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Morning Briefing for pub, restaurant and food wervice operators

Tue 11th Aug 2020 - Diners use eat out discount 10.5 million times in first week
Diners use eat out discount 10.5 million times in first week: Diners used the “eat out to help out” scheme more than 10.5 million times in its first week, the Treasury has said. Under the scheme, which is intended to boost the struggling hospitality sector, the government pays for 50% of a meal eaten at a cafe, restaurant or pub on a Monday, Tuesday or Wednesday. The discount, which is due to run through August, is capped at £10. Treasury estimates put the average claim at close to £5, making the cost of the policy around £50m so far. HMRC said that, as of 9 August, it had received 10,540,394 claims under the scheme. Chancellor Rishi Sunak described the figures as “amazing”, adding those using the scheme were helping support the hospitality sector. The government has set aside £500m to fund the policy. The scheme has already led to an increase in the number of people visiting High Streets across the country, according to Springboard, which measures footfall figures. It said the number of people in retail destinations after 18:00 BST last Monday, the first day of the scheme, was 19% higher than the week before. Meanwhile lunchtime visits were up 10%. However, visits to High Streets are still down significantly compared to the same time last year. The Treasury said that 83,068 restaurants had signed up to the scheme. Government figures show that 80% of hospitality firms stopped trading in April and that 1.4 million workers were furloughed – the highest proportions of any sector. “Britons are eating out to help out in big numbers,” said Sunak. “And they aren’t just getting a great deal – they’re supporting the almost two million people employed in this sector,” he said. There is no limit on how many times the discount can be used in August, or for how many people, including children.

Domino’s reports UK like-for-like sales up 4.8% in First Half: Domino’s Pizza UK has reported UK like-for-like sales up 4.8% in the 26 weeks ended 28 June and down 3.6% in Ireland against a strong comparative. The company switched off collection throughout the covid-19 lockdown period, resulting in Q2 collection orders down 87%. Q2 delivery orders increased by 22%. Underlying UK and Ireland Ebit of £49.5m was down £2.1m or 4.1%, including £6.2m of covid-19 related costs. Statutory profit, including loss from discontinued international operations, was £19m (H1 2019: £22.4m). The company said it had accelerated its evolution to a digital business, with UK online sales up 15% and app sales up 19%. UK online sales now account for 93% of delivery sales. Dominic Paul, chief executive, said: “I am pleased to report a resilient first half performance. Throughout these unprecedented times we have focused on doing the right thing for our customers, colleagues, franchisees and communities. We view it as a privilege to have been able to stay open throughout the period. 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. We have an amazing brand, an exceptional supply chain, highly experienced franchisee partners and a dynamic and responsive model. The relationship with our franchisees is challenging and this situation dates back several years. Although I expect this to take some time to resolve, our performance during the period is a great demonstration of what we can achieve when we work together. Fundamentally our interests are aligned and I am hopeful that the long-term strategic plan we are currently working on will pave the way forward for a more constructive working relationship to the benefit of all parties. The macroeconomic, consumer and competitive backdrop for the second half of the year contain considerable uncertainties. Our system demonstrated responsiveness and agility in meeting the challenges presented through the lockdown period, although that did come at some inevitable and, in certain areas considerable, incremental costs. While trading in the first few weeks of the second half has been encouraging, it is too early to conclude on how consumer behaviour will evolve. We look forward to the remainder of the financial year, and to the long-term future of the business, with confidence in the strength of the brand and our operations.” The company added: “Trading in the first few weeks of the second half has been encouraging. This trading performance has been assisted by the vast majority of our estate now having reopened for contact-free collection, the return of Premier League football, an increase in UK staycations and more recently the VAT reduction on hot food, which has enabled our franchisees to sharpen their local deals. With lockdown restrictions easing, our incremental covid-19 related costs are declining and we expect approximately £2m of such costs in the second half, all of which will be in the supply chain. This compares to £6.2m of covid-19 related costs in the first half.” 

David Forde start date as C&C Group chief executive confirmed: Further to the chief executive succession announcement of 9 July 2020, C&C Group has confirmed that David Forde will take up the role of group chief executive on 2 November 2020 and will join the board as an executive director on the same date. The company added: “Upon David joining C&C, Stewart Gilliland will revert to the role of non-executive chairman.”

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