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Morning Briefing for pub, restaurant and food wervice operators

Wed 15th Jul 2020 - Update: McDonald’s, PizzaExpress, MAPAL
McDonald’s unveils price cuts: McDonald’s has recommended price cuts to it franchises in the wake of last week’s VAT cut. Paul Pomroy, McDonald’s chief executive UK and Ireland said: “We have recommended to our franchisees a price reduction on meal bundles and McDonald’s classics, like the Big Mac, Quarter Pounder with Cheese and six Chicken McNuggets. While prices may vary slightly in certain locations, the recommendation includes a 40p reduction on Extra Value Meals menu and 30p for every Happy Meal. Additionally, with breakfast now available across the UK, we have recommended a 50p reduction on breakfast meals and up to 30p off the price of single McMuffins. These new lower prices will be available from 5am Wednesday, 15 July for meals purchased through the Drive Thru or in our restaurants for takeaway or dine-in (when we reopen). In addition to the reduction on meal prices, our McCafe coffee range will also provide even greater value to customers with prices reduced to offer black and white coffee for 99p and premium coffees like our Latte and Cappuccino for £1.49. The headline-grabbing part of the Chancellor’s announcement was the ‘Eat Out to Help Out’ scheme, offering 50% off dine-in bills up to £10 on Mondays, Tuesdays and Wednesdays in August. This is a fantastic boost for the sector and an initiative we are understandably keen to participate in. However, we are not yet open for dine-in. We are working to reopen our dine-in restaurants when we are confident we can adhere to the government guidance, which enables our teams to work and customers to visit safely. Following the announcement, we have reopened four restaurants across the UK and Ireland to test dine-in and will extend this pilot further in the Republic of Ireland this week so that we can quickly test the procedures and safety measures we will introduce to enable dine-in. I have been clear throughout this crisis that we will only move forwards with the next stage of our reopening plans when we can do so safely – enabling our people to work safely and you to visit us safely. Our dine-in pilot will see us reopen with table service only, reducing capacity by as much as 70% in some restaurants to enable social distancing. You will be able to order at the kiosk, at the till or at your table using the My McDonald’s App and we will bring the food to you at your table to prevent congestion with takeaway customers and delivery couriers. Hand-sanitising stations, floor markings and Perspex screens will be in restaurants to enable you to visit safely, we will be cleaning touchpoints and seating areas more frequently and we are testing this week how to reopen the outside seating areas in our restaurants to enable more customers to dine with us. We will update on this in more detail later this week.”

PizzaExpress owner faces ‘wipe-out’: The Times has reported that the Chinese owner of PizzaExpress is likely to be ‘all but wiped out in a restructuring expected to involve a debt-for-equity swap’. The newspaper added: “Hony Capital, which acquired the restaurant chain in 2014, has looked at the possibility of injecting more equity into the business but is now thought to be resigned to ceding control to its bondholders. Although none of the parties involved would comment, there were suggestions last night that a financial restructuring, possibly including some restaurant closures, could come as early as next week. At the end of last year, hedge funds took advantage of the sharp fall in the value of PizzaExpress bonds by buying them on the cheap, prompting speculation that they might try to seize control. Part of the rationale for Hony’s purchase of PizzaExpress was to introduce the chain across China, but the strategy has not proved entirely successful. The political upheaval in Hong Kong had a significant impact on its second-half performance and it was forced to close two sites in Hong Kong and nine in mainland China. There are suggestions that as part of the talks, Hony could carve out and retain the Chinese business.”

Flow Hospitality Training owner MAPAL buys CloudReputation: MAPAL Software, the European hospitality software developer behind Edinburgh’s Flow Hospitality Training, has acquired US based software CloudReputation. The firm is backed by Providence Strategic Growth, the growth equity affiliate of Providence Equity Partners. CloudReputation, founded by Armand Ruiz, is a reputation tool for restaurants and hotels that captures data from across social media and review sites, allowing its customers to manage responses, analyse sentiment and image content with AI, machine learning tools and image recognition algorithms. The acquisition is the latest in a series of acquisitions and investments by the firm in complementary hospitality technologies, with a view of combining solutions to create a powerful, integrated back of house product suite. This recent transaction follows the acquisition of UK based Flow Hospitality Training, last December. Jorge Lurueña, founder and chief executive of MAPAL, said: “This acquisition adds another important tool to the suite of products we are able to offer our customers. Armand has developed an incredible tool that is much-needed in the market. Both businesses have been built upon the foundation that data science can provide rich insights to improve business performance. Our clients will be able to make use of the existing tool and over the next year we intend to integrate the technologies to provide an ability to cross reference schedules, sales data and customer feedback to provide a unique ability to cross reference variables for business improvement.”

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