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Thu 4th Jun 2020 - Propel Thursday News Briefing

Story of the Day: 

TRG to close 100 to 120 leisure division sites: The Restaurant Group (TRG), the owner of Wagamama and Brunning & Price, is to close 100 to 120 sites in its leisure division. Propel understands the vast majority of the site closures will come from the circa 240-strong Frankie & Benny’s estate. The closures will also include a small number of sites under the Garfunkel’s and Coast to Coast brands. TRG currently operates four sites in London under Garfunkel’s – Charing Cross, Kensington, Leicester Square and Paddington station – and 13 sites around the country under Coast to Coast. It closed its Garfunkel’s site in Bath last year, and was hoping to convert it to a pub under its Brunning & Price umbrella, but planning has so far been held up by objections from local residents. TRG currently operates circa 290 sites across its leisure division, which doesn’t include Wagamama, which is unaffected by the closures. In an email to staff, TRG said many sites were “no longer viable to trade and will remain closed permanently” and the covid-19 crisis had “significantly impacted our ability to trade profitably, so we've taken the tough decision to close these restaurants now”. In March, TRG said 61 out of 80 branches under its Chiquito's brand would remain closed permanently as it fell into administration. It cited the covid-19 outbreak as having had “an immediate and significant impact on trading”. Propel understands the company is in talks to buy back up to 20 of those sites out of administration. The company announced in February it would accelerate existing plans to close restaurants. Initially it had planned to make 150 closures, which were first signalled last year, over a six-year period. It then said it would close 90 restaurants by the end of 2021. Last month, Propel revealed Jon Knight, the ex-chief executive of Jamie Oliver Restaurant Group, had joined TRG in the newly created role of managing director – leisure and concessions. Knight’s appointment followed the departure of Nick Ayerst, who had been with TRG for almost 14 years.

Industry News:

Anglian Country Inns launches initiative to reward key workers and help charities: Anglian Country Inns, the pub and restaurant operator led by James Nye, has launched a new charity effort powered by Wi-Fi solutions provider Wireless Social to give back to key workers and support local charities. Anglian Country Inns wants to build on the free drinks it has been offering key workers with an extended reward programme. The technology solution will identify key workers from a database of 1.9 million people across the UK. Using Wireless Social, Eagle Eye technology and an integration with the Blue Light Card ID programme, key workers will be able to draw down vouchers across the Anglian Country Inns estate to redeem rewards when the sites reopen. Customers can also get involved as any gift card or e-gift card purchased will see Anglian Country Inns donate 5% of its value to its “Kindness in the Chaos” charity fund. This fund will be used to support charity events and other charitable initiatives. Nye said: “As a family business with family values, supporting our local communities and local charities is a key part of what we do. It is really exciting to find new ways in which we can contribute and technology is a great enabler for our mission.”
Wireless Social is a Propel BeatTheVirus campaign member

BBPA launches free cross-industry platform to destroy spoilt beer and reclaim duty: The British Beer & Pub Association (BBPA) has launched a cross-industry platform to enable participating brewers to manage the safe destruction of beer and reclaim excise duty. Licensees with spoilt beer and cider in their cellars can access the free platform by visiting and creating a profile. Once their profile has been created they can follow guidance and instructions on the platform to seek permission from the brand owner to destroy their beer and cider in an environmentally friendly manner in compliance with local water authorities. Licensees can also record destruction through the platform enabling duty to be claimed back by brewers, which will then agree the means of reimbursing the customer. Brewers that have signed-up to the platform to list their brands and suppliers include Adnams, Asahi, Black Sheep Brewery, Budweiser Brewing Group UK & Ireland, C&C Group (excluding Tennent’s), Carlsberg, Heineken, Innis & Gunn, JW Lees, Marston’s, Molson Coors, St Austell Brewery and Timothy Taylor. More brewers are expected to join the platform, making it even easier for licensees to help clear their cellars and restock in preparation for reopening. Originally created and developed as a concept by Budweiser Brewing Group UK & Ireland, the site has been handed over and further developed as a wider industry platform by a BBPA steering group comprised of brewers and pub operators. From launch, the site will be administered on behalf of the sector by the BBPA, which previously estimated as many as 70 million pints of British beer from UK pubs will have to be destroyed after they were forced to shut due to coronavirus. 

Axa faces 1,700 ambiguous restaurant contracts over pandemic payouts: French insurer Axa has identified 1,700 contracts signed with restaurant owners in France where the terms are not clear as to whether business interruption losses due to the coronavirus crisis should be covered. The company suffered a setback last month when a Paris court ruled it should pay a restaurant owner two months of revenue losses caused by the virus pandemic and ensuring lock-downs. Axa had argued its policy did not cover business disruption caused by the health crisis, though it has also said it would try to find an amicable solution for problematic contracts and offer compensation. Axa chief executive Thomas Buberl told French newspaper Le Monde: “We have 20,000 contracts with restaurants, the vast majority of which do not cover operating losses in the event of a pandemic. There is some debate only for 1,700 of them because they are not clear. From the start, I’ve asked our teams to focus on these contracts and we started talks with the restaurants concerned.” Buberl said his company had reached an agreement with 200 restaurants and the payouts would allow them to cover a substantial part of their costs. The court case set a potential precedent for coronavirus-related disputes across the world.

OrderPay signs further partnerships with pub and restaurant operators: OrderPay, the ordering and payment app, has announced further partnerships with a clutch of high-profile restaurant companies and pub groups as they build towards a safe reopening in the coming weeks – and amid the challenges of social distancing. Founded by ex-senior executives from McDonald's, Accenture and Pret A Manger, the mobile ordering and payment solution was first piloted with Pret A Manger last year, and was established with founding members Five Guys, PizzaExpress, Stonegate Pub Company and Cote. Now more brands have adopted the platform, with Wasabi, Tortilla, Drake & Morgan, Chopstix, K10, Dim T and Tasty-owned Wildwood the latest operators to sign up – and several others close to being finalised. The OrderPay solution incorporates a number of features. Leveraging beacon technology, the app automatically identifies where customers are sat in a venue. The “tap and go” functionality gives operators the ability to offer their customers a self-service solution through scanning and payment for a product off the shelf. OrderPay also “re-skins” and locks the app to a particular brand as a customer crosses the venue’s entrance, so only that brand’s menu is accessible when in venue, eliminating the need for consumers to download numerous apps. The app launches at the beginning of July to coincide with when restaurants, bars and pubs are expected to start reopening. Co-founder René Batsford, a former McDonald’s Europe executive, said: “We’re so pleased to be partnering with such an impressive and well-known group of operators and humbled to be playing such a central part in helping the sector restart and rebuild.”

Belgium to reopen bars and restaurants next week but nightclubs to stay shut: Belgium will reopen bars, restaurants and other areas of social and cultural life from Monday (8 June), but not nightclubs. Federal budget minister David Clarinval made the announcement ahead of a government meeting on further easing of the coronavirus lock-down. “All sectors will reopen, but not for nightclubs unfortunately,” Clarinval told La Premiere television. Tourist attractions, camping sites and cinemas would resume, along with sports training and matches behind closed doors. Clarinval said Belgians would be allowed to meet more people, abolishing a rule that said a maximum of four people were allowed to visit the same household. Belgium began relaxing lock-down measures at the beginning of May.

More than 90% of face-to-face transactions now made using contactless, cards account for half of all UK payments for first time in 2019: More than 90% of face-to-face transactions are now made using contactless, according to new data from Barclaycard. Since the introduction of the new £45 contactless limit in the UK on 1 April, Barclaycard said it had processed more than 25 million contactless payments above the previous £30 limit. The total value of these 25 million contactless payments is more than £900m, with an average transaction value of £36.29. Barclaycard released the data as figures from UK Finance showed cards accounted for half (51%) of all payments for the first time in the UK in 2019. Cash payments decreased by 15% to 9.3 billion payments, but cash was still the second most frequently used method, representing a quarter (23%) of all payments in 2019. Debit cards were the most used payment method in the UK with 17 billion payments, of which seven billion were contactless. A total of 1.3 billion credit card payments were made via contactless in 2019. The number of contactless payments across debit and credit cards increased 16% to 8.6 billion. 

Furloughed PizzaExpress and Busaba duo launch online brownie business: Furloughed hospitality workers Marcin Matykiewicz and Rafal Smaszcz have launched an online chocolate brownie business. Matykiewicz, a purchasing manager with PizzaExpress, and Smaszcz, a technology and projects manager with Busaba, have formed Chocolate Dino Company after seeing their household income severely impacted by the coronavirus pandemic. They saw a gap in the market for premium handmade chocolate brownies, which come in nine flavours, including velvety salty caramel and coffee, and fresh mango and cinnamon. Matykiewicz, who has been with PizzaExpress for almost 13 years, told Propel it took three weeks from conceiving the idea to launching the online operation. He added: “In that time we got out our comfort zones and areas of expertise. We learned how to bake, developed and tested our products, designed and set up our webpage, created content and took our own food imagery, and set up e-commerce. Finally we are now able to pick and pack and dispatch orders.” Smaszcz, who has 15 years of operational and managerial experience at PizzaExpress and Busaba, said: “I think a lot of us need happiness and something to cheer us up in those times of hardship and uncertainty. We came up with Chocolate Dino Company to do exactly that. We want our handmade Dino brownies to put huge smiles on everyone’s face. We also hope they will help us to make ends meet and become financially independent to continue with our mission of delighting brownie lovers and creating fans for life!”

Wife of Christian Arden helps develop ‘world’s first’ plastic-free PPE: The “world’s first” plastic-free personal protective equipment is set to help millions of people around the globe tackle the spread of coronavirus while protecting the planet. International campaign group A Plastic Planet and packaging companies Reelbrands and Transcend Packaging have developed clear plastic-free visors to protect staff without adding to plastic pollution. A Plastic Planet was co-founded by Sian Sutherland, the wife of Christian Arden, who was behind Chicago Rib Shack and established late-night bar group Po Na Na. CE-certified and made from FSC paper board and PEFC cellulose from wood pulp, the plastic-free Reelshield visor is recyclable and home compostable. Three Oceans and delivery service Yodel, which are working alongside the NHS to deliver tests, have all placed orders.

Job of the day: COREcruitment is supporting a UK attraction as it looks to appoint an operations manager. This company is launching a business that will combine tourist attractions and food and beverage to create unique destinations. The ideal individual will have previous attraction experience, understanding high-volume operations, ticketing, crowd management, food and beverage management and complex health and safety. Anyone interested in a new position for the end of 2020 can email The venue is set to open next year and the business is in the planning stage. The salary is circa £40,000. 
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Pret founder backs new Vapiano vehicle, signs Germany licence agreement: Sinclair Beecham, the co-founder of Pret A Manger, is one of the group investors backing the new owners of the Vapiano brand. The group of investors, which also includes AmRest founder Henry McGovern, has backed Mario C Bauer, who was Vapiano's former head of international franchising, to restart the brand, after it filed for insolvency due to liquidity problems as a result of declining sales earlier this year. The new vehicle – Love & Food Restaurant – has already agreed to acquire Vapiano’s 29-strong operation in France and Luxembourg. It has followed this up by forming a partnership with the Leipzig family entrepreneur Falk Johne and real estate developer Bernd Ehret (Skyland Group) to become the new master licensees for the brand in Germany. The joint venture will operate about 20 of the German Vapiano restaurants on its own and will act as a franchisor towards the German licensees of the brand. It also plans to hand over another 15 locations to franchise partners in each respective region. Bauer said: “The reconstruction of Vapiano in Germany is a big task. It therefore makes sense to us to rely on the support of entrepreneurs who are very familiar with the local characteristics of the local market, the Vapiano brand and the guest psyche. The franchisees have shaped Vapiano since its beginnings. They are the right partners for the future.” The brand operates seven company-owned sites in the UK, comprising five in London, plus restaurants in Edinburgh and Manchester. It is thought the new venture might look to take on some of these sites going forward. Bauer said he wanted to revive the former company motto: “All we do we do with love.” Other backers of the new group include, the Van der Valk family, one of the major hospitality dynasties in the Netherlands and one of the first international franchise partners of Vapiano. The investors said they also want to continue to operate in the other international markets with their existing partners and franchisees. The new company said it would close the Vapiano company headquarter in Cologne. Instead, they want to manage the individual country markets decentrally in the future. 

McDonald’s reopens further 540 restaurants: McDonald’s has reopened a further 540 restaurants as it steps up its reopening plans across the UK and Ireland. The company, which had so far reopened about 230 sites, reopened another 497 drive-thru sites as well as 43 restaurants for delivery on Wednesday (3 June). New areas where drive-thrus have reopened include Northumberland, Staffordshire and West Sussex. It has also reopened its first outlets in Northern Ireland, where 24 sites are now again trading. Meanwhile, restaurants in Brighton, Corby and Leicester are among those that have reopened for delivery. McDonald’s will have reopened 1,019 outlets by the end of this week, including every one of its 924 drive-thrus. To manage the anticipated demand, McDonald’s said it would only release the locations of the restaurants reopening on the day. It comes after the company was forced to shut some drive-thrus last month due to overwhelming demand with huge queues “impacting local communities or the safety of our people or customers”. There is a £25 cap per vehicle on drive-thru orders as the business adjusts to smaller teams and social distancing in its kitchens. Perspex screens are fitted at drive-thru windows and all employees are wearing personal protective equipment. In car parks, dividers will be in place, while security teams will patrol zones to ensure visitors comply with safety laws.

SSP asks shareholders to reinvest dividend to raise £27m: SSP Group, the UK-based transport hub foodservice specialist, has asked shareholders to reinvest their dividend payment to raise £26.8m for the firm, which swung to a loss during the coronavirus crisis. SSP said shareholders can reinvest the proceeds of their 2019 final dividend payment into new shares. It had also weighed up cancelling, deferring or requesting dividend payment waivers in order to retain cash within the business. SSP stated: “Proceeds from the offering will allow for a proportion of the 2019 final dividend payment to be effectively retained in the business and further enhance the company’s cash and liquidity position during this period of unprecedented disruption in the global travel market as a result of the coronavirus outbreak.” SSP reported a loss before tax of £34.3m in the first half of the year, with revenue down 2.7%, at £1.21bn. Like-for-like sales fell 8.4% due to the closure of most travel markets during March. SSP chief executive Simon Smith said: “Covid-19 has had an unprecedented impact on the travel sector. Our response has been to take quick and decisive action to protect our people and our business, while around the world our colleagues have helped and supported their local communities. Although challenging, it was a great illustration of SSP at its best and demonstrated the resilience of our teams. Looking forward, and with sufficient liquidity to manage a pessimistic trading scenario, I believe the actions we have been taking during this crisis will make us a fitter and stronger business, well placed to deliver for all our stakeholders as the travel market recovers.” Goodbody leisure analyst Paul Ruddy said: “We would still anticipate some recovery in the fourth quarter, but commentary on current trading will likely put some downwards pressure on our second half forecasts. However, management has done a good job on cost management, liquidity is healthy and cash burn is under control. We retain our view SSP is in a good way to play a recovery in air travel.”

Livelyhood founder – the business we closed is not the one we will go back to: Sarah Wall, founder of independent south London pub group Livelyhood, has said the six-strong business that closed will “not be the one we go back to”. Speaking to Elliotts chief executive Ann Elliott as part of Propel’s “navigating the coronavirus” series, Wall said: “There will be elements of Livelyhood, what we are about in terms of hospitality, and there will be ways we will look at to constantly bring that through. However, the reality is as a business we don’t sit there and talk about what we will go back to, but how we start moving Livelyhood forward and how we rebuild. We will rebuild from scratch. I said to my team there are three of us (working) at the moment out of the 136 that work in the business, and then there will be four, and then there will be seven. So, we will relaunch and rebuild one person at a time. That is really important to us and a shared focus in a tricky landscape, and I think it’s a landscape that is here pretty long-term. It is not going to be something we recover from quickly.” Wall will share more of her thoughts in the video, which will be released on Thursday (4 June). 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.

Liberation Group reveals plan to reopen sites: Channel Islands and West Country-based brewer and retailer Liberation Group has set out its initial reopening schedule on the islands, following the state’s decision to allow all pubs to trade again from Monday, 15 June, with one-metre social distancing in place. The Jonathan Lawson-led company will reopen four sites in Guernsey on Monday, 15 June and four in Jersey the following day. The group said its remaining sites would also be reopening in the near future as it continues to review the social distancing guidance set out. The new health and safety measures the company has brought in include cutlery in envelopes and daily cleaning of all unused cutlery; capacity monitoring to prevent overcrowding; pre-ordering via the new Liberation app, email or phone; 20-minute cleaning check ensuring all public and kitchen surfaces are regularly cleaned; and strict social distancing for all team members in kitchens and service areas. Lawson said: “We’ve been busy planning for this moment since lock-down started in March. We now need to take a bit of time to make sure our teams are fully briefed and trained, new safety measure are in place and we’re properly restocked. It’s important to us our customers feel safe and welcome and experience an authentic pub environment.” 

C&C Group burning through €7m per month while on-trade shut: Drinks company C&C Group has said its underlying cash burn is €7m per month while the on-trade is closed. The company said this was net of furlough employee support, which was currently circa €5m, and about 70% of staff were on the scheme. It has reallocated and redeployed resources to meet what it said was a “significant increase in demand” through the off-trade channel since the coronavirus pandemic hit. It said pubs and restaurants usually account for 80% of the company’s revenue. Announcing its results for the year ending 29 February 2020, the group said its Bulmers brand saw a 16% decline in volumes in April and May, while Tennent's saw a 42% decline in Scotland and Magners saw a 7% decline in Britain. However, Bulmers' off-trade volumes were up 62% over the two months, while Tennent's was up 41% and Magners rose 25%, the group said. In the full-year, C&C said net revenue was up 7.8% to €1.72bn, while operating profit was up 10.4% to €116.4m. Its Matthew Clark and Bibendum businesses posted operating margins of 2.4%, which “reflected solid progress in the execution of synergy initiatives”. In light of the coronavirus pandemic, the company has undertaken an “extensive” range of operational, financial and liquidity enhancing measures in order to reduce operating costs and maximise available cash flow. It described its free cash flow as “strong”, at €136.5m, representing 103.5% of its adjusted Ebitda, which itself was 9% higher year-on-year at €131.9m. The company has cancelled its final dividend to preserve cash. C&C said it had secured net debt-to-Ebitda and interest cover covenant waivers from its lenders until August 2021, to be replaced with a minimum liquidity covenant and monthly gross debt cap. It had also received confirmation from the Bank of England it was eligible to issue commercial paper under the Covid Corporate Financing Facility scheme, should it be required.

Whitbread to restart building work at 35 Premier Inn sites in England and Wales: Whitbread is reopening 35 construction sites in England and Wales as the business focuses on safely continuing building work on its pipeline of new Premier Inn hotels. The sites under construction include new-build hotels as well as extensions to existing Premier Inn sites. They account for more than 4,500 Premier Inn and hub by Premier Inn rooms scheduled to open from 2020 up to the end of the 2022-23 financial year. Over recent weeks, Whitbread’s development team has been working closely with its construction partners in England and Wales to put in place additional measures to protect site workers and ensure social distancing. Alex Flach, UK development director at Whitbread, said: “Despite the challenges currently facing the hospitality industry, our ambition to continue to grow the Premier Inn and hub by Premier Inn brands has not changed.” With Scotland moving to the first phase of its six-phase plan out of lock-down, Whitbread is also preparing to resume work at its four construction sites in the country later this month – once the Scottish government confirms it is safe to do so. Whitbread opened more than 2,300 Premier Inn and hub by Premier Inn bedrooms in the UK during the 2019-20 financial year, expanding its total national network to 821 hotels, and is continuing to grow its estate with more than 13,000 bedrooms in its secured development pipeline in the UK and Ireland. Outside the UK, Whitbread has an open and committed pipeline of almost 10,000 bedrooms in Germany across 52 hotels. The business opened ten hotels across the country in May, bringing the total network in Germany to 16, and expects to open a total of 20 hotels by the end of 2020.

Poppies to reopen sites for takeaway, click-and-collect and delivery: London-based fish and chip restaurant Poppies is reopening its sites for takeaway, click-and-collect, and delivery. The company’s site in Spitalfields has reopened, with its Soho and Camden outlets following on Wednesday, 10 June, reports Hot Dinners. A full menu is available and all sites will have social distancing and safety measures in place, including hand sanitising stations, protective screens and face masks for staff. The sites will be open from noon to 8pm daily, with delivery available via Deliveroo and UberEats.

Trullo duo to open deli next to Islington restaurant: Tim Siadatan and Jordan Frieda are to open a deli next to their Italian restaurant Trullo, in Islington, north London. The duo bought the shop next door to the restaurant in St Paul’s Road earlier in this year and have revealed their plans for the site. According to an Instagram post, it will offer “all the things you love about Trullo for you to take home”. There will be pasta, pulses, fine olive oil, wine, cheese, sourdough bread and pre-cooked meals from the restaurant to heat at home as well as picnic hampers. Siadatan and Frieda are also behind pasta restaurant concept Padella, which operates sites in Borough Market and Shoreditch.

Bancone to launch pasta kit delivery: Bancone, the all-day fresh pasta concept led by Will Ellner and backed by David Ramsey, is to launch delivery from its site in London’s Soho on Friday (5 June). The menu of pasta kits will feature spicy pork and n’duja ragù with mafalde, and spinach and ricotta “mezzaluna” ravioli with sage butter. Each dish comes with a recipe card with “only a minimal amount of finishing up required”. There is also a short Italian wine list alongside some deli items. Delivery will be within a five-mile radius of the restaurant in Lower James Street, reports Hot Dinners. Bancone also has a site in William IV Street in Covent Garden, which opened in June 2018.

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