemas could reopen but only selling half as many tickets as normal with gaps in seating and higher prices to cover lower revenue. Winter said Britain should follow the approach of the Germans with clear dates and targets on reducing restrictions as the country leaves the lock-down. At the weekend, another government adviser, professor Robert Dingwall, said beer gardens should be allowed to reopen to drinkers. “If it is a sunny weekend afternoon and the pub has a garden and the landlords are prepared to accept responsibility for not overcrowding that garden, I see no particular reason why it should not reopen,” he told BBC Radio 4's Today programme.

Texas to allow restaurants to reopen at 25% of dine-in capacity: Texas will allow restaurants to reopen from coronavirus closures on Friday (1 May), but they will be limited to 25% of capacity for dine-in service. Governor Greg Abbott announced at a press conference he would allow his stay-at-home order to expire on Thursday (30 April) and issue a new one to allow the reopenings, which also include shopping centres, retail stores and cinemas. But he said all food courts would remain closed. During phase two of Abbott's “Open Texas” plan, which is expected to start on or after 18 May, businesses that open on 1 May could expand capacity to 50%, reports NBC. Earlier this month The Texas Restaurant Association estimated 688,000 restaurant employees had been laid off or furloughed since the beginning of the coronavirus outbreak. It said that represented at least 61% of the 1.2 million employees that were working at Texas’ eating and drinking outlets in February. Abbott said bars, salons, gyms and barber shops are still ordered to remain closed and might be able to resume operations in mid-May.

Budweiser Brewing Group pub relief fund hits £500,000 mark: Save Pub Life, Budweiser Brewing Group’s programme to support the trade during closure, has hit the milestone of £500,000 in funding to pubs. The company, the UK and Ireland arm of Anheuser-Busch InBev, launched the initiative to provide urgent financial support to the nation’s pubs following their closure in March. The scheme allows pub-goers to buy a gift card to spend at their local pub once it reopens. Budweiser Brewing Group has pledged to match the value of the gift cards up to a combined total of £1m. Since launching four weeks ago, more than 1,300 pubs across the country have signed up to the scheme. Pub-goers have purchased more than 9,500 gift cards, and the scheme remains open to new pubs and purchases. Budweiser Brewing Group president Paula Lindenberg said: “We launched Save Pub Life to help support the future of this vitally important industry, and are thrilled the scheme has made an impact less than a month from launch. Our goal is to help as many pubs as possible.”

Job of the day: COREcruitment is supporting a luxury hospitality business as it searches for a new marketing director. The business has a reputation for high-end food and beverage and excellent entertainment. Based in London, the marketing director will be responsible for the implementation and development of the marketing and PR plan in order to promote venues and support future business development. A strong and diverse “luxury brands” background and restaurant experience is desirable. Broad knowledge about marketing strategies and the current UK market is essential. The salary is circa £80,000, plus benefits. Anyone interested can email with their CV or profile.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

TGI Friday’s to trial click-and-collect and delivery from next week: TGI Friday’s is to trial click-and-collect as well as relaunch delivery from 24 of its 87 stores from next week, Propel has learned. The click-and-collect service, which will be introduced on Wednesday, 6 May, will be available from sites where TGI Friday’s has its own dedicated car park and will be a “controlled” test. Customers will book a collection slot and order online and when they arrive at the car park their food will be put straight into the boot of their vehicle by a member of TGI Friday’s team. There will be a queuing system in place using clear signage. At the same time, TGI Friday’s will relaunch its delivery service at the 24 locations with Deliveroo and Just Eat, where applicable. The menu in both cases will be limited to guest favourites including its traditional burgers and ribs along with a selection of appetisers. Strict social distancing measures will be in place to keep employees safe, including the use of protective screens between staff and pick-up drivers. There will also be regular cleaning of surfaces and equipment. TGI Friday’s chief executive Robert B Cook said the website will be set up so each location can only take three click-and-collect orders every ten minutes. Both click-and-collect and delivery will be available daily between noon and 9pm. Cook said: “This is very much a controlled test and we’ll review it after three weeks. Many of our regular guests have been asking when we will be available again. Using a similar click-and-collect kerbside model to TGI Friday’s in the US, and with delivery, we very much look forward to serving their favourites again while ensuring we adhere to current government guidelines.” 

Ruddy – Google trends suggest Domino’s has reached a peak: Goodbody leisure analyst Paul Ruddy has said judging by Google trends Domino’s has reached a peak and has been gradually declining in search popularity. Ruddy said: “So far in 2020 Domino’s has been searched 13.5% more than the previous year in the UK and is up 40% in the second quarter. However, judging by the trend from the past 90 days it appears Domino's has reached a peak and has since been gradually declining in search popularity. App downloads will skew this somewhat, which are not included, but there is also likely an element of weaker macro and a partial normalisation of consumer trends. For us Domino's key competitive advantage is it can profitably deliver hot food at scale in the UK with the support of its franchisees. This has been particularly manifest in the early part of the covid-19 crisis as most other delivery businesses were forced to close. We would expect it to continue to get a like-for-like benefit from the closures impacting the rest of the sector while severe restrictions persist.” Ruddy’s assessment came as the business updated on the timetable of the disposal of its Norway business. The deal, subject to shareholder approval, is expected to complete by 27 May. The group is seeking a dispensation for the requirement to hold a general meeting, which needs to be approved by 50% of shareholders. Ruddy said: “We presume this will be a formality. This is a positive for Domino's UK shareholders given it was funding losses and capital spend. It is good to see the deal will likely complete in a timely fashion given the current covid-19-related challenges.”

Iberica launches pick-up and delivery alongside online shop: Spanish restaurant group Iberica has launched a pick-up and delivery service as well as an online shop. The company, which has restaurants in Glasgow, Leeds, London and Manchester, is offering its traditional dishes, regional specialities, deli items and larder essentials to customers in those cities. Alongside its tapas and Spanish small plates – such as confit chicken and fiery Romesco sauce, and a beetroot orange and pickled fennel salad – there is a selection of cured meat, cheese and a range of Spanish wine, sherry and cider. Customers can collect their order daily between noon and 9pm from any of Iberica’s restaurants or order for delivery via Deliveroo. Customers within a 2.5-mile radius of Iberica’s restaurants in Farringdon, Marylebone or Victoria can also order for delivery via Supper between 11am and 6pm.

Bone Daddies to reopen two sites for click-and-collect and delivery: London-based Japanese ramen bar concept Bone Daddies is to open two of its sites for click-and-collect and delivery. The company will reopen the outlets in Bermondsey and Old Street on Wednesday, 6 May. The menu will feature a selection of Bone Daddies’ signature ramens alongside the brand’s other dishes, such as Korean fried chicken wings and tofu poké. Customers can order and collect, or choose delivery via Deliveroo within a mile or so radius of either site. Orders can be placed from 5pm on weekdays and from 11.30am at weekends, with last orders 10pm daily.

Five Guys reopens further batch of sites: Five Guys, the US better burger brand, has reopened a further six sites across the UK offering a full menu available either for delivery and click-and-collect services. Last week, the company, which kept 13 sites across the country operating throughout lock-down for delivery and takeout, reopened seven sites – in St Paul’s and Baker Street in London, Edinburgh Fort Kinnaird, Edinburgh Fountain Park, Plymouth, Guildford and Liverpool Queen Square. The 100-strong brand has now opened sites in Colchester, Chelmsford, Kensington, Norwich, Reading and York while its Southampton's site will reopen on Wednesday (29 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.

Big Mamma Group to launch click-and-collect service at London restaurants: Big Mamma Group is launching a click-and-collect service at its two London restaurants, Gloria and Circolo Popolare. Both sites are being turned into a mix of a deli and pizzeria from Wednesday evening (29 April), with delivery set to follow. Dishes available will include The Big Lasagna and Gnocchi cacio e pepe along with cooked pizzas, while there will be pasta kits for customers to make at home. There will also be a produce section, offering items such as Parma ham as well as its own olive oil, flour and yeast. Big Mamma Group launched Gloria in Great Eastern Street, Shoreditch, in February last year before opening Gloria in Rathbone Place, Fitzrovia, five months later.

Morso maintaining as much as 60% of revenue through delivery ‘having prepared well in advance of lock-down’: Pasta and grappa concept Morso has managed to maintain as much as 60% of its revenue since switching to a delivery-only operation, having put plans in place “well in advance” of the government’s enforced lock-down. The company is delivering meals and essential goods from its restaurant in St John’s Wood to customers in the area as well as those within a mile of its other site in nearby Kensal Rise, which only opened a few days before it was forced to shut because of the restrictions. Commercial director Barak Peled told Propel the business began preparing at the start of March to switch to a delivery-only model having seen what was happening in other countries that were ahead of the UK in terms of the spread of the virus. He said: “We have focused on two key areas – community, and communications with customers and our team. We called everyone on our marketing list to let them know we would be staying open and doing delivery. We began bulk ordering home essentials, such as toilet roll, and listed them on our website, and staff are delivering them on cycles alongside our meals. We are continuing to talk to our customers to see what other items they want so we are looking at adding things such as bread and fruit and vegetables to the list. Through this and our partnership with Deliveroo – that is paying our share of the revenue daily, which is helping cash flow – we have managed to maintain as much as 60% of our revenue.” Morso has reached payment arrangements with most of its suppliers to pay 1% of the outstanding balance each week in return for keeping the accounts open on a cash on delivery basis, which Peled said has been “crucial to our ability to continue serving at these levels”. Staff, many of whom have been furloughed, have been given boxes of essential goods and £100 while their pay is being staggered until the money comes through from the government. Morso, which launched in 2018 following a series of pop-ups, has also had confirmation of its £25,000 grant from Camden Council – as its premises has a rateable value of less than £51,000. The business is also delivering meals weekly to St John’s Hospice. Peled added: “We can do this for as long as it takes and because we have continued to keep in touch with our community, I think we will be in an excellent position when we are able to reopen fully.”
Fallow turns to London mayor’s Pay It Forward scheme to raise funds: Fallow, the fledgling restaurant concept from chefs Jack Croft and Will Murray, who met while working at Heston Blumenthal’s two Michelin-starred restaurant Dinner, has launched a crowdfunding campaign as part of London mayor Sadiq Khan new “Pay It Forward” scheme. Fallow opened at 10 Heddon Street earlier this year and is now looking to raise £10,000 to help, in part, with a phased reopening. So far, the business has raised £8,785 from 106 supporters. Fallow said: “The covid-19 crisis started almost as quickly as we opened. Our opening week was still packed with many amazing customers but we ultimately had to make the tough decision to close. Our life savings and the first week’s revenue allowed us to pay our supplier bills and the March salaries for our staff. As we are such a new business we have not qualified for the Coronavirus Job Retention Scheme and we do not currently qualify for government grants or loans. We have to some extent fallen through the gap but with your help we will reopen stronger than ever!” The funding will be used to launch the 10 Heddon Street Shop and to deliver food to key workers, charities and the NHS. It will also help a phased reopening starting with food delivery and takeaway services and then support the reopening of Fallow as soon as possible with social distancing procedures in place. Finally, the company said it would help it “offer support to our amazing team members!” London mayor Sadiq Khan launched “Pay It Forward”, a scheme to help people who want to support their local independent shops, restaurants, cafes, bars and creatives, last week with Crowdfunder.
City Pantry launches initiative to help businesses feed teams working from home: City Pantry, the business-to-business catering market place owned by Just Eat, has launch Pantry Packages, which aimed at companies looking to provide food boxes for their teams while they work from home. Operators including Detox Kitchen and Dominique Ansel Bakery have signed up to take part in the new scheme. City Pantry said: “With most companies having to work from home these days, we’re committed to supporting you, support your teams feel a little less isolated and keep company culture going by providing food box perks while they work from home. We’ve joined together with a number of our restaurant partners to create food packages.” The company wants businesses to let it know their budget and City Pantry will work with them to choose the most appropriate box and a delivery schedule that works for its staff. Packages on offer include the Fridge-Filler Box from Detox Kitchen featuring six individually-packaged meals. There is also the Treat-your-team Box, a Dominique Ansel Bakery hamper of mini meringues.
The Sea, The Sea offers meal box delivery service: The Sea, The Sea – the Chelsea fish shop, deli and seafood bar concept launched by Bonnie Gull co-founder Alex Hunter – is offering meal box delivery. With trade restricted in-store, The Sea, The Sea is also delivering its selection of fish alongside wine, champagne, sake and spirits. Its meal-box dishes include prawn tartare with chervil, samphire and yolk sauce; turbot “chop” on the bone with cider vinegar, lemon zest and garlic caseine; and wild seabass fillet in honey, mustard and soy. The Sea, The Sea stated: “Just because you can’t eat out, doesn’t mean you can’t eat well, so we’ve introduced a range of our ‘oven ready’ and ‘ready to eat’ meal boxes. All you have to do is put it in the oven for a few minutes and you’d think (executive chef) Leo Carreira was cooking for you at home.” Hunter launched The Sea, The Sea in April last year with the Pavilion Road venue named after the Iris Murdoch novel. 

Administrators appointed to two more Signature Living businesses: Administrators have been appointed to two more businesses under the umbrella of the aparthotel developer and operator Signature Living Group. Steve Williams and Philip Armstrong, of FRP, have been appointed joint administrators of Signature Living Residential and Signature Victoria Mill. Both are special-purpose vehicles assigned to individual property development projects. Their sole purpose is the conversion of property to primarily residential use and both are part of the wider Signature Living Group. Signature Living Residential is the conversion of an office building at 60 Old Hall Street in Liverpool city centre. The development, once complete, will provide 123 apartments across nine floors. Signature Victoria Mill is the part-conversion of Victoria Mill in Miles Platting, Manchester. The grade II-listed former textile mill is a six-storey building, part of which has previously been converted into apartments. The part owned by Signature Victoria Mill is in the process of being converted into 85 apartments across floors one to five. Following their appointment, the joint administrators are now working with the management team at Signature Living and a team of specialist advisors to assess the status of both build projects. They will ascertain the cost to complete the developments, with a view to securing funding from the projects’ existing lenders to enable the practical completion of both projects in due course. Previously, Matthew Ingram and Michael Lennon, of Duff & Phelps, have been appointed joint administrators of Signature Living Hotel and the Bedford Hotel in Belfast, scheduled to open later this year as the George Best Hotel, also part of Signature Living. Duff & Phelps were also appointed as administrators of the Signature Shankly, which is the firm holding the leasehold interest of the Shankly Hotel in Liverpool.

Greene King becomes first UK pub company to achieve Carbon Trust’s Zero Waste to Landfill Standard: Brewer and retailer Greene King has become the first pub company in the UK to achieve the Carbon Trust’s Zero Waste to Landfill Standard. The company said it had achieved this by diverting all its waste from landfill across all waste streams generated by its 1,700 managed pubs – from food waste to kitchen equipment. The pub group partnered with waste management company SWRnewstar in 2013 and distributor Kuehne + Nagel in 2012 and made the commitment to create a waste recycling solution that could adapt, be flexible and grow. The aim of the partnership was to create a joint recycling model that was sustainable, displayed best practice and stimulated change in the industry by 2020. Since making the commitment in April 2016, Greene King has introduced a number of initiatives across its managed pubs. These include expanding its waste recycling backhaul scheme, investing in infrastructure – such as balers at depot and coloured recycling bins to correctly segregate the various waste streams for onwards recycling – and investing in its delivery fleet to ensure it could both cope and grow its recycling scheme via its supply chain. It said the final piece of the jigsaw was the creation of e-learning modules, posters and literature to continue to educate the teams on the importance of recycling and how to achieve this. As a result, Greene King has calculated there has been a 42% reduction in the number of general waste bins across its entire pub estate over five years. 

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