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Wed 17th Jun 2020 - Westminster reopening strategy, Giggling Squid secures £5m loan, Domino’s UK
Westminster Council sets out reopening strategy for hospitality: Westminster Council has published its plans to help the hospitality industry reopen, including the temporary closure of a number of roads to make room for external seating. The council said it will close some roads to traffic at certain times of the day and also widen pavements in appropriate areas of the city. It stated: “This will create the space needed for restaurants, cafes and similar businesses to put tables and chairs outside. Roads will be closed using ‘soft’ measures which can be installed and removed at the beginning and end of each timed period such as barriers and cones. These areas will be marshalled as required. Local arrangements in areas of high-density hospitality, such as Soho, will be made with venue operators and residents at a street level. This will ensure that there are not clashes in the use of space that cause wider issues. This approach will see clearly agreed proposals on the space operators can use. Although we are proposing a selection of key locations to create more space for tables and chairs, we welcome proposals for certain smaller streets to be included where this is practicable.” The council said that in order to achieve the necessary balance between helping businesses recover, provide more capacity to support cycling and walking as well as the critical need to protect residents’ interests, it had developed the following criteria which we will apply to decisions for timed street closures: Timed street closures will be considered where – there is a heavy concentration of food and drink retailers; extra space is needed for the use table and chairs (subject to appropriate licences being granted); security and safety has been considered, including appropriate access for emergency vehicles; they support a thriving economy; and they will help with social distancing. They will not be considered where: Footway extension would create traffic congestion, including on red routes; the proposed street is in a predominantly residential area; the cumulative impact on residents would be excessive; tables and chairs would block pavements for pedestrians; and they would be at odds with its statutory duties as a highway authority. Operators will still need planning consent and a tables and chairs licence, but there will be a fast track authorisation process. At the same time, Premises Licences will need to be varied to authorise off sales of alcohol to new seating areas if not already permitted. The council said: “Unfortunately, we cannot allow vertical drinking (people standing and drinking) outside venues as we believe this will lead to a contravention of the government guidance on social distancing and could cause significant harm to local residential amenity. We will also consider proposals from businesses without existing tables and chairs licences where it can clearly be shown how it could be managed responsibly.”

Giggling Squid secures immediate future with £5m loan: Giggling Squid, the Thai restaurant brand founded by Andy and Pranee Laurillard, has secured its immediate future after obtaining a £5m loan through Barclays. Andy Laurillard told Propel that the new funding secured through the government’s Coronavirus Business Interruption Loan (CBIL) scheme would make sure that the 35-strong business would be at “the starting line for when the restaurant sector began its journey back to normality”. He said: “After much toing and froing we are very grateful to have secured this funding from Barclays. When the government mandated lockdown, we saw our revenues fall from a positive like-for-like level to zero over nine days at the end of March 2020. The business urgently needed liquidity to survive the crisis. This new funding secures the company’s immediate future and means we will be at the starting line for when the sector is given the green light to start again.” Laurillard said the business has also had constructive conversations with its landlords regarding ways forward in terms of its rent commitments. Last month, the company reopened the majority of its 35 sites for delivery-only. On the new funding, Mike Saul, head of hospitality and leisure at Barclays, said: “We are working closely with clients like Giggling Squid to provide the vital funding they need to help them come out strongly on the other side and we look forward to seeing their restaurants open and operating once again.”

Irish tourism department recommends potential reduction in two-metre rule: The Department of Transport and Tourism in Ireland (Fáilte Ireland) has indicated that one-metre social distancing could potentially be introduced in pubs. The new guidelines refer to various measures and arrangements, including a potential reduction of the current two-metre physical distancing restriction to one-metre in certain circumstances. Fáilte Ireland’s guidelines for pubs will be published in the coming days. The guidelines will state that from 29 June pubs that serve food and meet other features expected of a restaurant may reopen. Any food offering will be required to be a substantial meal, as defined by the Intoxicating Liquor Act 1962: “The meal is such as might be expected to be served as a main midday or evening meal or as a main course in either such meal and will be required to be of a kind for which it would be reasonable to charge not less than €9.”

Domino’s UK reports like-for-like sales up 6.1% post-lockdown: Domino’s Pizza UK has reports like-for-like sales rose 6.1% between 23 March and 14 June – although they dropped by 9.2% in Ireland in the period. Chief executive Dominic Paul said: “I joined the group at a time of unprecedented trading conditions and have spent my first few weeks as chief executive becoming fully immersed in the business. I have been hugely impressed by the hard work, dedication and agility of our colleagues and our franchisee partners to keep Domino’s delivering, and I would like to say a big thank you to the entire team. Throughout this crisis we have focused on looking after our people and working together with our franchisee partners to safely serve our customers and help our communities. I am proud of the performance of our system during this period, and that the vast majority of our stores have remained open. I am looking forward to giving a more detailed update on our performance and sharing my first impressions of the business at our first half results presentation in August.” The company added: “In the UK, like-for-like sales growth has been strong during the first half of the year to date. Trading in the period prior to the lockdown was robust, driven by increased order count. At the start of the lockdown period we moved quickly to ensure the business continued to trade safely, including stopping customer collections. For context, in 2019, collection accounted for 21% of sales and 31% of orders. We saw our sales performance from delivery grow rapidly with an increase in order count and a growth in items per order and therefore average ticket. This increase in sales from delivery more than offset the lack of sales from collection, however total order count has declined during the period. We have also seen a change in consumer purchasing behaviour and average basket composition, with a higher proportion of sides and desserts, which, whilst aiding our sales performance, has impacted our margins. Our business in Ireland, which is a much smaller part of the group, has seen a weaker performance, against a strong comparative last year. We believe that wider consumer spending weakness due to the covid-19 lockdown has been more pronounced in Ireland. Our determination to keep serving our customers, and to help them stay at home, has resulted in record levels of customer satisfaction over recent weeks, in both the UK and Ireland. We have made significant changes to our operations in our core UK and Ireland business to ensure we could continue to trade whilst protecting colleagues and customers: Throughout the period of lockdown we have served customers with entirely contact free delivery and have ceased in-store collection. As the lockdown begins to ease, we are now seeing a gradual re-introduction of contact free collection across the system, although we expect this to take some time to recover to prior levels; Working together with our franchisees, we have rationalised our menu offering, in order to ensure safe in-store operations for colleagues; Our supply chain has maintained full availability to stores throughout the period. We have rolled out and embedded measures to protect our supply chain centres, our distribution network and our supply chain centre colleagues, which have resulted in significant incremental costs for the business. These include re-routing all store deliveries to stop two-person deliveries, ensuring all stores are closed during restocking, changing our supply chain shift patterns and paying salary premiums; We have supported our franchisee partners, including changing payment terms so that cash passes through the system quicker, and incurring the costs of items necessary to ensure safe operations such as contact free delivery boxes and face masks; We have supported the amazing work of key workers in our communities through the funding of a key worker pizza giveaway. These significant and necessary changes have meant that we have incurred considerable additional costs across our operations during the lockdown period, which have more than offset the benefits from the increased sales we have achieved. We therefore expect that Ebitda for the first half of the year will be slightly lower year on year. At this time, we cannot be certain how long the changes we have made to our operations, and the associated costs will continue, as this will be determined by the wider covid-19 backdrop. These unprecedented times also continue to provide an uncertain trading backdrop. As such, we remain unable to provide guidance for the full year.” The company added: “On 22 May we were pleased to announce that, following shareholder approval, we completed the sale of Domino’s Norway. This transaction strengthens the group’s prospects as the Norwegian business had incurred operating losses for a number of years and represented a recurring cash outflow for the group. In addition, as part of the sale, the company is now the owner of the entire issued share capital of Domino’s Sweden. We have seen a mixed sales performance across our three remaining directly operated international businesses (Sweden, Switzerland and Iceland) during the covid-19 period. Sales have been particularly impacted in Switzerland, driven by the temporary closure of a number of stores. We are working hard to mitigate the impact of our discontinued international businesses on group cash flow.”

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