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Thu 9th Jul 2020 - Update: Burger King UK, Hawthorn Leisure, C&C Group, pub tenant ‘max exodus’ warning
Burger King UK could permanently shut 10% of outlets: Burger King UK chief executive Alasdair Murdoch has warned up to 1,600 jobs could be lost as a result of the coronavirus pandemic. Only about 370 of the company’s 530 UK stores have reopened since the lock-down began. Murdoch told the BBC’s Newscast the economic damage stemming from the crisis could ultimately force the company to permanently close up to 10% of its stores. He said: “We don’t want to lose any (jobs). We try very hard not to, but one’s got to assume somewhere between 5% and 10% of the restaurants might not be able to survive. It’s not just us – I think this applies to everyone out there in our industry.” Chancellor Rishi Sunak on Wednesday (8 July) unveiled a £30bn support package to help boost the economic recovery, which included plans to subsidise restaurant bills throughout August to encourage people to dine out. However Murdoch added government schemes do not do enough to compensate restaurants for the combination of fixed costs and lost sales throughout the pandemic, telling Newscast: “I don’t think you can ever get over the top of this problem.”

Hawthorn Leisure reports ‘encouraging’ start to trading following reopening weekend: Hawthorn Leisure, the pub operations arm of NewRiver, has reported an encouraging start to trading following reopening, with like-for-likes sales in its managed pubs up 4% over the weekend compared with the previous year. The company said more than 90% of its pubs in England were now open and plans were in place to reopen its sites in Scotland and Wales over the next two weeks. The company stated: “The Hawthorn team collectively visited 192 of our community pubs in England over the reopening weekend, providing support to our tenants and pub partners as they welcomed back customers in a safe and socially responsible way. Trading in our pubs has been encouraging so far, with our operator managed pubs delivering like-for-like sales growth of 4% over the reopening weekend, compared with the equivalent weekend last year. This performance reflects our focus on wet-led community pubs, and the fact more than 70% of our sites have outside space. We were pleased with the chancellor’s announcement of further support for the hospitality sector, which will be beneficial to our tenants and pub partners, and also recognises the vital role hospitality plays in the UK economy.”

Landlords bracing for ‘max exodus’ of pub tenants: Landlords are bracing for a “mass exodus” of tenants from the pub industry after only about half the country’s pubs and bars reopened on “Super Saturday”. A UKHospitality survey of more than 15,000 hospitality operators, shared with Property Week, revealed just 5% of pubs and bars stayed open during lock-down; 53% opened on or around Saturday (4 July); 16% plan to open later in July; 10% expect to open in August; 11% in September; and 5% in October or later. “I think we’re going to see a mass exodus from the pub industry; lots of people can’t see any light the end of the tunnel,” said Paul Tallentyre, executive director at Davis Coffer Lyons. “In summer, pubs with beer gardens will flourish, but those in cities or small venues will keep closed for a prolonged period as it is not viable to open them. There’s going to be so much debris out there. Keys are being tossed back left right and centre.” Tallentyre said “massive fallout” was likely on September quarter rent day because many operators would have been unable to pay rent for six months, meaning “the landlord can go straight after them”. Other parts of the hospitality sector saw even fewer operators reopen at the weekend, although in some cases a higher percentage had remained open during the lock-down. UKHospitality chief executive Kate Nicholls said hospitality operators “were always looking at a gradual, phased approach” to reopening because of the difficulty – particularly for large chains – of opening all their sites at once. In the survey, 20% of operators with more than 250 venues said most of their businesses would stay closed until at least October. “Until you get more footfall increase, venue operators are waiting,” she added. Nicholls added landlords had voiced concerns about the speed at which hospitality venues were reopening and what this meant in terms of their ability to pay rent. “That is the big concern, particularly for the city centre venues,” she said.

Hoxton Ventures to lead fund-raising for ‘host kitchen’ start-up Kbox: Hoxton Ventures, a backer of Deliveroo, is leading a £5m fund-raising round for “host kitchen” startup Kbox. Sky News reported the addition of Hoxton as an investor is designed to help Kbox expand its business quickly, both in the UK and internationally. The company said it is on track to work with 300 kitchens by the end of this year and 1,000 kitchens worldwide by December 2021, including in the UK, India, and the US. Kbox’s founder, Salima Vellani, also owns Absurd Bird, the five-strong chicken concept. Earlier this year, Absurd Bird teamed up with Kbox to deliver food boxes and essential supplies. The concept was previously part of Splendid Hospitality Group, which is led by the Boghani family. However, it is thought the Boghani family relinquished control of the business to the brand’s founder Vellani and venture capitalist Hussein Kanji at the turn of the year. Kanji is a founding partner of Hoxton Ventures and he represents its investments on the board of Deliveroo. On the new fund-raising round for Kbox, Vellani told Sky News: “The post-covid economy requires delivery-first brands and a delivery-first mindset. The old economics of investment in bricks-and-mortar and expansion of kitchen facilities is both unnecessary and increasingly unworkable. The answer isn’t new kitchens, it’s to use our existing ones better. Restaurant owner-operators are some of the hardest-working and [most] entrepreneurial people out there but they don’t have the time or often the resources to think about technology or innovation.” Kanji said Vellani and Kbox had already “established the potential for revolutionising the delivery space”.

C&C Group appoints David Forde as new group CEO: Drinks company C&C Group has appointed David Forde as its new group chief executive. Forde joins from Heineken where he has served as managing director of Heineken UK for the past seven years. He will join C&C at the latest in early 2021, following the completion of a customary notice period. C&C Group also announced the appointment of Patrick McMahon, current group strategy director, as group chief financial officer to succeed Jonathan Solesbury who has informed the board of his intention to retire with effect from 1 September. Forde, who replaces Stephen Glancey, who retired in February, has worked with Heineken for 32 years and has extensive experience in senior leadership positions across the business. Following Forde’s appointment, the C&C Group board has requested Stewart Gilliland continues in his role as interim executive chairman until Forde’s arrival, at which time Gilliland will revert to the role of non-executive chairman. In addition, the board has extended his role as non-executive chairman by an additional 12 months until the annual general meeting in 2022. Gilliland said: “Following a thorough evaluation of exceptional candidates for the position, we believe David has the requisite blend of brands, distribution and pub sector expertise to maximise the potential of our iconic brands and optimise the potential of our distribution capabilities. In Paddy we have a group chief financial officer with an inimitable understanding and experience of our business. His progression through senior leadership positions within the business and integral role in the transformative Matthew Clark and Bibendum transaction make him the natural successor to Jonathan and ideal fit for this position.” Forde added: “I am excited to be joining C&C, a company with great people, loved brands and a world class distribution infrastructure. I look forward, together with my new colleagues and the board, to further building the business into the future.”

Escape Hunt to reopen all eight English sites on Saturday: Escape Hunt, the operator of escape rooms, has said it will reopen all eight of its sites in England on Saturday (11 July). It also expects to reopen its Edinburgh site in the coming weeks, pending an announcement from the Scottish government. Escape hunt said “comprehensive” measures have been put in place to allow it to “meet and exceed” the social distancing and hygiene standards required. The company, which welcomed the announcement by the government of a reduction in VAT to 5% for attractions and the new job retention scheme bonus, has also re-commenced work in Norwich and Basingstoke, the two sites that were put on hold as a result of the lock down. Both sites are expected to open in the coming months, bringing the number of Escape Hunt branded locations in the UK to 11. Chief executive Richard Harpham said: “We are delighted to be unlocking the doors to our experiences across England and can’t wait for our customers to begin enjoying our escape rooms and outdoor adventures again. For any customers still unable to travel to our venues, we are pleased to announce we will be expanding the availability of our remote escape room experiences over the coming weeks.”

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