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Wed 10th Jun 2020 - Propel Wednesday News Briefing

Story of the Day: 

Osmond – government needs to help oil the wheels of landlord/tenant negotiations: Hugh Osmond, serial sector investor and current backer of Coppa Club, has told Propel the government needs to help with “a bit of financial oil to the wheels of landlord/tenant negotiations” over the rent issue. Osmond, the founder of Punch Taverns, said: “After all, it was government that closed us down and hence stopped the income, so it does need to contribute to the losses it caused. If it doesn’t step in, I fear wrangling could last for years and more groups will fail.” Osmond’s warning came as UKHospitality said unless the government provides fiscal support to overcome the stand-off between landlords and tenants over unpaid rent, hospitality business failures and significant job losses will follow. The trade body has written to the government, warning hospitality businesses hammered by coronavirus and facing difficult trading for the foreseeable future, will be unable to come to rent settlements without support. UKHospitality warned, unless financial support is forthcoming, the reopening of hospitality businesses after months of lock-down will be at risk. Its letter sets out measures to resolve the deadlock, including the possible introduction of tax credits to incentivise rent waivers, property bounce back bonds to cover lost revenue form the closure period, and the introduction of a furloughed space grant scheme. The trade body has also reiterated its willingness to work with all parties to help deliver an equitable solution and support for the proposed Code of Practice to facilitate negotiations. UKHospitality chief executive Kate Nicholls said: “We have lost an entire quarter’s revenues to covid-19 and the prospects for trading from July to September look severely limited. Social distancing measures and expectations of low consumer confidence are going to see businesses trading at a fraction of capacity. The current moratorium on forfeiture and enforcement action must extended until the end of the year, to allow government’s proposed Code of Practice to support negotiations. The reality is, though, we are at a point where the government has to step in and act decisively, otherwise businesses will go under, jobs will be lost, and rent will never get paid.”
UKHospitality is a Propel BeatTheVirus campaign member

Industry News:

Soho restaurant and bar operators back campaign to pedestrianise streets to help sector businesses: Soho restaurant and bar operators are backing an initiative to temporary pedestrianise streets to help sector business trade amid social distancing restrictions this summer. Led by Soho Estates and Shaftesbury, the Soho Summer Street Festival campaign proposes to temporarily pedestrianise the area and to relax licensing measures allowing venues to expand into the streets of Soho. Social distancing is a particular challenge in the Soho area given it is made up of a large number of small sites with limited covers. Operators including Soho House, Tonkotsu, Maxwell’s Restaurant Group, Polpo and L’Escargot are among those backing the initiative. The campaign proposes to start by temporarily pedestrianising key roads in the area including Bateman Street, Beak Street, Brewer Street, Carlisle Street, Dean Street, Frith Street, Greek Street, Moor Street, Old Compton Street, Romilly Street and Soho Square. A further request to relax licensing measures from Westminster Council aims to allow businesses to set up their tables and chairs outside to serve food and drink for the rest of the summer. Soho Estates manging director John James said: “With so many brilliant independent businesses in Soho, we are at risk of losing the culture that makes the area so special. Despite the awful effects of the crisis, it has been incredibly warming to see the community come together in such a way.” The campaign has also received the backing of personalities such as Stephen Fry, Damien Hirst, Bill Nighy and Olivia Williams.

Sharma says 4 July remains earliest hospitality businesses will reopen: Business secretary Alok Sharma has said 4 July continues to be the earliest date government will look to open hospitality businesses. He said: “What we are doing is opening up the economy in a phased manner. The last thing we want – the worst possible thing – is we have a second peak and lose the gains we have so far that would set back the business community and we don't want that to happen.” With regards to the two-metre rule and other countries now adopting a one-metre policy, Sharma said: “We keep all of these things under review. Other countries may be further along in terms of their roadmap.”

UK footfall sees slight dip as weather turns: UK footfall has seen a slight dip over the past week following the turn in the weather, 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 increased slightly in the past seven days, but is still down about 60% compared with the February average. With Black Lives Matter protests taking place, Bristol saw a large increase in footfall over the weekend, and was down about 60% compared with the February average. There was a slight increase in footfall in Birmingham, Edinburgh, Glasgow and Manchester, but they are all still down more than 80% compared with the February average. Leeds and York saw dips in footfall compared with the previous week and were down almost 90% compared with the February average while Cardiff, Liverpool and Newcastle were down slightly in the seven day period.
Wireless Social is a Propel BeatTheVirus campaign member

McVeigh – sector has to present positive reasons for people to go out: Charlie McVeigh, the founder of Draft House, and driving force behind #ProjectPint, the campaign that celebrates the nation’s love of pubs and pints, has said the hospitality industry needs to present a positive message and positive reasons for people to go out. Speaking as part of Propel’s “navigating the coronavirus” series, McVeigh said: “What needs to happen most urgently is people having led the government into lock-down, have got to lead the government out. That can only really happen now if the messaging starts to change. This is why I have been shouting from the rooftops the industry needs to present a positive message and positive reasons for people to go out. I think Fear Of Going Out is a real problem. I was listening to the chairman of the 1922 Committee on the radio a couple of days ago and he was asked whether he thought Boris Johnson was about to start changing the message, to start to loosen up the economy and he said he thought Boris was clearing his throat. I hope that is correct and I hope he is going to say something and retrieve some of that original messaging, to try to move that whole negativity into more positive territory, so the whole nation can feel it can start getting back to normal.” Last week McVeigh launched #ProjectPint, which promotes a swift and safe return to restaurants and drinking venues. #ProjectPint features a centrepiece petition asking the government to “Free the Pint” – to allow all eating and drinking venues to reopen, and to take care of their customers, while adhering to social distancing. McVeigh will share more of his thoughts in the video, which will be released on Wednesday (10 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 anne.steele@propelinfo.com to sign up.

NTIA warns against independent arbitration action for business interruption claims until FCA test case completes: The Night Time Industry Association (NTIA) has warned operators against pursuing independent arbitration action against insurers for business interruption claims until the Financial Conduct Authority (FCA) completes its High Court Action. The NTIA said the result would be legally binding on the insurers that are parties to the test case in respect of the interpretation of the representative sample of policy wordings considered by the court. The trade body added it would also provide persuasive guidance for the interpretation of similar policy wordings and claims that can be taken into account in other court cases – including in Scotland and Northern Ireland, by the Financial Ombudsman Service and by the FCA – in looking at whether insurers are handling claims fairly. The NTIA said the test case was not intended to encompass all possible disputes, but to resolve some key contractual uncertainties and “causation” issues to provide clarity for policyholders and insurers. It will not determine how much is payable under individual policies, but will provide the basis for doing so. NTIA chief executive Michael Kill said: “We see no advantage for claimants pursuing independent arbitration action until the FCA has completed its High Court action, and fear many claimants are being led down a pathway where the potential winnings through individual arbitration could see many walk away with a considerable amount of their claim being consumed by costs.” The test case in the High Court, scheduled for early July, will look at 17 representative policy wordings, while eight insurers will be defendants. They are Arch Insurance, Argenta Syndicate Management, Ecclesiastical Insurance Office, Hiscox, MS Amlin Underwriting, QBE, Royal & Sun Alliance, and Zurich. Policies from Allianz, American International Group, Aspen, Aviva, Axa, Chubb, Liberty Mutual and Protector also include the wording to be tested in court.

UK hotel bookings up 45% in past week: Hotel bookings in the UK from July have seen a 45% rise in the past week, according to data from lastminute.com. Areas that have particular seen a surge in bookings include Manchester, which is up 300% in the past seven days; Blackpool and Bristol, which have both seen a 200% jump; and London, where they have risen 140%. Similarly, in a survey commissioned by lastminute.com, it was reported 33% of Brits intend to stay in the UK this summer.

SIBA and MPs call on chancellor to slash beer duty and extend business rates support to protect breweries: The Society of Independent Brewers (SIBA) and MPs have called on chancellor Rishi Sunak to slash beer duty and extend business rate support to secure the survival of the UK’s independent breweries. The coronavirus crisis has seen sales among the UK’s craft brewers drop 82% and about 65% “mothball” their operations. A total of 14 MPs from across the political spectrum have signed the joint letter to the chancellor in support of the campaign issued by Ben Everitt, MP for Milton Keynes North, and SIBA. Dozens more MPs have raised the campaign directly with the chancellor on behalf of breweries in their constituencies. To give the UK’s brewers a fighting chance of survival the letter calls on the chancellor to halve beer duty bills for all British-owned independent brewers based on the rate they paid last year. It also calls for the business rates grants and holidays offered to the retail, hospitality and leisure sectors be extended to breweries. MPs argue this direct injection of cash flow will protect and secure the thousands of jobs in brewing and the supply chain. With beer production at a record low this year because of the pandemic, the letter also calls for HM Revenue & Customs to take account of this in its duty calculations and give brewers more time to pay what they owe. Brewers would also like to see prompter payments to keep them afloat with a national standard secured 30-day payment term from customers. And to secure the sustainability of the sector, the chancellor is being asked to positively reform Small Breweries’ Relief, which has been under review by the Treasury since 2018. 

Deliveroo and restaurant partners hit 500,000 free NHS meals target: Deliveroo and its restaurant partners have delivered half a million free meals to NHS heroes working on the front line and other vulnerable groups, hitting the campaign target the company set two months ago. Front line NHS staff across 103 cities and 1,000 hospital sites in the UK have enjoyed free meals from 43 restaurant partners, which include Casual Dining Group-owned Bella Italia, Nando’s, Pizza Hut and Tortilla. The 500,000th delivery was made to the Bristol Infirmary Hospital. To mark meeting the campaign target, and in recognition of the work of front line staff, Deliveroo has said it will offer 70,000 £10 discount vouchers to NHS staff, who have previously signed up to Deliveroo, and will deliver another 100,000 free meals throughout June. In total, the campaign will deliver 600,000 free meals and more than 150,000 discount vouchers to NHS staff. These discounts follow the 85,000 £20 vouchers made available in April, meaning NHS workers will have saved a total of £2.4m in food costs from Deliveroo. The company’s customers have raised almost £600,000 towards the free meals while corporate companies have also made donations. Deliveroo will continue to fund-raise in-app. Any excess funding not spent on food or delivery will be given directly to selected NHS trusts.

Job of the day: COREcruitment is supporting a food product brand as it plans for future growth, both in the on and off-trade markets. To support the changes and promotion of the brand, the business is looking to appoint a senior brand and marketing director. It is seeking a creative and ambitious individual to join a passionate team during its growth phase. The salary is circa £95,000 and head office is based in London. Anyone interested can email their CV to Abbie@corecruitment.com 
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

McDonald’s to start offering takeaway and click-and-collect, plans breakfast trial: McDonald's is to begin offering in-store takeaway and click-and-collect from next week, beginning with a pilot scheme at service stations. Following the opening of more than 1,000 restaurants offering delivery and drive-thru, the company is planning to offer takeaway from Wednesday, 17 June. Initially, the company will test the scheme at 11 of the 29 restaurants it has at Roadchef sites before rolling it out gradually to high streets across the UK and Ireland. The company has yet to name the restaurants that will reopen for takeaway, saying it would confirm details “nearer the time”. McDonald's social distancing measures for sites offering takeaway will include the use of a one-way system, a limit on the number of customers allowed in store at one time and the closure of all dining spaces and toilets. The group also announced the return of the McDonald's breakfast. A small group of yet to be confirmed restaurants will offer a breakfast service from 24 June, with a plan to roll out the menu for delivery, drive-thru and takeaway in July. McDonald’s UK and Ireland chief executive Paul Pomroy said: “Over the past four weeks, we have carefully reopened more than 1,000 restaurants for drive-thru or delivery, only progressing to new channels and more restaurants when we were confident that we could provide a safe working environment for our people. Following a closed test in London last month, I am pleased to confirm we will begin reopening for takeaway and click-and-collect. We’re taking our time to get this right, reviewing our processes before we gradually roll-out to high streets, towns and city centres.” Roadchef chief executive Mark Fox added: “This is an exciting step forward as we start to bring back the choice and brands that visitors love. We are working closely with the McDonald’s team to ensure we deliver our usual high standard of service while our teams and customers are kept safe.”

Tortilla ‘encouraged’ by numbers coming out of reopened sites: Richard Morris, chief executive of Tortilla, the Quilvest-backed fast-casual Mexican concept, has told Propel the business has been “encouraged by the numbers” being produced by the 11 sites it has so far reopened for delivery and collection. Morris said the group would reopen another four sites on Wednesday (10 June) – in Liverpool, Watford, Bristol and Cardiff – with a further potential wave of sites coming back online near the end of the month. Morris said: “We've been encouraged by the numbers, no doubt helped by not many businesses being open. We believe things will start to level out now as the lock-down eases and the big boys enter the game!” Talking to Propel last month, Morris said opening more delivery kitchens had “moved high up on the agenda” for the business. 

Byron reopens two sites for delivery only: Better burger brand Byron, which is currently in the midst of a sale process, has reopened two sites from its circa 50-strong estate for delivery only, Propel has learned. The Simon Wilkinson-led company has reopened its sites in Beak Street, Soho; and in Lothian Road, Edinburgh, for delivery through Deliveroo. It is thought it will look to add more sites over the coming weeks. Last month the company instructed KPMG to explore a sale of the business. KPMG was also understood to be continuing to explore the covid-19 government support initiatives and also has a mandate to explore other options including a refinancing. Propel understands at least two bids for the business were taken forward from last week’s deadline. It is thought at least one would involve current backer Three Hills Capital Partners retaining some level of equity stake in the brand. Byron made the decision to close all sites with effect from 18 March – two days before the government mandate – including its delivery sites “in order to protect employees and guests”. 

PizzaExpress launches click-and-collect service at reopened London restaurants: PizzaExpress has launched click-and-collect at the 13 restaurants in London it has reopened for delivery. The company said the move formed part of its phased reopening plans and have been developed in line with government advice. As well as limited menus, additional safety measures in place at the reopened restaurants include protective screens and heightened cleaning. Managing director Zoe Bowley said: “Our number one priority is to protect the safety and well-being of our teams and customers. Having undertaken a successful delivery-only trial in 13 of our restaurants, we’re pleased to be rolling this out further to click-and-collect customers in the same 13 restaurants only for the time being. By launching the next stage of our trial, we hope to gradually and safely begin to bring the PizzaExpress experience back to the UK.”

Coffee#1 begins phased reopening of circa 100-strong estate: Coffee#1, the Caffe Nero-backed chain, has begun a phased reopening of its circa 100-strong estate, with a ten-strong batch of sites reopening for takeaway only, Propel has learned. The company has reopened its sites in Albany Road (Cardiff), Bath, Clevedon, Daventry, Fishponds, Henleaze, Penarth, Pontcanna, Stroud and Thornbury. The business said more of its sites are set to reopen in the coming weeks. Coffee#1 opened its first store in 2001 and now operates across Wales, the south west, south coast and the Midlands. Caffe Nero acquired a majority stake in the business at the start of last year. 

Tasty begins reopening Dim T sites for delivery and click-and-collect: Tasty, the AIM-listed operator of the Wildwood and Dim T brands, has reopened four sites under the latter brand for delivery and collection, Propel has learned. The company has reopened its sites in London’s Victoria, Hampstead, Winchester and Whiteley in Hampshire, for delivery via Deliveroo and click-and-collect. Its remaining site in Charlotte Street, London, remains closed for now. Tasty, which launched virtual delivery brand Out The Box earlier this year, has yet to reopen any of its Wildwood sites for delivery or collection. At the start of the year, the company announced the sale of its Dim T site in More London for a cash consideration of £2m. The venue is currently being fitted out as a further central London flagship site for better burger brand Five Guys. 

Hawksmoor plans restaurant reopening and at-home offer: Graphite Capital-backed steak restaurant group Hawksmoor has said it is gearing to launch an “at-home” delivery offer and it plans to open one of its restaurants in London “as soon as practical”. In an update, the eight-strong business said: “We’ve had four goals since we shut down in March – survive, bounce back, support our team and help others. Surviving has been tricky – the Coronavirus Job Retention Scheme has helped of course, but we haven’t been able to access the government-backed loan scheme yet, and have only had a very small number of positive conversations with landlords. But like Gloria Gaynor we will survive, and we’ve been part of talking to the government to try to make sure as much of our beloved industry survives too. Planning a bounce-back has kept us all going – the thought that not only will the restaurants reopen, but we’re going to try and do everything we can to make sure Hawksmoor is even better than before. This lock-down is a reminder that restaurants do so much more than feed us, they feed our souls. Restaurants are about people. Our plan is to open one restaurant in London as soon as practical, learn as much as we can about doing a great job in these new circumstances, and then apply that learning to getting the rest of the restaurants open as soon as possible after that, making sure we prioritise ‘doing it right’ over ‘doing it quickly’. We’ve also been working on a few ideas for ordering ‘Hawksmoor at Home’, so people can enjoy what we do in their own homes. We’ll be launching this soon in small numbers (again, we’d rather try and do something great than fast or in huge numbers, especially at the beginning!). We currently have almost 700 people on furlough, and one of the real joys about starting to open up restaurants will be bringing those who are able back to work.” The company said it has also cooked more than 10,000 meals for people across the country and was look to surpass 15,000 meals by the end of the month.

Qoot accelerates Vegan Dough Co roll-out across London: Qoot Restaurant Group, which operates a number of fast-growing brands in London, is accelerating the roll out of vegan pizza concept Vegan Dough Co across the capital, Propel has learned. The company is opening a further three locations in the next week – setting up delivery kitchens in Clapham, Covent Garden and Islington – and has plans to open standalone sites in the long term. This will mean six sites for the brand will have opened in the capital in the ten weeks since lock-down, joining sites in Crouch End, Tower Bridge and Wandsworth. It also operates out of the Erpingham House site in Norwich. Vegan Dough co-founder Loui Blake said: “Despite the obvious restrictions and potential difficulties launching new locations during a pandemic, we made the decision early on if the model worked, we would look to aggressively roll out the concept across London. We’ve prioritised locations that lack vegan options and selected sites that enable us to cover the greatest area. Our teams have been superb in scaling the concept and we’ve since been able to introduce new products, including our new vegan-filled doughnuts launching next week! Vegan Dough Co has received excellent support from the vegan community and beyond, so we’re excited to continue to grow the brand post-lock-down and longer term move to physical locations.” The company, which is bringing Kuwait chef Ahmed Al Bader’s hot sandwich concept 77 Josper Bar to the UK, has opened a number of delivery kitchens for its various brands, including The Lebanese Bakery and plant-based brand By Chloe. To support the delivery kitchen plans, last month Qoot hired appointed former Wagamama marketing director Andre Johnstone as operating partner.

Former Bravo MD Nurse joins Trust Inns: Harvey Nurse, the former managing director of Bravo Inns, has joined north west-based pub company Trust Inns as its new director of retail operations, Propel understands. Nurse left Bravo Inns at the end of last year after NewRiver acquired the 44-strong community pub company for £17.9m for its Hawthorn Leisure operation. Nurse, who previously had stints at Admiral Taverns and Marston’s, spent two years leading Bravo, which was added to Hawthorn’s managed pub estate. Trust Inns, which is led by Mark Brown, former head of legal at Admiral Taverns, has an estate of 350 leased and tenanted pubs nationwide.

Patty & Bun to launch chicken concept: Patty & Bun, the better burger concept led by Joe Grossman, is to launch a chicken concept. Sidechick will be available in east London via Deliveroo from Thursday (11 June). The chicken will be served either half or whole, with a choice of za’atar, garlic, honey, olive oil and lemon; clarified butter, herbs and lemon; and piri piri. There will be a range of vegetables and salads as well as sauces alongside a selection of beer, three cocktails, natural wine and homemade soft drinks. Plans are also in place to open a Sidechick pop-up in Kingly Street, Soho, when lock-down rules allow. Grossmann said: “Aligned with Patty & Bun, we wanted to take something humble and absolutely delicious and put our spin on it. We’ve been working on this concept now for more than a year, simmering away in the background. We thought what better time to launch than a pandemic when all you want is some comforting, nourishing flavours that slap you round the face and give you a nice big hug!” Last year Patty & Bun “tested the water” by operating chicken concept Jefferies as part of the summer line-up at The Prince and at Pergola Olympia, which are both operated by Incipio Group.

Ohannes Burger to open three more sites in East Midlands: Ohannes Burger, the gourmet burger restaurant with 16 restaurants across Turkey, is set to open a further three sites in the East Midlands. The brand made its UK debut in November with an opening in Arnold on the outskirts of Nottingham and added a second outlet in the city centre last month. They are currently offering a click-and-collect and delivery service due to the government restrictions. Now Ohannes Burger is set to open three more before the end of July as well as move to a larger distribution unit. The restaurants will open in Mansfield Road, Nottingham; Bulwell; and in Mansfield town centre. Owner Mehmet Ali Yazicioglu started the company in Turkey almost ten years ago. His firm will shortly be moving to a new headquarters and distribution hub in Nottingham, reports The Business Desk.

Lunya owners to close Manchester restaurant to protect Liverpool sites: Restaurateurs Peter and Elaine Kinsella are closing the Manchester site of their Catalan restaurant concept Lunya. The La Lunya site in Barton Arcade will not reopen when the government lifts its lock-down restrictions on the sector. The Kinsellas said they needed to take the action to protect their two Liverpool sites, at the Royal Albert Dock and Hanover Street in the city centre. They added the business cannot hope to survive by running three restaurants in vastly different conditions governed by social distancing. Peter Kinsella said: “No matter what projections we do and what actions we try, sadly we cannot find a way to make it all work. We think there is a way for Lunya to have a ‘virtual’ presence in Manchester, but sadly not operating as a restaurant, deli and bar in Barton Arcade.” He added attempts to make the Manchester site viable through discussions with its landlord, Lunya’s lenders and government agencies had proved unsuccessful. But he is in discussions with potential partners about a central venue in Manchester for a click-and-collect service. He added: “If we can find a smaller, and more cost-effective site we may well be back in years to come.”

Airship hires Sam Brown: Sector technology company Airship have appointed Sam Brown to the role of sales director as of 1 July. Previously with Wireless Social, in his new role Brown will manage the sales and customer success teams for both Airship and its gift card platform Toggle. Airship chief executive Dan Brookman said: “We've worked with Wireless Social closely over the past few years, and I've always been impressed with Sam’s passion and love for the hospitality sector. His addition to the Airship and Toggle teams will have a positive impact for our customers, as well as ensuring a continued positive relationship with Wireless Social.” Brown added: “Watching Dan and the team at Airship take Wireless Social’s Presence Analytics data, and use it to increase customer loyalty and visit frequency for hospitality operators, has been fascinating. In addition, the recent introduction of Toggle is a real game changer in the sector. A real priority will be maintaining our close relationship with Wireless Social, so all of our mutual customers can continue to get the maximum from our partnership.”
Airship is a Propel BeatTheVirus campaign member

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