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Fri 19th Jun 2020 - Propel Friday News Briefing

Story of the Day: 

Scottish government publishes sector reopening guidelines: The Scottish government has published its reopening guidelines for the hospitality and tourism sectors. As well as reaffirming the proposed reopening of the industry from 15 July, the document includes a checklist for businesses, including publication of a risk assessment that must also be written down for companies with more than five employees. It includes sections on workforce planning, capacity management and staff training, all planned around two-metre social distancing. First minister Nicola Sturgeon confirmed social distancing measures would be subject to rigorous research with an announcement on any change from the current two-metre parameter unlikely for another two weeks. The Scottish government’s guidance also refers to UKHospitality’s guidelines for the reopening of hospitality businesses in Scotland, which are also published on Thursday (18 June). Meanwhile, Scottish operators have been told the decision on reopening outdoor areas of pubs, bars and other licensed venues won’t be reviewed until 2 July. Businesses were hoping a date would be set on Thursday as Sturgeon announced a further relaxation of lock-down measures – including most shops in the country being able to reopen from 29 June. Willie Macleod, UKHospitality executive director for Scotland, said: “It is heartening to have the Scottish government’s guidance, and the clarity it brings for businesses. It should provide an end to many of the uncertainties that have persisted over recent weeks for businesses that have been hit very hard by this crisis, and allow planning to get underway for reopening. Even with the greater certainty the reopening guidance now provides, we should not forget businesses have been hit very hard and the sector remains in a fragile state. We must have continued sector-specific support from both the UK and Scottish governments.” Scottish Beer & Pub Association chief executive Emma McClarkin added: “Continuing to operate at a two-metre social distance will make opening financially unviable for many and could result in more than 23,600 job losses in our sector alone. Moving to the World Health Organisation-backed one metre distance that many other countries have adopted would allow the majority of premises to safely open again.” 

Industry News:

Mark Wingett looks at the latest evolution of YO! in his latest Premium column: Propel insights editor Mark Wingett talks to YO! chief executive Richard Hodgson about the brand’s new restaurant concept, which has been developed for a covid-influenced consumer landscape, as part of the latest Propel Premium column, which will be sent to subscribers on Friday (19 June) at 5pm. Meanwhile, Draft House founder Charlie McVeigh looks at where the industry goes from here; and White Rabbit Fund founder Chris Miller explores the challenges and opportunities for operators in the capital. There will also be the latest sector rumblings from Premium Diary. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from Mark Wingett. Subscribers also receive access to our database of multi-site companies, which has grown to 1,600 businesses. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email

‘Supply chain creating new dynamic that presents real risk to operators’: The supply chain is already creating a new dynamic that presents real risks to operators compared with before the coronavirus pandemic, Prestige Purchasing chairman David Read has argued. Writing in this week’s Friday Opinion, Read said: “When times are good everyone in our value chain gets to feast well from the same table. Cash flows easily through the chain, and risks are relatively low as a result. But the lock-down has changed that and the recession that is now emerging is already creating a new dynamic. Many operator balance sheets are now showing an alarming lack of liquidity, and suppliers are working harder than ever to spot customers at risk of failure. When a supplier’s balance sheet is strong the temptation to take a risk on a customer is strong too, but when the whole value chain is squeezed on cash, credit terms fall and pricing generally rises. And there are further challenges. Order volumes will be at perhaps 40% to 70% of 2019 levels for some time. Wholesale prices factor in the cost of distribution, but when that cost is not fully covered at the historic price the choice is a stark one – put up prices or lose money. At a very rough estimate our sector’s weekly orders on suppliers fell in March from roughly £700m to about £40m. The impact on the retail sector was enormous, with empty shelves and lack of choice commonplace. In the weeks ahead that number will return to somewhere above £300m. The risks for suppliers, particularly for fresh product will be large. Even if product is available in the market (which is a risk in itself) order too little and operators will get short supply, order too much and product become unsaleable. As a sector we have an amazing supply chain, and one that we perhaps in the past have taken for granted. But these new dynamics present risks for operators compared with pre-pandemic.” Read will share more of his thoughts in this week’s Friday Opinion, which will be sent out on Friday (19 June) at 11am.
Prestige Purchasing is a Propel BeatTheVirus campaign member

Ed Standring to feature in latest ‘navigating the coronavirus’ video: In the latest in Propel's video interviews with leading operators about “navigating the coronavirus” pandemic, Elliotts chief executive Ann Elliott talks to Ed Standring, chief executive of Hache and Hush Restaurants, about the inspirational Feed our Frontline initiative, from an initial Zoom meeting to delivering hundreds of thousands of meals and drinks to NHS workers; and the creation of and thinking behind new initiative Hospitality Feeds. The video will be released on Friday (19 June).

Boxpark founder warns of retail and hospitality sector ‘Armageddon’: Boxpark founder Roger Wade has warned the retail and hospitality sectors are “on a collision course” to Armageddon as shoppers returned to UK high streets after 12 weeks in lock-down. Wade said if landlords, tenants and government did not come together to address the rent crisis, up to 50% of retail and hospitality operators were in danger of going under. He told Property Week: “We’re certainly on course for collision. At the end of June, there’s going to be up to six months outstanding rent and I think you could have up to 50% of retail and hospitality businesses that won’t survive lock-down.” He again called on landlords and tenants to set aside their differences and work together to find a “middle ground” on the issue of rent. Wade described the proposed code of practice to encourage “fair and transparent discussions over rental payment” as little more than “a token gesture” and called for a more robust framework that could be applied across the industry. Wade, who is both a landlord and tenant, added for operators to survive, three things needed to happen – the social distancing rule needed to be reduced from two metres to one metre; restaurants, cafes and hotels needed to reopen on 4 July; and tenants needed to take a more holistic approach to solving their rent issues with landlords. He said he also wanted to see the three-month moratorium on commercial landlord sanctions against tenants for non-payment, which is currently due to expire at the end of the month, extended “until we find the framework to resolve the current rent crisis”. Wade also questioned the likely impact of the government’s new £50m Reopening High Streets Safely Fund, likening it to a band-aid. He added: “If we want to create ghost towns up and down our country, then, you know what, do nothing. We need urgent measures, so initiatives like overhauling business rates and encouraging turnover rents.”

Businesses within hospitality supply chain eligible for grant, government confirms: Businesses within the hospitality supply chain affected by the coronavirus crisis are eligible for discretionary grants, the government has clarified. It has published a revised FAQ section clarifying suppliers to the retail, hospitality and leisure sectors that have lost demand can be awarded discretionary grants by local authorities. Award amounts can be £25,000, £10,000 or any amount under £10,000. UKHospitality chief executive Kate Nicholls said: “It’s good to see the government acknowledging businesses in the supply chain have been hit hard too, and clarification councils can support them with a grant. We urge councils to respond positively to applications by supply chain businesses hit by coronavirus as these businesses are just as vital to the health of hospitality. Support needs to be comprehensive and applied right across the entire scope of the sector if we are to reopen successfully and keep as many businesses afloat and as many jobs secure as possible.”
UKHospitality is a Propel BeatTheVirus campaign member

London footfall increases following reopening of non-essential shops, but no ‘max exodus’ to high street: Footfall in London has increased following the reopening of non-essential shops this week, but “not the mass exodus” to the high street that some reports have suggested, according to the latest data from Wi-Fi solutions provider Wireless Social. Its analysis showed in Oxford Street, footfall this week was still down between 55% and 65% between Monday (15) and Wednesday (17 June) compared with the February average. In Kensington High Street, footfall over the three days was down between 68% and 73% compared with the February average, but was slightly up from the previous week. In Bayswater, footfall remained down between 52% and 60% compared with the February average and about 70% in Covent Garden, although again there had been a slight pick-up from the previous week. Footfall in Leicester Square is still down by more than 80% as was Wardour Street in Soho. Wireless Social chief executive Julian Ross said: “I suspect the weather has been impacting a number of shoppers, who possibly need more encouragement than a damp and drizzly day. We can see a very gradual increase in footfall, but not the headline grabbing statistics we’ve been reading about. That's not to say there won't have been increased activity across shops, with queues as publicised, but the overall picture is still relatively steady.”
Wireless Social is a Propel BeatTheVirus campaign member

Job of the day: COREcruitment is supporting a hotel business that is keen to appoint a new payroll manager. This is a standalone position and would ideally suit an organised payroll manager who is comfortable working independently with full autonomy for the department. The position requires extensive payroll knowledge, excellent project management and communications skills as well a good exposure to HM Revenue & Customs auditing and TNA systems. A salary of up to £45,000 will be considered. Experienced payroll managers, based in the north west of England, interested in finding out more can email
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Wadworth consults over job losses, plans phased reopening: Devizes-based brewer and retailer Wadworth has begun a consultation with staff, which could lead to just under 60 job losses, as it eyes a phased reopening of its managed estate. According to the Wiltshire Gazette & Herald, employees were called to a meeting last week with chief executive Chris Welham and chairman Charles Bartholomew and were told the effect of the coronavirus emergency meant cutbacks had to be made and restructuring would take place. Welham confirmed consultation over 57 jobs had started. He said the brewery would be supporting tenanted pubs to open as soon as they were ready but only 12 managed pubs would open in a first phase once go-ahead was given. Last month Welham said plans for a new brewery to be built on the outskirts of Devizes had been put on hold. This week he told the Gazette & Herald despite continuing to brew beer for sale via its online shop and supermarkets, the company was looking to rebalance its cost base in the face of a “new normal” as it looks to restart trading its pubs. He said “In common with many others, the covid-19 crisis has been extremely challenging for us as we have had to shut our pubs. In the early part of this year, we had a clear strategy to build a new brewery and adapt our managed house estate enabling us to become a much leaner and efficient business. But with covid-19 and a phased restart to trading, we anticipate lower consumer demand and the need for continued physical distancing will continue to exert pressure on revenue and profit for the foreseeable future. The headroom we created in our bank borrowings for our new brewery is being used throughout this period of closure and as a result our plans for a new brewery have been placed on indefinite hold. To enable us to protect the long-term interests of the company, we have announced a consultation period that will impact a number of roles across our teams in our brewery, head office and managed pubs. We know we have some difficult decisions ahead to ensure that businesses such as ours can appropriately come through this extraordinary period. It remains our overall intention to protect as many jobs as we can.”

Hawthorn Leisure signs off £4.5m investment in estate ‘to signal commitment to sector’: Mark Davies, chief executive of Hawthorn Leisure, the pub operations arm of NewRiver, has told Propel it has just signed off £4.5m worth of investment for the estate, including in outside areas. While many companies have cut back or curtailed capital expenditure in light of the coronavirus pandemic, Davies said it was making the investment because it “believed in the future of the sector” and it “will bounce back stronger than ever”. Hawthorn plans to invest in “lots of little projects”, including improvements to outside space that Davies said would help pubs take advantage of the postponed Euro 2020 tournament that will now take next summer. About 70% of the circa 720-strong Hawthorn estate currently has outside gardens. Speaking following the company’s full-year results, Davies added: “We have no debt and are very well financed and we think it’s very important to be showing our commitment to pubs by making these investments. Having bought Bravo Inns at the end of last year, one thing we noticed is it does outdoor space very well and we think we can replicate that. While we are making this initial investment, we hope we can increase it depending how trading goes once the lock-down lifts.” Davies said the company was continuing to support its tenants once they reopen by providing then with a grant that equates to effectively a two-month rent-free period in July and August. While a total of 75% of its tenants have so far indicated they will reopen on 4 July if the government gives the green light, the company expects that figure to increase once Whitehall issues the long-awaited guidelines. The company also expects all its 130-strong operator managed estate will reopen. Davies said it was imperative the guidelines for reopening were published by the end of the week to give pubs adequate time to prepare for reopening – and said the whole situation was “very frustrating”. About 70% of its pubs have now cleared their beer cellars ready for fresh deliveries, which the company expects to start ordering from next week. And while the business is currently working on reopening under two-metre social distancing, Davies said he was confident the government would “see sense” and reduce this to one metre in line with World Health Organisation guidelines. Davies said while the focus was on the current estate, he expected acquisition opportunities to surface in the autumn, which the company would be ready to act on where appropriate. He added while the group continued to be “inundated” with queries about opening “dark kitchens” within its pubs that project had also been put on the back burner. “Before coronavirus our like-for-likes were up 5.9%, and we were still up 2.3% for the year,” said Davies. “It’s going to take some time and normal trading might not resume until next spring but we want to get back to those levels.” 

Caffe Nero to have half of estate reopen by 5 July, hits 35,000 free coffee milestone for NHS staff: Caffe Nero has said it will have more than 400 of its sites back open by 5 July. The company, which has more than 800 outlets across the UK, has so far reopened about 250 stores, It has also given 35,000 free coffees to NHS workers since initially reopening eight stores on a trial basis at the start of May. Founder and group chief executive Gerry Ford said: “These coffees are our way of saying thank for the amazing job NHS staff have been doing. As we reopen more and more stores, it’s great to be able to bring the offer to more and more people.” With the NHS’s 72nd anniversary taking place on 5 July, Caffe Nero will again be offering free coffee and hot drinks to NHS staff for the day to honour them and mark the occasion.

Supper sees ARR increase as 50 new restaurants prepare to come online: London-based premium food delivery service Supper has seen its annualised revenue increase by 15 times since its raised circa £1.5m of new funding in November. Venture capital fund Moscar Capital, which led that fund-raising round, said since that investment Supper’s investment had grown to an annual recurring revenue of £12m. On top of that, it is thought 50-plus restaurants are waiting to come on to the platform. Founded by Peter Georgiou in 2015, Supper uses a fleet of specially adapted scooters and directly employed drivers to cater for the premium end of the market, setting it apart from sector heavyweights such as Deliveroo and UberEats. It currently works with restaurants including Zuma, Hide, and Roka.

McDonald’s and Subway plan hiring spree: McDonald’s and Subway has announced plans to hire more staff across their restaurants in North America this summer. McDonald’s is expecting to take on 260,000 more employees while Subway has revealed it will recruit 50,000 workers, with job opportunities available ranging from entry-level to management. McDonald’s said it has also implemented almost 50 new safety procedures to protect staff and customers. These include wellness and temperature checks, social distancing floor stickers, protective barriers at order points, masks and gloves for employees with the addition of new procedures, and training for the opening of dine-in areas. Subway also said it had put in place similar procedures. Through a summer job at a McDonald’s restaurant, individuals not only learn work readiness skills on the job, they will also have the chance to further their education. This year marks the five-year anniversary of Archways to Opportunity and so far McDonald’s has given out more than $100m in tuition assistance and supported more than 55,000 restaurant workers and corporate employees. 

Yorkshire-based Jinnah Group secures six-figure loan to safeguard future: Yorkshire-based Jinnah Group is safeguarding jobs and looking to the future with the support of a six-figure Bounce Back loan from Lloyds Bank. Jinnah Group runs eight restaurants across north and west Yorkshire, seven under the group name and also The Viceroy of India in York. It also owns one retail outlet – United Cash & Carry. The company closed its doors in accordance with government guidelines in March, operating only a takeaway service from its restaurants at weekends and for limited hours at its retail store. Jinnah Group employs just over 100 full-time staff across the eight restaurants, 95% of whom have been placed on furlough, and a further 65 under its retail arm, of whom about half have been furloughed. Chief executive Saleem Akhtar told the Yorkshire Post: “When we had to close our restaurants, it was the lack of clarity that was the most worrying thing – not knowing what was coming next. There is still uncertainty, of course, but Lloyds Bank has helped to put us in a position where we can sit tight and wait and see, without constantly fearing for our future.” Jinnah Group started off as just a small corner shop in Bradford in 1983, before becoming predominantly a restaurant group in 1991. 

Chipotle launches Facebook and group ordering functions: Chipotle has expanded the functionality of its digital platforms by adding the option for its US customers to order through Facebook Messenger and in groups. From Monday (22 June), consumers on Facebook will be introduced to Chipotle’s new concierge bot, Pepper, which will navigate the customer through the ordering process – from finding a restaurant for pick-up or delivery to customising a bowl or burrito. Chipotle said the ordering experience mirrors the in-restaurant process, allowing guests to personalise each meal with light, standard or extra ingredient quantities and sides. Chief technology officer Curt Garner said: “It is critical we meet customers where they are spending time online and give guests ordering options that best fit their needs.” Group ordering is now available on its website. The feature allows customers to share a group order link so others can participate in the ordering process simultaneously. The order is handled by the host, and everyone can track its progress. In the first quarter, digital sales reached a record $372m. The company also added four million rewards members, many of whom have been the heaviest users during the pandemic.

DSC Group plans double opening for The Tapas Room: DSC Group is to open two new sites for its The Tapas Room concept, in Brixton and Battersea. The first of the outlets is set to launch in Brixton Village on 4 July, as long as government restrictions have been lifted. DSC Group started out in Brixton under the name of the Donostia Social Club in Pop Brixton, and is now returning with a slightly larger space inside the village. Next up will be Battersea, with a Tapas Room inside the new Battersea Spanish school. Along with the wine shop, tapas bar and delicatessen, the Battersea site will also offer wine tasting as well as cookery classes, reports Hot Dinners. DSC Group already operates The Tapas Room venues in Deptford and Tooting.

EasyHotel secures third French site: EasyHotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has signed a renewable 12-year lease with property firm Icade for a 180-bedroom hotel in Aubervilliers near Paris – its third in France. EasyHotel expects the hotel, located opposite the Front Populaire metro station, to be ready to open in the fourth quarter of 2022. Chief executive François Bacchetta said: “This is an exciting development that demonstrates EasyHotel’s commitment to growing in France and wider Europe. This will be our third hotel in the country, following the opening of our Nice hotel last year and the news we are developing a site near Paris-Charles de Gaulle airport. The hotel we have signed in Aubervilliers near Paris is a fantastic, lively location, attracting tourists, students and business people.”

Bohemia to become first UK Michelin-starred restaurant to reopen: Bohemia, on the island of Jersey, reopens on Saturday (20 June) and in doing so becomes the only Michelin-starred restaurant in Great Britain to be welcoming diners. Al fresco eating has been allowed in Jersey since May and from this week all restaurants have been allowed to reopen with social distancing measures in place and in adherence with government guidelines. Owner Lawrence Huggler said: “We have spent this past week preparing our new season menus and bringing the team up to speed on the new operating procedures. We are excited to welcome our customers back and were surprised when we realised, we will be the only Michelin-starred restaurant open in Great Britain. It really brings home how tough the lock-down has been and still is on the hospitality industry in particular. We hope it won’t be long before many more restaurants across the UK can reopen as we are this weekend and we can all start the road to recovery.” Bohemia has held a Michelin-star for 16 years. Now led by head chef Callum Graham, the venue showcases local and seasonal ingredients from Jersey in his modern-European dishes and tasting menus. Bohemia will relaunch with a new summer menu. The opening weekend will only offer guests a seven-course tasting menu with guests able to choose from the à la carte, a three-course set lunch menu, or one of the tasting menus from next week. Bohemia is located at The Club Hotel & Spa, which was also allowed to reopen this week.

Hotel operator Suite Hospitality enters administration: Suite Hospitality, which operates hotels in Exeter, Windsor and Belper, has entered administration after negotiations with landlords and creditors stalled. Ian Walker and Julie Palmer, of Begbies Traynor, have been appointed as administrators by company directors. The company operates three hotels – the Buckerell Lodge Hotel in Exeter, the Harte and Garter Hotel in Windsor and the Makeney Hall Hotel in Belper in the Peak District. All are operated under leases. It employs 110 staff, most of whom are currently under furlough. Bookings have been suspended until further notice. According to the administrators, Suite Hospitality suffered a disappointing 2019 and had been in talks with its major creditors and landlords as it sought to safeguard the future of the business. However, two of its larger landlords could not agree terms, leading to the decision to appoint administrators. Walker said: “We are working hard to transfer the business to new owners and preserve as many jobs as possible at the three hotels.” In its latest accounts, Suite Hospitality reported turnover of £7.7m from continuing operations for the year ending 30 December 2018, with gross profit of £3.7m and an operating loss of £105,851. Its fixed assets were valued at about £2.4m, with current assets at £772,736 and creditors of £2.6m.

Wi5 partners with host of new operators: Mobile order and pay company Wi5 has added a host of new operators to its books as the sector gears up for reopening. Multi-site operators including Aubaine, Boxpark, Drake & Morgan, Ole & Steen, Pho, Pizza Pilgrims and Puttshack are among the latest to have signed up. With the technology currently live for pick-up with a number of operators, including Pho and Crêpeaffaire, Wi5 is seeing usage increase daily and is expecting a surge in orders as its technology rolls out to more locations, including those offering order to table, with the industry set to reopen fully next month. Chief executive Prask Sutton said: “With reopening tentatively set for 4 July, we’re excited to partner with so many great restaurants, bars, pubs and hotels whose customers will imminently be ordering and paying safely and securely from their own devices, while adhering to the industry’s new social distancing and hygiene guidelines.” Wi5 is now working with a growing roster of international operators and will be rolling out in a number of new geographies from the third quarter of this year. 

Peter Spanton Drinks set for voluntary liquidation: Drinks mixer company Peter Spanton Drinks is being placed into voluntary liquidation, Propel has learned. Directors of Peter Spanton Drinks have appointed Steven Butt and James Money, of Rollings Butt, to oversee the process. The proposed liquidation will be approved unless 10% in value of the company’s creditors object by Thursday, 25 June. Peter Spanton launched Peter Spanton Drinks in 2011 while running the Vic Naylor’s restaurant in London’s Clerkenwell.

Devon-based hotel and country club goes on the market for excess of £5m: Devon-based the Highbullen Hotel, Golf & Country Club has been put up for sale for in excess of £5m.The Chapman family, which has owned the businesses since 2012, is marketing the site through agents Christie & Co and Savills. Occupying more than 115 acres of land, the hotel and wider estate comprise 39 en-suite bedrooms, four self-catering cottages, two restaurants – Laura Ashley and The Tea Room – along with a billiard room and guest lounges. The range of leisure facilities includes an 18-hole USGA specification golf course, outdoor tennis courts as well as an indoor and outdoor swimming pool. Outline planning permission has been granted for the development of 58 holiday home lodges within the grounds and an extension of 16-bedroom suites to the existing hotel. Reserved matters applications have also been submitted for four guest accommodation tree houses and 15 holiday lodges.

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