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Wed 29th Apr 2020 - Update: Furlough, Vapiano, Burger King, Starbucks, landlords
Furlough extension plan for workers in struggling sectors: Workers in the parts of the economy worst affected by coronavirus could be furloughed for longer than others under Treasury plans to gradually remove taxpayer wage support, writes The Times. With four million workers furloughed at the taxpayers’ expense and costs set to reach an estimated £42 billion – according to the Office for Budget Responsibility (OBR), the independent government forecaster – the Treasury is looking for ways to wind down the scheme with the least damage. That is understood to include a sector-by-sector approach that would allow those in jobs most affected by lockdown to be supported for longer. Yesterday, the chancellor Rishi Sunak gave a hint of his approach in the Commons: “As we think about exiting from the economic and social restrictions, I will look at the right interventions for every sector.” The Job Retention Scheme, where the taxpayer pays 80% of the wages of furloughed staff up to £2,500 a month, has already been extended by a month but is due to end on 30 June. Eight in ten workers in the hospitality sector have been furloughed as a result of the coronavirus crisis, according to research by the Office for National Statistics (ONS). The research, which was released last week, showed the sector had temporarily laid off the largest proportion of workers after the UK lock-down began.

PwC appointed to find buyer for Vapiano UK: Advisors have been appointed to find a buyer or new investor for Vapiano UK, the Italian casual dining brand, Propel has learned. PwC is understood to have started actively marketing the seven-strong UK arm of the brand this week. It is believed the advisor has been appointed to manage the sales process for parent company Vapiano SE, Vapiano Franchising, and a number of the brand’s international markets, including the UK. The brand operates seven company-owned sites in the UK, comprising five in London, plus restaurants in Edinburgh and Manchester. Its site in Great Portland Street, near Oxford Circus, was one of the brand’s best performing sites across its entire international estate. At the start of this month, the board of Vapiano filed for insolvency due to liquidity problems as a result of declining sales. The company could not reach an agreement with its financing partners on an envisaged funding solution, which left it unable to apply for aid under government relief programmes. In addition to an already identified funding requirement of €10.7m, the listed company reported it would need an additional liquidity injection of €36.7m due to the coronavirus crisis and the associated government directive ordering restaurants to close. All of the restaurants operated by Vapiano SE are closed due to the ongoing coronavirus crisis. German and international franchisees are not directly affected by the insolvency. The brand operates 55 sites in Germany and circa 240 restaurants across 33 countries in total. Pluta were appointed insolvency practitioners for the brand’s business in Germany earlier this month. Vanessa Hall, the former YO! chief executive, was appointed chief executive of Vapiano SE in September. She had been a member of its advisory board since September 2018.

Burger King UK aims to have at least one site open in every city by 31 May: Burger King UK, the Alasdair Murdoch-led business, has said it aims to have at least one site open in every city by 31 May, after announcing plans to reopen a further eight sites today (Wednesday, 29 April). The circa 550-strong company, which reopened six sites for delivery and takeaway earlier this month, will today reopen restaurants in Aberdeen, Dundee, Merton in south London, Reading, Southampton, and Hillington and Springfield Quay, both in Glasgow. It is offering a limited menu and contactless delivery through Just Eat and Deliveroo. A drive-thru Burger King in Havant, Hampshire, is also reopening as a trial with a view to opening more such restaurants over the coming weeks. Katie Evans, marketing director at Burger King UK, said: “We are so pleased to be able to open more restaurants across the UK this week, including our first restaurant for customer drive-thru, which is a huge step forward.” Murdoch told Propel earlier this month the brand’s decision to initially reopen four sites for delivery only would provide it with important lessons on a way forward over the short to medium-term for the business. On 16 April, the company reopened four sites – two in Bristol, one in Coventry, and one in Swindon – with a pared-down menu. The brand said it had seen strong demand at the sites it has so far reopened.

Starbucks to reopen US stores at measured pace: Starbucks plans to start reopening its US sites in early May for a to-go service and said it sees 90% of its company-operated stores being back in operation by the early part of June. Chief executive Kevin Johnson outlined the phased opening plans on a post-earnings conference call, highlighting that enhanced safety measures and modified schedules would be put in place for the reopened sites. Johnson said that based on the company’s substantial experience in China in reopening stores, a full recovery is expected over time. He said: “This monitor and adapt phase in the US is the inflection point for reopening stores and begins a recovery process that requires ongoing monitoring, community by community, to rapidly adapt and drive the recovery.” The likes of Starbucks, McDonald’s, Chick-fil-A and Dunkin’ Donuts have all said that they will keep dining areas closed in their first phase of opening back up in the US, even in states that have seen restrictions lifted. It said it sees sales in China, the company’s biggest growth market, recovering by the end of September. In China, Starbucks stores were closed for most of its second quarter, although 98% of locations in the country have now reopened. Those locations have modified schedules and extra safety measures, including limited cafe seating to maintain social distancing.

Landlords look for help over rent refusal: The Times has reported that Britain’s biggest lobby group for property companies has started to thrash out a deal with the Treasury to secure support for landlords facing billions of pounds in lost or deferred rents. The newspaper added: “John Glen, economic secretary to the Treasury, and Robert Jenrick, the communities secretary, held emergency talks with the British Property Federation yesterday to respond to landlords’ fears of a mass non-payment of rent at June’s quarter rent day. Last week, the government announced legislation to stop landlords using ‘aggressive tactics’ to collect rent, including issuing statutory demands and winding-up orders. It comes after the introduction of a three-month moratorium on evictions for non-payment of rent.”

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