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Wed 20th May 2020 - Propel Wednesday News Briefing

Story of the Day: 

UKHospitality launches campaign calling on governments to be fair to industry and support sector’s roadmap to restart: Governments in Westminster, Holyrood and Cardiff must invest in a fair and timely return for hospitality this summer, for the benefit of local communities, peoples’ jobs, national well-being and the British economy. That’s the central message of a new campaign launched today (Wednesday, 20 May) by UKHospitality to highlight businesses are ready to reopen in a safe and sustainable way given the right government support. With prime minister Boris Johnson setting out a roadmap for the sector to restart in England and proposals soon to emerge in Scotland, the #FAIR4Hospitality campaign outlines four primary areas in which governments can deliver for Britain and allow hospitality to play a leading role in the recovery. The first of these is around well-being, with UKHospitality calling for the government to endorse the trade body’s best-practice protocols and risk assessments for a covid secure restart. In terms of workers, UKHospitality is asking for the furlough scheme to be retained at full rate for the sector until businesses successfully restart. Under the area of communities, it has urged the government to provide a “national time out” on rent payments for the remainder of the year and a solution to address debt and costs for business. And in the area of consumers, the trade body has called for a cut in the rate of VAT for hospitality businesses to help boost confidence and incentivise visits to tourist destinations. As a first step, UKHospitality has submitted its best practice health and safety protocols to ministers for endorsement, which emphasise the sector needs flexibility to operate safely and should not be constricted by a one-size-fits-all approach given the diversity of businesses covered. The trade body re-emphasised the devastating impact coronavirus has had on the sector with a 21% decline in trade in the first three months of 2020 as the industry moved into lock-down – ten times worse than the whole economy. In the second quarter there has been a near wipe-out of trade; about a third of businesses believe they will never reopen some sites. Even while closed, the sector faces further costs – with no revenue and bills of up to £1bn in rent and other overheads in the second quarter of the year. UKHospitality chief executive Kate Nicholls said: “Hospitality needs the UK and devolved governments to help us deliver for our customers, our employees, local communities and the well-being of the nation.”

Industry News:

Host of multi-site operators back campaign to transform public spaces into al fresco dining areas: A campaign to safely restart the UK hospitality industry by transforming public spaces and streets into al fresco dining spaces while adhering to physical distancing is gathering pace with a host of multi-site operators giving their backing. Launched by Alan Lorrimer, founder of dining, drinking and live music concept The Piano Works, the #UKGrandOutDoorCafe campaign proposes seating on pavements, squares and open spaces outside of restaurants and bars be permitted and the government to issue a directive to grant local authorities a temporary deregulation to allow tables and chairs outside existing hospitality businesses. Industry leaders have pledged their support while housing and local government secretary Robert Jenrick has said he is considering a “blanket permission” for restaurants, pubs, cafes and bars to use pedestrianised streets for tables and chairs. The campaign has the support of businesses including D&D London, Revolution Bars Group, Oakman Inns, Abokado, Barburrito, Remarkable Pubs, Rosa’s Thai Cafe, Yummy Pubs, The Breakfast Club, Tossed, Livelyhood Pubs, Camm & Hooper, Barrio Bars, Dirty Martini, Darwin & Wallace, Mission Mars, street food business Kerb, Wafflemeister and Adventure Bar. Lorrimer is now calling on restaurant customers to get behind the campaign, which is aiming to raise £70,000 to show appreciation to key workers by giving them vouchers to enjoy food and drink at those venues behind the initiative. He said: “This initiative aims to safely get people back on to our streets and revitalise our villages, towns and city centres. With the government’s continued help we can thank the British public for behaving so responsibly and reward our front line, dining and drinking outside across the UK enjoying the great British summer.”

UK high-street footfall picks up as lock-down restrictions relaxed: UK high-street footfall is starting to pick up following the relaxing of lock-down measures and more people going back to work, but is still down circa 70% compared with the February average, according to the latest data from Wi-Fi solutions provider Wireless Social. The analysis, which took an aggregated look at footfall in more than 800 venues nationally and focused mainly on major cities, showed footfall in London picked up almost 10% last week from the previous week, but is still down 60% compared with the average in February. Footfall in Bristol has increased, but is still down about 75% compared with the average in February. Of the other cities analysed, footfall in Birmingham, Cardiff, Leeds, Liverpool and Manchester has again crept up, but remains down by more than 80% compared with the average in February. Meanwhile, Edinburgh, Glasgow, Newcastle and York remain down by about 90%. 
Wireless Social is a Propel BeatTheVirus campaign member

Government quadruples loan support for large firms, but only if they scrap dividends: The government is to quadruple the amount large firms can borrow as part of its coronavirus lending scheme, in exchange for “restraint” on dividends and bonuses. Chancellor Rishi Sunak rolled out a £330bn emergency package of loans and guarantees to protect firms as the UK went into lock-down in March. The Treasury will ramp up lending limits from £50m to £200m for large firms from Tuesday, 26 May. The latest changes apply to the coronavirus large business interruption loan scheme aimed at firms ineligible for Bank of England lending as they are not investment grade-rated. The loans are handled by UK banks but have an 80% government guarantee. Lending above £50m comes with strings attached however, including rules on dividends and senior pay. Firms will have to agree not to pay dividends, and offer no cash bonuses or pay rises over and above levels paid over the past 12 months to senior management, including board members. Bonuses and pay offers agreed before the loan was taken out are exempt. The conditions have also been extended to any major firm using the covid corporate financing facility for more than 12 months. British Beer & Pub Association chief executive Emma McClarkin welcomed the expansion but said: “Issues still clearly remain though with the speed of delivery of support for pub and brewing businesses of all sizes. It is clear these loans, as well as other government support, need to be delivered much more quickly and expanded to more pub and brewing businesses to help get them through this period.”

Government unlocks further funding for hospitality businesses ineligible for grants: The government has unlocked further funding for businesses – including those in the hospitality sector – that are ineligible for grants. With more than £2bn of grants for small businesses left unclaimed, the government has announced a further £617m available to local authorities to distribute to those “out of scope of the original scheme”. Small business minister Paul Scully said: "That applies especially to the retail, hospitality and leisure sectors. We've made an additional £617m available for councils to distribute on a discretionary basis to small businesses with ongoing fixed property-related costs." Scully also gave an update on the Future Fund. Announced by chancellor Rishi Sunak on 20 April, the Future Fund is tailored to support the UK's innovative businesses currently affected by coronavirus. These businesses have been unable to access other government business support programmes, such as the various loan schemes, because they are either pre-revenue or pre-profit and typically rely on equity investment. The scheme will deliver an initial commitment of £250m of new government funding that will be unlocked by private investment on a match funded basis. Scully said: “This week that £500m pot will become available to support companies and investors.” 

Handful of US restaurants defy state orders to reopen dine-in areas: A handful of restaurants in Colorado and California have risked penalties by welcoming in guests before the US states end their shutdown. C&C Coffee and Kitchen in Castle Rock, Colorado, opened with guests – most of whom were not wearing masks – waiting in line. The restaurant was one of several businesses throughout the country recently that have defied dine-in restrictions in states where restaurants remain limited to takeout and delivery only. C&C Coffee and Kitchen said via its Twitter account it was standing up “against the overreach” of governor Jared Polis. In California, where phase two of the state’s reopening guidance stipulated last week some retailers could open for business – but restaurant dining rooms are still closed – a few restaurants are also openly defying governor Gavin Newsom’s orders. Aji Japanese Bistro in El Dorado Hills reopened its dining room with safety procedures in place. The company stated on Facebook: “It’s not about politics, defying orders, or trying to make an extra dollar.” Meanwhile, in Orange County, Nomad’s Canteen reopened despite Newsom’s orders. Nomad’s Canteen owner Jeff Gourley told the Orange County Register he unsuccessfully tried social distancing when the restaurant reopened and sold out of everything in the restaurant. He added: “These were the best three business days ever. People were buying shirts, beer for each other and expensive tequila shots for folks they didn’t even know.”

Job of the day: COREcruitment is looking to speak to financial controllers with strong understanding of multi-site hospitality businesses. This is a great opportunity to join a growing organisation, manging a passionate team and working in partnership with the executive team. Ideally the individual will have excellent financial modelling and general accounting skills as well as previous experience at guiding a senior team in making commercial decisions. A salary of between £40,000 and £50,000 will be considered. Anyone interested can email with their CV or profile.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Thom Elliot – ‘don’t rip up the rulebook, start with what you want to protect’: Thom Elliot, co-founder of Pizza Pilgrims, has said the worst-case scenario for the 12-strong business during lock-down would be to “rip up the rule book, change loads of stuff” and in the process change something that was “fundamental, or special, or great”. Speaking as part of Propel’s “navigating the coronavirus” series, Elliot said: “The most positive spin you can put on this is you have been given the gift of time. Something like Facebook Workplace, which we are using, would have taken us months to implement but has taken a few days, as we have had the time to focus on it. It is so easy to look at this opportunity and think ‘great what are we going to change’. Actually, I have been very clear we mustn’t look at it that way but start with what do we want to protect? What’s the bits we love about the business and mustn’t change? Once we have got that nailed, then we can talk about change. The worst-case scenario is you go and rip up the rule book, change loads of stuff and change something that was fundamental, or special, or great. We are looking to make stuff better, but it’s starting on what’s great and working down.” On the brand’s popular Frying Pan Pizza Kit offer, Elliot said the initial aim was to do a 100 a week. He said: “Three weeks ago we put 50 up for sale, and sold them in 27 seconds. We did another 50 the next day and sold them faster, with about 500 people trying to buy them in the first minute of going on sale. We then put up 1,100 the next day, thinking that will see us out for a few weeks, and they sold out in 50 minutes. We are now doing 600 a day out of Victoria. It is very much a sticking plaster and keeping the business afloat during this. We are yearning to have our pizzerias open and it is not a solution to everything but it is income we didn’t expect to have and it is making a small profit. We have also been able to take more people off furlough to support it, which is a great thing. However, more than the commercial aspect, is the positivity it is generating, which is great, including getting 200 to 300 messages a day on Instagram about them. We have put on tens of thousands of Instagram followers during lock-down through it.” Elliot will share more of his thoughts in the video, which will be released on Wednesday (20 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 to sign up.

Anglian Country Inns reopens sites for takeout as it begins ‘scenario planning’ for ‘new normal’: Anglian Country Inns, the pub and restaurant operator led by James Nye, has begun reopening sites for takeout as it begins scenario planning for life after lock-down, Propel has learned. The company has reopened The Jolly Sailors in Brancaster Staithe, Norfolk, and The Cricketers in Weston, Hertfordshire, serving pizza and ribs. Meanwhile, it will reopen its coffee shop at the Hermitage Rd Bar & Restaurant in Hitchin on Wednesday (20 May), offering takeaway coffee and chicken burgers. Nye said: “We are starting to look at how we can reopen our sites safely and how things might look in the future. We are starting our covid-19 training for our staff, which we think is really important because we think if they feel safe then it will rub off on the customers. It’s also an opportunity for us to begin restarting our supply chain and also to try reducing our cash burn rate. It’s all about scenario planning at the moment.” Nye said given the location of many of its sites and large beer gardens, he hopes the company will benefit “to a degree” from the expected staycation boom this summer with many Brits expected to holiday at home given travel restrictions. With technology set to play a big role in the “new normal”, Nye said the company was working on various projects, including a gift card and loyalty promotion that would be used to help raise money for local charities “that are really in need of funds to deal with the covid-19 crisis”. He added the business was getting as much feedback from customers as possible about its takeout service through its partnership with Wireless Social as it looks at the possibility of using the information to encourage guests to return via incentives through the digital platform. Nye, who said its handful of private landlords had been “understanding”, added: “There’s only so much we know at the moment so we are doing what we can in terms of planning so we can be prepared as best as possible for reopening when that time comes.”

Deltic Group chairman steps down: Bob Brannan has stepped down as chairman of bar and nightclub company The Deltic Group, Propel has learned. Brannan has decided to leave after six years to focus on other commitments closer to his home in Scotland. Propel understands The Deltic Group has no current plans to replace Brannan. Chief executive Peter Marks said: “I would like to thank Bob, who has not only been a great chairman but a true friend, for his wise counsel and stewardship during this time and wish him well for the future.”

Compass raises £2bn: Contract caterer Compass Group has raised £2bn through an equity raise. A total of 195,012,686 new ordinary shares in the capital of the company have been placed at a price of 1,025p each. Concurrently with the placing, directors and members of the senior management team of the company have subscribed for an aggregate of 109,266 new ordinary shares at the placing price. In addition, retail and other investors have subscribed in the offer made by the company via the PrimaryBid platform for a total of 545,400 new ordinary shares at the placing price. Together they represent about 12.3% of the existing issued ordinary share capital of Compass prior to the placing, subscription and retail offer. Group chief executive Dominic Blakemore said at the time the placing was announced: “A strong balance sheet will allow us to weather the crisis while continuing to invest in the business to enhance our competitive advantages, support our long-term growth prospects and further consolidate our position as the industry leader in foodservice.”

Boparan to begin reopening Slim Chickens sites: Boparan Restaurant Group is to reopen two of its Slim Chickens outlets this week. The brand’s site in London’s Brunswick Centre will reopen on Wednesday (20 May) and in Bristol’s Cabot Centre on Thursday (21 May). Both outlets will be open daily from noon until 9pm for takeaway, click-and-collect and delivery and the entire menu will be available. Social distancing and enhanced safety measures will be in place for both staff and customers. Richard Pigott, head of operations at Slim Chickens, said: “Now lock-down measures have been relaxed, we will be phasing the reopening of our Slim Chickens estate.” Reopening dates for the brand’s outlets in Birmingham, Bluewater, Cardiff and London’s Soho and St James are expected to be announced in the coming weeks.

Grind to begin reopening programme with Greenwich grab-and-go counter: Coffee and cocktail brand Grind will begin its reopening programme, with the opening of the grab-and-go counter at its site in Greenwich. The site will offer takeaway coffee, pastries, snacks, and a few grocery items such as milk, eggs, bread, and avocados, as the business looks to support its suppliers. The opening hours will be Monday to Friday from 8am to 4pm, and 8:30am to 5pm at weekends. Grind founder David Abrahamovitch said: “It’s great to be getting the first of the Grinds back open. With a large local residential community, opening the Greenwich grab-and-go was an obvious first step back for us. We are hoping to learn a lot and refine how we keep our teams and customers safe – and that Shoreditch Grind will follow shortly after.”

CH&Co completes refinancing and fund-raise: Independent caterer CH&Co has completed a refinancing and fund-raise with its existing lenders and shareholders. The proceeds of the fund-raise when combined with the facilities provided by the lenders “ensure the group has a strong and sustainable liquidity position to support the business as it exits lock-down and builds back up over the coming months”. The total proceeds were undisclosed but it comprises both an equity injection from shareholders and a refinancing of the group’s existing debt facilities. CH&Co is led by chief executive Bill Toner and chairman Tim Jones. It is majority-owned by Toner, Jones and the management team. Equistone Partners Europe invested in the group in May 2019 through its €2.8bn sixth fund, Equistone Partners Europe Fund VI, and owns a minority shareholding. LGT Private Debt provided unitranche financing and NatWest provided super senior revolving credit facility financing. Toner said: “We as a management team have absolute confidence CH&Co will weather this storm and we have been very pleased our lenders and Equistone have shown the same confidence in us and our business.” Dominic Geer, senior partner at Equistone and CH&Co board member, added: “Equistone has the capability to provide long-term support to the businesses in which we invest, and we are pleased to have completed the fund-raise in partnership with the other stakeholders in the business. The business now has the headroom to manage a gradual return to normality over a prolonged period. We look forward to continuing to work with Bill and the team to support CH&Co’s future plans.”

Soho Coffee Co reopens two sites for takeaway: Artisan food-led coffee company Soho Coffee Co has reopened two of its sites for takeaway only, Propel has learned. The Penny Manuel-led, 29-strong company has reopened its sites in The Brewery, Cheltenham; and in Baker Street, London. The group said it had installed Perspex screens at till points, provided markers to maintain two-metre distancing and restricted payment to card only. It said its full hot and cold drinks menu is available, along with a limited food menu.

Paul UK launches click-and-collect across reopened sites: Paul UK, the French bakery and cafe brand, has launched a click-and-collect option across the 15 sites it has so far reopened. Consumers can now choose from more than 30 of the brand’s products available through its website for collection. The business has been gradually reopening parts of its 37-strong estate for takeaway and delivery, while also offering essentials such as milk, flour and yeast as well as a limited patisserie offering. At the same time, the company has brought forward the launch of its workforce management and communications platform, which enables it to have direct communication with its 500-plus team members, including those on furlough.

Operators ramp up reopenings: A number of operators, including Mexican restaurant brand Taco Bell, Pho and The Breakfast Club have ramped up their reopening programmes. Taco Bell has now reopened 26 out of its 45 UK sites for delivery through Deliveroo, including three drive-thru sites, in York, Doncaster and Northampton. All-day concept The Breakfast Club has now reopened half of its 12-strong business for delivery and takeaway, including its sites in London Bridge, Brighton and Battersea. Vietnamese concept Pho, which reopened its sites in Balham, Battersea and Chiswick for delivery and collection last week, will reopen its Islington, Spitalfields and Brighton sites on Thursday (21 May). Chopstix, the pan-Asian quick service restaurant concept, reopened its sites in Aberdeen, Cardiff, Dundee, Luton and Manchester Piccadilly at the end of last month. It has now added it sites in South Kensington, Hammersmith, Wood Green and Nottingham Victoria, for delivery through Deliveroo or Just Eat. MeatLiquor, the Scott Collins-led concept, which has already reopened its sites in East Dulwich and in Northcote Road for delivery and takeaway, will reopen its Covent Garden site on Wednesday (20 May), its Brighton site on Thursday (21 May) and its Islington site next Tuesday (26 May).

North Brewing Co opens pop-up bottle shops: Leeds-based brewer North Brewing Co has opened four pop-up bottle shops for takeaway. The company has reopened its three sites in the city as well as its outlet in Preston from Tuesday to Saturday between noon and 7pm. Since closing its bars in March, North Brewing Co has been concentrating on home delivery, which it said had “quite literally kept us in business”. However, with the company looking at longer term planning, and working on the “new normal” it has launched the pop-up bottle shops selling its cans, guest beers, wine, snacks, merchandise and mini kegs. The bottle shops are manned by one member of staff at a time with social distancing measures in place and enhanced safety procedures such as Perspex screens and hand sanitiser provided for customers. The company stated: “We have carefully considered our decision to open pop-up bottle shops. With confident, well trained staff, infrastructure and excellent signage we believe we are safely adapting to the ‘new normal’, looking after the communities we serve, and working to protect the jobs of our employees longer term.”

Chick ‘n’ Sours founder launches crowdfunding campaign to create plant-based noodle product: Carl Clarke, chef and founder of London restaurants Chick ‘n Sours and Chik’n, is launching a crowdfunding campaign to fund the creation of plant-based noodle product Future Noodles. The campaign on Kickstarter is aiming to raise £50,000 for the creation of the product, and Clarke said for £150,000 he can create three variations. He said: “Working long shifts in the kitchen, my late-night snack would always be Japanese instant noodles and as banging as they tasted, I knew they weren’t good for me. Aware this is a worldwide problem and the busier our lives are, the unhealthier we all become, I started experimenting as I knew there must be a way to make instant noodles that were not only super tasty, but nutritionally complete. Having consulted some of the UK’s leading nutritionists, scientists and food innovators over the past year, Future Noodles was born.” As part of the campaign, Clarke is launching the “Buy One, Give One” initiative, which will mean for every packet bought a Future Noodle meal will be donated to someone who needs it, aiming to support those suffering from food poverty and homelessness. If the Kickstarter campaign target is reached, Future Noodles will feed 50,000 vulnerable people by the end of 2020.

Veeno gives away almost £50,000 of wine and vouchers to NHS staff: Italian wine bar business Veeno has given away almost £50,000 worth of wine and vouchers to NHS workers. The company marked International Nurses Day last week by inviting NHS staff to sign up for the chance to win a bottle of wine. More than 3,000 workers did so with Veeno giving a bottle of wine to the first 500 that signed up. But the company also decided to thank all the NHS workers that signed up and didn’t win a bottle by offering them a voucher to the value of £15 to spend on its online store or in a Veeno outlet when they reopen. Owner and director Rodrigue Trouillet told Propel: “We received many emails thanking us for this initiative but we wanted to do something modest to recognise everything they are doing.” 

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