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Thu 4th Jun 2020 - Update: Greene King, Loungers, Young’s and Adnams
Greene King expands delivery and takeaway: Brewer and pub retailer Greene King is expanding its delivery and takeaway services outside of London to pubs across the UK. Following the successful launch of takeaway, delivery and deli services from its Metropolitan Pub Company division in London, Greene King is rolling out click and collect takeaway from 40 pubs in the north west, East Anglia and East Midlands, 38 of which will also provide a delivery service through Deliveroo or Just Eat. The pubs across the regions will start trading from Wednesday 10 June offering a range of classic pub dishes such as fish and chips and steak and ale pie. A limited range of packaged beers, wines and soft drinks will be available to purchase alongside food orders including Greene King’s Ice Breaker Pale Ale. Takeaway dishes can be ordered through the Greene King app or via phone to the pub. All pubs will operate card payment as part of new stringent health and safety guidelines. Healthy and safety of team members, customers and delivery riders has been prioritised with Greene King introducing additional hygiene and safety measures for those working in and entering the pubs for collection of orders, alongside government social distancing guidelines. Where possible delivery riders will collect orders from a separate entrance, while a one-way system for customers to collect orders, social distancing floor guidance and hand sanitiser at the entrances of the pub will be in place. Nick Mackenzie, chief executive of Greene King, said: “We know the British public are missing the pub, so with pubs still closed for now the pub experience at home is the next best thing. Our click and collect takeaway and delivery services in London have been a huge success and customer feedback is that they love they can order for the whole household, with everyone choosing their favourite dish and not restricted to just one style of cuisine. Health and safety remains the guiding principle for all our decision making around offering takeaway and delivery services so that our teams feel protected at work and customers feel safe when they visit.”

Loungers updates on how its evolved is business, two metre distancing will mitigate against opening more compact sites: Loungers has provided an update on the work it has been doing to evolve its business during lockdown. It stated: “Our team are at the heart of everything we do. Alongside providing reassurance and information we have worked hard to ensure we have positively enhanced the culture within the business. On a practical level we have introduced initiatives such as a new app to allow our teams to communicate together more easily and to ensure the voice throughout the business is heard. We have also asked our teams how they feel about returning to work, what measures they want to see put in place to protect them and we are working on specific training materials to ensure they are not put at risk in any way. InYourLoungeFest was our amazing, live-streamed annual staff party, carried out online in place of our usual company festival, LoungeFest, where we close the entire business for a day and party in a field in the Cotswolds. Our engagement with customers has been based on supporting them through this difficult time with competitions, acts of kindness in the community and reminding them about what makes their Lounge or Cosy Club special. We have also surveyed significant numbers of our customers in both Lounge and Cosy Club to understand their attitudes towards visiting our venues when we are allowed to re-open. Encouragingly, the vast majority of those surveyed are looking forward to returning (only 2% of customers out of the 6,000 respondents said they would not be comfortable resuming their normal visits to Lounge and Cosy Club when government restrictions are lifted), and their feedback has given us some great insight into what they will expect to see in place in terms of physical distancing and hygiene measures. We will continue to survey our customers in the coming weeks to understand how attitudes are shifting and to make sure our strategy is on point. We have opened 17 Lounge sites for takeout and will open a further ten sites on the same basis over the next week. Takeout, ‘From our Lounge to your Lounge’ is a completely new model for us but our objectives here were to understand if it could provide an additional revenue stream once re-opened, to help us understand operating in a physically distanced environment, to get the supply chain back up and running, to bring team members back from furlough and working, and most importantly to further energise the culture of the business and generate some excitement. It has been a big success, hugely welcomed in the communities where we have opened, and we don’t rule out following up with more sites in the coming weeks. It won’t move the dial financially on a standalone basis but could potentially provide a further revenue stream when re-opened, as well as providing a service to anyone who is less comfortable eating out. We have chosen not to go down the delivery route, and still don’t think it appropriate for our concepts which have customer and community engagement at the very heart of them but operating an order and collect model suits Loungers’ personality. As we prepare to re-open, we are challenging aspects of the service model in both Lounge and Cosy Club. We are looking to trial order-at-table technology, for example, and whilst this is something we have ruled out several times in the past, we would be keen to try it post lockdown if it makes a minority of our customers feel more comfortable. Likewise, we are considering menu size, understanding what efficiencies we might achieve with slightly smaller menus, a change we will trial whilst operating physical distancing in our kitchens. We also plan to trial going cashless when we re-open. Importantly these changes are not just relevant in the immediate months following re-opening but may well teach us more about how our brands can evolve in the longer-term. We are naturally preparing to re-open, anticipating some – and potentially the majority – of sites being allowed to open in July, assuming the hospitality sector gets the go-ahead from the government to do so, as anticipated. As a business that is used to opening a new site every two weeks, this is the kind of logistical challenge that we relish and perform well at. We are in the process of planning revised layouts and removing and storing surplus furniture to allow for the introduction of the physical distancing rules. Due to the size and layout of the majority of our sites and the spread of our trade across the day parts, we anticipate being able to trade profitably with distancing rules in place. There is, however, a marked difference between one metre and two metre distancing, and if two metres is implemented, it may not make sense to open a small number of our more compact sites immediately. We are also using the closure period to perform regular site visits and using our in-house build team to carry out both essential and preventative maintenance work that will help our P&L going forward by avoiding interruptions to trade. Our approach to partitioning and physical distancing in the sites has been to challenge ourselves to find ways to improve the sites from a design point of view, regardless of Coronavirus. Naturally, it will be necessary to have PPE and additional hygiene protocol in place for a period of time but we think the measures we are taking from a design perspective will feel very complementary to the look and feel of a Lounge and Cosy Club, whilst providing reassurance to our customers. In terms of re-opening, given the suburban and market town locations of the majority of our sites, alongside the fact that we are not in central London nor in transport hubs or tourism locations, means we are optimistic with regards to the future and expect to benefit from more home-working. The versatility of our all-day offer, use of multiple day parts and occasions, alongside our value for money positioning, means we are well placed to resume trading. Regarding the roll-out of new sites, we are keen to re-start our new site opening programme as soon as it is sensible and we expect to be able to secure great property opportunities in the coming months in a tenant-friendly market. In summary, we have used this time constructively and positively. As full re-opening gets closer, and with the valuable intelligence we have gained from participating in the latter stages of the lockdown, we believe we are in a strong position and look forward to the future.”

Young’s eyes 3 August opening for most sites: London pub retailer Young’s is eyeing re-opening of its pubs on 3 August, although some larger pubs with gardens could open in mid-July. The company also believes social distancing will be set at one metre by then, although it stressed it can adapt quickly if that’s not the case. Young’s said that it will have a cleaning and sanitising regime in place but it was not insisting on face masks at this stage. The company reported the closure of its pubs for the final ten days of the financial year (which ended on 30 March) and the preceding downturn in trade resulted in an estimated £13.0 million shortfall in revenue, with a disproportionate impact on profits, estimated to be £7.7 million due to the limited opportunity for mitigating actions. Total group revenue up 2.6% to £311.6 million. Managed house revenue was up 3.0% to £299.1 million. Patrick Dardis, chief executive of Young’s, said: “I am proud of the performance of our business this year despite the unique challenges that we have faced. These results demonstrate the continued strength of our strategy of operating a differentiated, premium and well-invested pub estate. The purchase of five of the finest pubs in and around our south-west London heartland and the Surrey suburbs (from Pearmain) was a real stand out acquisition for us. Their premium offer is a perfect fit for Young’s. We are grateful for the positive moves made by the Chancellor, extending the Job Retention Scheme to October and the £14.5 million relief we will receive from the business rates holiday to ensure that great businesses like ours survive these particularly tough times. We are confident with the steps we have taken to safeguard our business from the immediate threat of coronavirus. The board expects the business to be in a position to return to profitable growth when this unprecedented period is at an end and conditions allow, and we remain confident in our proven strategy.” The company reported its cash burn is circa £4m a month and has pad all its suppliers and commercial landlords “creating goodwill and enhancing our reputation and credibility all round”. Young’s believes social distancing will end in October and November will be the start of getting back to normal.

Adnams – we will make a substantial loss in the First Half: Suffolk brewer and retailer Adnams has reported it will make a substantial loss in its First Half. Chairman Jonathan Adnams said: “The supply of beer to pubs, and the running of our own pubs, has been at the core of the Adnams business for many years. The requirement, in March, for UK pubs to close has inevitably had an enormous impact. The need to safeguard customers and staff led us to close all but two of our operations. The exceptions were sales through our website and sales to shops and supermarkets. Our web and Take Home businesses comprised around 20% of our 2019 turnover. Temporary closure of our other operations has meant that we have needed to place around 90% of our staff on the government’s Job Retention Scheme. Despite these hugely challenging circumstances we have been tremendously grateful for the continuing support of our staff and our customers. Our web sales have been many times their prior year levels and Take Home volumes are also substantially ahead. This cannot compensate for the loss of our other businesses, but we know we are reaching many new customers, which presents us with future opportunities. The logistical challenges of being able to open pubs safely and profitably remains a huge issue for many outlets. The support from government schemes, notably the Job Retention (or furlough) Scheme, has been tremendously important and it is vital that these schemes evolve in a way that continues to provide support whilst pubs progress back towards sustainability. Adnams has an excellent group of tenants and lessees and we have been very encouraged by their positivity and support during this period. Adnams has taken the decision to waive rent from tenants whilst pubs have needed to be closed, we believe that this has been the right thing to do in the long term interests of the company and its tenants. Our refinancing plans with Barclays have been on hold since the covid-19 crisis started. Barclays remain very supportive and our existing longer-term facilities have been extended by a further six months and their maturity remains at over a year as at 30 June, our forthcoming half year reporting date. We are in discussions with Barclays as to whether future facilities are best provided through their normal financing terms or through the government-backed Coronavirus Large Business Interruption Loan Scheme (CLBILS). Our half year result will inevitably show a substantial loss, but we are working hard to maximise the opportunities from our current situation and to prepare our business for reopening, with our shops progressively reopening during the first half of June. In more normal times Adnams would have held its AGM at the end of April and updated shareholders on trading performance. We are very keen to meet our shareholders and had hoped to do so at the revised AGM date of 30th June. It appears however that a large gathering at that date is likely to remain impractical and rather than seek to defer the AGM further, we plan to hold a closed meeting on our premises in Southwold on 30th June to pass the necessary resolutions. Unfortunately, shareholders will not be able to attend this meeting and the necessary quorum will be provided by the company. We remain optimistic that Adnams will pull through these difficult times and thrive in the future environment. Our staff have shown great commitment, as have our suppliers and customers and we have worked closely with our local community and the wider environment helping each other through the crisis.”

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