Propel Morning Briefing Mast Head Propel Hospitaliity website Paul's Twitter Link Subscribe Unsubscribe Web Version Forward Email Wi5 Banner Morning Briefing Strap Line
Tue 12th May 2020 - Propel Tuesday News Briefing

Story of the Day: 

Neame – VAT payment needs to be retrospectively cancelled: Jonathan Neame, chief executive of Kent-based brewer and retailer Shepherd Neame, has suggested retrospectively cancelling the VAT payment for the quarter to March 2020, in order to put money back into the system to aid the recovery next year. Speaking as part of Propel’s “navigating the coronavirus” series, Neame said: “A lot of companies including ourselves have deferred their tax liabilities, particularly VAT. What I would like to see is the VAT quarter that ran into March 2020, that payment is cancelled in retrospect because that would be a working capital commitment hanging over a business our size, but also individual pubs as well. If that can be cancelled as we go into what I hope will be a recovery summer in 2021, then that will put a lot of money back into the system and that would be a great fillip.” Neame also said it was fundamental to his business its licensees come out of the coronavirus crisis in a good mental and financial shape, as they will “lead our recovery”. Last month, the company extended its programme of support for licensees after announcing it will waive rent for the duration of the government lock-down. Neame said: “This crisis is nobody’s fault and they would have had bills they needed to pay, so our view was if the grant money, furlough money and various other things could be used to settle their other accounts and settle any outstanding bills for beer with us. If they can then reopen without having to worry about any outstanding debts, then they can focus on the job in hand, which is a mighty challenge to get customers across the door again. I’m very grateful for the incredible bow-wave of support we’ve had from our licensees in response to these measures. I am also deeply impressed with how many of them have adapted to provide community, grocery and takeaway services or do charitable activities. We have about 40 pubs doing some form of takeout service. I think the goodwill they have shown to us has spilled over to their customers. And it is very heartening even in one’s most down moments to recognise the enormous sense of goodwill there is to our individual pubs, to our individual licensees and thereby to us a company. They want us to succeed and to get through this.” Neame will share more of his thoughts in the video, which will be released on Tuesday (12 May). 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 anne.steele@propelinfo.com to sign up.

Industry News:

Government – venues ‘crowded by design’ unlikely to reopen in July: Venues that are “by design, crowded” and where it may prove difficult to “enact distancing” may not be able to reopen in July, or only in part, according to further details in the government’s covid-19 recovery strategy. The circa 50-page document, called Our Plan To Rebuild, reiterates some hospitality businesses could reopen as early as 4 July but venues where social distancing will be difficult to carry out will not be able to open fully at this time. The report also states “in order to facilitate the fastest possible reopening of these types of higher-risk businesses and public places” the government will “carefully phase and pilot reopenings to test their ability to adopt”. All businesses that are eligible to reopen will need to meet the government’s new ‘”covid-19 secure” guidelines, which it said will be released later this week. The government said it also plans to monitor carefully the effects of reopening other similar establishments elsewhere in the world and will “establish a series of taskforces to work closely with stakeholders in these sectors to develop ways in which they can make these businesses and public places covid-19 secure”. Peel Hunt leisure analyst Douglas Jack said: “In our view, the reopenings are most likely to apply to cafes and restaurants with outdoor space. However, we believe the restaurant sector is the least well placed to operate profitably under this scenario. The quoted operators could possibly have less debt in 2022. After all, many have raised equity and minimised cash burn. In addition, they should exit covid-19 with minimal or no capex, tax and dividends, as well as the opportunity to rewind their working capital positions and renegotiate lower operating costs. A British Beer & Pub Association survey has indicated about 40% (of 48,556) pubs will not survive beyond September unless support increases during the lock-down. We expect their concerns to be weighted to independent pubs, which account for circa 45% of pub supply. We do not expect independent restaurants (76% of restaurant supply) to fare any better. Campaigns for government support are rarely optimistic. Supply should fall, but not by 40% in our view. We also expect customers to become even more discerning, leading to a further polarisation in demand, so when the sector reopens, the priority must be on quality, not quantity. Buy Loungers.”

UKHospitality to publish protocols for safe reopening of hospitality venues, calls for retention of 80% furlough until end of September: UKHospitality is to publish a series of protocols aimed at supporting the safe reopening of hospitality venues. The trade body has been working with members and others to draw up protocols tailored to individual sub-sectors, covering accommodation, coffee shops, foodservice management, holiday parks, late-night, pubs, quick service restaurants and visitor attractions. The protocols will be shared with sector stakeholders – including employees’ organisations and to other trade associations – for further development. The suite of documents will provide guidance for businesses to devise their own bespoke plans tailored to individual sites, emphasising safe reopening. They are not intended as a substitute for individual plans that should still be produced by businesses, said UKHospitality, but it is hoped they will inform the government’s own plans for hospitality reopenings. UKHospitality chief executive Kate Nicholls said: “The non-negotiable principle when it comes to reopening is the safety of our staff and our customers is paramount. The size and diversity of the hospitality sector means there is no one-size-fits-all approach to reopening. We have been working hard with our members and alongside other industry bodies to provide practical and effective protocols which will enable businesses to begin to reopen safely when the time is right.” Meanwhile, UKHospitality has written to chancellor Rishi Sunak calling for continued support through the Coronavirus Job Retention Scheme to ensure businesses survive, and jobs are saved. It is estimated about 2.4 million people are currently on furlough in the broader hospitality sector. The trade body is calling for the continuation of the 80% furlough pay until the end of September with a tapered scheme until the end of the year, a removal of the three-week maximum period to increase flexibility among reopening businesses and sector-specific part-furlough schemes with pay shared between the government and the employer.
UKHospitality is a Propel BeatTheVirus campaign member

Data application and sharing can drive new leasing model as landlords face watershed moment: Almost fourth-fifths (79%) of landlords, which own more than 120 million square foot of UK retail property, believe the covid-19 pandemic will bring permanent changes to how property is leased and the terms on which it is occupied, according to new research by Colliers International. It said the changes would be driven by an advanced use of data but landlords face challenges in terms of accessing the right data sets and must be willing to share this information with retailers if both sides are to benefit. An increased use of data regarding footfall, trading turnover and how physical shops help to generate online sales are set to become new key metrics that influence the pricing of leases. More than 40% of landlords canvassed said in future they are more likely to consider these factors when determining an asking rent. However, at present, the survey showed many landlords are not yet in a position to apply data to create a new leasing methodology. Matthew Thompson, head of retail strategy at Colliers International, said: “Of the owners surveyed, about two-thirds do not have access to the data that would enable them to measure who is visiting their properties; where these customers come from or the nature of their visits. Even with the right data in place, close to 40% said they would still not be prepared to share these insights with occupiers in return for sales data. This unwillingness to share data between stakeholders needs to be resolved if a new model for retail property leasing is to emerge from the devastation of the pandemic.”

Trade bodies call on chancellor to save future of pubs: Sector trade bodies have sent a joint letter to chancellor Rishi Sunak calling for measures to save the future of pubs and brewers. Thanking the chancellor for existing support, the letter sets out the cogent economic and social cases for making extra efforts to preserve pubs, which will remain shut until July at the earliest under the government’s plans for easing the lock-down. The letter from the British Beer & Pub Association, British Institute of Innkeeping and UKHospitality, which between them represent owners and operators of 35,000 pubs, state their unwavering commitment to the safety of pub staff and customers, and cite the industry’s ongoing development of protocols to achieve that objective. They also call for an extended, more flexible furlough scheme to the end of 2020, tapered to encourage people back to work only when it is safe, and gradually, if appropriate; removal of the £51,000 rateable value cap on grant eligibility, to open funds up to the 20% of pub and hospitality companies that represent the bulk of trade and employees; improved accessibility and eligibility to loans to ensure businesses can access the necessary funds to survive; and additional support to brewers of all sizes, including on beer duty and access to grants and rates relief. The trade bodies said: “There are few things more cherished than the British pub. The current crisis casts an existential shadow over the future of these national treasures and we are calling on the chancellor to act, before many of them – and their valuable jobs, social benefits and economic contributions – are lost to us for good.”

Four-in-five furloughed staff prepared to return to work as campaign launches for rule change: Four-in-five (86%) staff are ready and willing to do work while furloughed to improve the chances of their employer’s business surviving the lasting effects of the lock-down, according to new research. The survey of furloughed staff was commissioned by specialty coffee roastery business Volcano Coffee Works, which has launched the #RatherBeWorking campaign, which is being supported by Young Foodies, the largest community of challenger food and drink brands in the UK. Given the Treasury is paying their salaries, four out of five furloughed employees (82%) said they feel a sense of duty to contribute to the recovery of the British economy. The survey also revealed three-in-four employees (72%) fear their employer will cease trading during the pandemic and even if the business survives, 59% worry they will be made redundant anyway. The letter – from Emma Loisel, co-founder and chair at Volcano Coffee Works, and Young Foodies co-founders Theadora Alexander and Chris Green – stated: “Under the current rules, it’s like our people are on enforced leave (more than 6.3 million to date), just when we need them the most! Our loss in revenues means we can’t afford to pay them right now. But we still need their time and expertise to maximise all revenue opportunities, keep our businesses alive, plus get them ready to flourish again when more normal trading environments return. You are already paying our people’s wages. This huge sunk cost could become an investment in our future, if you let us get our people back to work.” The chancellor has hinted this week at changes to the Coronavirus Job Retention Scheme that pays furloughed employees. Currently they are paid up to 80% (up to £2,500) of their salary. If this amount is reduced to between 40% to 60%, the survey found more than half (53%) of furloughed employees would not be able to meet their living costs.

Backman – many businesses facing an existential crisis as liquidity runs out: Sector analyst Peter Backman has said while some sector businesses are turning their thoughts to how to reopen, many are facing an existential crisis as they see their liquidity running out. Backman said the sector was in “uncharted territory” and in his view there's “only so much liquidity in the system and it has to be balanced against the medical aspects of the pandemic”. He said: “There is some sign of activity in the foodservice sector – not much, but enough to show there is a heartbeat somewhere in the takeaway and delivery sector. While some businesses are turning their thoughts to how to open up whenever that is allowed, many are facing an existential crisis as they see their liquidity running out. It seems as though the government is sympathetic to the needs of the foodservice, hospitality and leisure sector, which has been particularly hard hit by the lock-down and is likely to be asked to endure for longer than any other sector of the economy. It remains to be seen whether this appreciation is turned into action or enough action to help a sizeable proportion of the sector get through the epidemic until demand reaches a level that renders the sector, as a whole, and the individual businesses within it, financially viable once again. But my view is that there's only so much liquidity in the system and it has to be balanced against the medical aspects of the pandemic. At its core, the current situation is not about finance or the economy but consumer demand – and specifically lack of consumer demand caused by a medical condition about whose outcome we have no idea and no history to guide us. We really are in uncharted territory.”

Access Hospitality launches free e-book outlining social distancing technology solutions for operators: Access Hospitality has curated a free e-book that outlines technology solutions that could help operators adhere to social distancing guidelines. The guide includes sections on bookings, automated call systems, pre-order, order and pay at table, table layouts, staggered arrivals, payment tools, virtual queuing, events, marketing, takeaways and deliveries. Access Hospitality managing director Henry Seddon said: “The social distancing e-book has been developed to pull all of these options together to help operators plan how they can respond to some of the social distancing measures implemented and provide reassurance they have all bases covered to help them return to profitability.” Access Hospitality has already provided two months’ free access and 48-hour set up for delivery/click-and-collect capability websites, voucher capacity on DesignMyNight, the launch of the DeliverMyNight delivery listings website and a guide to getting operational when it is deemed safe to do so. The Access Hospitality guide to social distancing is available to download here.

London hotel market sees average daily rate in April fall below £90 as it reports worst month on record: The London hotel market saw average daily rate fall below £90 in April for the first time since August 2005 as it reported its worst month on record, according to preliminary data from STR. Reflecting the continued impact of the coronavirus pandemic, occupancy in April fell 73% compared with the previous year, to 21.9%. The occupancy level was 32.7% in March. Meanwhile, average daily rate in April fell 38.9% compared with the year before, to £87.18, while revenue per available room dropped 83.5% to £19.11

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, interesting, 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. The salary is circa £70,000 plus benefits. Anyone interested and who has extensive, multi-site operations experience from the food-led pub sector can email Stuart@corecruitment.com
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Starbucks to reopen 150 UK stores from Thursday: Starbucks is to reopen about 150 stores across the UK from Thursday (14 May). The company said it would open about 15% of its UK sites in the first phase of its reopening plans, which are predominantly focused on drive-thru stores. It said it would also reopen a “handful of takeaway-only stores” as it continues with preparations to allow all of its UK stores to be reopened. Starbucks closed all UK sites in March after the British government-mandated lock-down was introduced. The company said it has been “learning, testing and refining our operational standards every day” behind closed doors. It said the reopening plan – which will start with stores broadly spread across the UK – will focus on ensuring the health and well-being of its employees and customers. Starbucks has already reopened some of its sites in other regions, including the US and China. It said it has “taken learnings” from changes to its operations in China – where 90% of sites are now open – and the US in consideration of its UK sites. New safety measures at UK sites will include regular hand washing for at least 20 seconds, two metre social distancing, screens at payment areas and the use of contactless payment only. The reopening menu will include Starbucks’ core range of drinks and a limited food range, it said. Employees have been paid during the closure and the company said it “will not be accepting any opt-in government support” during the coronavirus crisis.

Pho to begin reopening sites for delivery only this week: Vietnamese concept Pho will begin reopening parts of its 30-strong estate later this week for delivery only, Propel has learned. The first phase of the company’s reopening will begin on Thursday (14 May) with its sites in Balham, Battersea and Chiswick opening for delivery only. Co-founder Stephen Wall told Propel: “Off the back of this, once we bed down the operation, the intention is to open a further six or seven sites within a couple of weeks, focusing on those based in London suburbs and some of our regional sites. And we’ll go from there. We’re also working on introducing click-and-collect technology, which we hope to have up and running at the end of the month.”

Burger King begins reopening high-street sites: Burger King UK, the Alasdair Murdoch-led business, has begun reopening some of its high-street sites as part of a trial. The company has been operating a delivery and drive thru-only service at some of its stores over the past two weeks after deciding to close its circa 500-plus estate on 24 March. Propel understands the company reopened its high-street sites in Portsmouth and Newcastle last week, with a couple more set to reopen this week. As yet it is not trialling takeaway at any of the reopened sites. Murdoch told Propel “demand appears to be strong” at the reopened sites, but said: “However, as it is largely delivery only with commission being paid, understandably, to the consolidators then we are not making money.” The company plans to have at least one site open in every city by 31 May, as part of a staggered reopening after the lock-down. “We would anticipate by the end of June, we will be getting towards 350 and 400,” Murdoch told the BBC's World At One programme last month. The company will reopen a further 35 sites this week, while a further 72 will be open from Monday, 18 May across the UK.

Chipotle to take ‘steady, careful’ steps reopening dine-in areas at US sites, extends bonus pay for restaurant workers: Chipotle Mexican Grill’s chief executive Brian Niccol has said there will be no rush to reopen dine-in areas even though restrictions are being lifted in some areas of the US. In a letter sent to customers, Niccol also addressed the brand’s position on supporting local farmers and extending bonus pay for restaurant workers. He said: “Getting back to the way of life and business we’re accustomed to consists of a gradual process that will take time and may differ based on the US state or county where you live. We’re going to take steady, careful steps informed by local governments and public health officials to reopen our restaurant dining rooms. There is no official timeline that we can share at the moment.” In late-March, Chipotle, which has seen digital sales soar during the pandemic, gave employees a 10% pay increase between 16 March and 12 April. The company has extended that to 24 May. In addition, it said it gave a $500 one-time manager assistance bonus to its restaurateurs and general managers and a $250 bonus to apprentices who worked last month. In terms of the supply chain, Niccol said: “We have committed to increasing our local sourcing and providing long-term contracts so our partners can sustain their farming practices.” On the current meat shortage, chief financial officer Jack Hartung told Nation’s Restaurant News: “To date, we have been able to maintain our supply at reasonable prices and we have only experienced isolated spot outages. That could change if some of our key suppliers are affected.” 

Cake Box aims to reopen entire estate by early June with 79 outlets now operational: Cake Box, the specialist retailer of fresh cream cakes, has said it expected to have all its high street shops open by early June and reported initial demand had been “encouraging” but at much lower levels than usual amid the lock-down. The company’s model sees franchisees fork out the capital required to open a shop and then subsequently own and run the store. Following measures allowing its franchise stores to operate safely and in line with government guidance, the company said it currently had 79 of its circa 115 franchise stores open offering a limited menu of products. The company stated: “Production is currently limited to our Enfield site where we have also implemented new health and safety procedures and are operating with reduced staffing levels to maintain the appropriate distancing.”

200 Degrees trials reopening for takeaway at Nottingham site: Nottingham-based coffee roaster and retailer 200 Degrees has reopened its Carrington Street site in the city for takeaway. The trial sees the outlet open daily serving its coffee, full range of hot and cold drinks and a selection of pre-wrapped cakes and sweet treats. To fall in line with social distancing regulations, a limited number of customers are allowed in the shop at any one time and floor markings are in place to help customers move around safely. In addition, there are only two members of staff working behind the counters that have Perspex screens in place and payments are cashless only, either via card or the digital 200 Degrees app. Other safety measures include recording the temperature of the 200 Degrees team members each morning, hand washing every 20 minutes for 20 seconds, and hand sanitiser also being supplied for customers. Co-founder Rob Darby, said: “The decision to reopen the Carrington Street shop was due to the fact it is so close to our Meadow Lane roast house headquarters and has a strong takeaway trade normally. The safety of our customers and team is always our main priority and due to the current situation, we have taken all the necessary steps to ensure government safety guidance is strictly adhered to. We see this as a positive first step towards reintroducing our offering to the public, and will be looking at growing our food options and potentially opening further shops for takeaway in due course.”

Signet secures £3.7m loan to refurbish Hampton Court hotel and introduce two new restaurant concepts: 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, has secured £3.7m for the refurbishment of its debut site. Having acquired The Mitre Hotel in Hampton Court in January, Signet Hotel Group has secured a loan from OakNorth Bank to refurbish the 36-bedroom hotel and upgrade it from a three to a five-star venue as well as introduce two new restaurant concepts. The hotel, which is due to reopen in September, has a 60-cover riverside restaurant, a 70-cover brasserie and bar, a 80-cover orangery, a large external riverside terrace and two dedicated conference rooms/private dining areas. The secured funds will be used to refurbish and upgrade the grade II-listed hotel, which will offer more junior suites. Ross said: “The Mitre Hotel has a unique and extensive history, so it is our privilege to be refurbishing the building by breathing new life in creating 36 individually designed new bedrooms in a way that preserves this historical significance. Additionally, our two new restaurant concepts aim to attract local residents, hotel residents and Hampton Court Palace visitors.”

G1 Group feeds 10,000 people through social initiative: Scotland’s largest managed pub, restaurant and hotel operator G1 Group has fed 10,000 people as part of a four-week initiative to feed those who need it most. The Big Social Feed is a pop-up style, high-volume hot food kitchen that is based at the group’s Glasgow venue The Social. Run entirely by volunteers, the initial goal was to work with the company’s suppliers to try to feed 500 people per week for three weeks, with a fourth date now added for Friday (15 May). But due to overwhelming support, G1 Group was able to hugely increase its output and with pre-orders confirmed for the latest date this week, it will have provided 10,000 hot meals and soup portions to the public through both grab-and-go and packaged food supplied to a range of charities, homeless shelters, and key workers. 

Wright Brothers launches at-home range: Wright Brothers, the oyster specialist and seafood wholesaler, has launched an at-home range. It comprises fresh, smoked and cured fish; oven-ready whole fish to share; cooked crab and lobster; oysters and mussels; and frozen prawns and seafood. Delivery, initially offered only within the M25 but due to be rolled out nationally subject to demand, is available Tuesday to Saturday. There is a minimum order value of £35 with a £10 delivery charge, while orders more than £50 qualify for free delivery. Orders placed before 5pm will arrive two working days later via Wright Brothers’ own fleet of temperature-controlled vans using contactless delivery. 

Return to Archive Click Here to Return to the Archive Listing
 
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
 
The Pub Collective Banner
 
Arla Foods Banner
 
Eagle Eye Banner
 
Orderbee Banner
 
Dr Oetker Banner
 
Peel Properties Banner
 
Barrel and Stone Banner
 
Zonal Banner
 
OrderPay Banner
 
Ei Group Banner
 
McCain Banner
 
hastee Banner
 
Trail Banner
 
IOL Banner
 
Catapult Banner
 
Pago Banner
 
Access Banner
 
Startle Banner
 
COREcruitment Banner
 
Punch Taverns Link Punch Taverns Link
Arla Foods Banner
ALMR Web Link Web Version Unsubscribe Subscribe Propel Info website