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Morning Briefing for pub, restaurant and food wervice operators

Tue 15th Sep 2020 - Propel Tuesday News Briefing

Story of the Day:

Weekly sales down 9% on last year but food still in growth, overall sales up 10.4% on pre-Eat Out To Help Out levels: Sales last week were down 9% on last year in the first full week following the end of the Eat Out To Help Out scheme but food sales remain in growth, according to S4labour, the online labour-scheduling management system from Catton Hospitality. Sales were also up 10.4% on the last week of July, as consumers continued to eat and drink out. Despite the overall slip in like-for-likes, food sales continue to be in growth, up 4% on last year. This is in contrast to the 17.5% decline in drink sales when comparing last week with the same week in 2019. But S4labour said the figures for the week beginning 7 September appear to show a continuation in the momentum of previous weeks with sales still up by double figures from before Eat Out To Help Out started. Many operators have also decided to continue discount schemes out of their own pocket following the end of the government subsidy. Chief product officer Richard Hartley argued the figures indicated Eat Out To Help Out has successfully generated some residual effect in driving out-of-home eating habits. He said: “With the UK in recession and the withdrawal of Eat Out To Help Out, it is unsurprising to see some tailing off of sales. However, with operators standing on their own two feet, it is highly encouraging to see that food sales are still in growth.”
S4labour is a Propel BeatTheVirus campaign member 

Industry News:

Airship reminds operators of test-and-trace obligations despite impending NHS app: Dan Brookman, of CRM agency Airship, has reminded operators it is a mandatory obligation to register customers’ details when visiting their sites from Friday (18 September). Brookman said this would continue to be the case even when the NHS Test and Trace app goes live next week. He added: “Since early July, the official covid-secure guidance for restaurants and bars has been recommendatory and this has had mixed results, with UKHospitality pushing for operators to do a better job. It was, once again, a case of the government simply not going far enough in the first place, despite knowing that their guidance was likely to fail.” He added using technology already in place, such as booking systems, will help store customers’ details, as can companies such as Airship, which can install QR codes at hospitality sites that guests can use quickly and efficiently. The second version of the NHS Test and Trace app will be rolled out on Thursday, 24 September, but because it is only voluntary, Brookman said operators must continue registering people’s names, addresses and contact numbers.
Airship is a Propel BeatTheVirus campaign member
Restaurant bosses and Deliveroo call for urgent support to prevent rent payment cliff-edge: Deliveroo chief executive and founder Will Shu, alongside major UK restaurant partners including Burger King, Shake Shack, Wingstop and Itsu have written to the prime minister to warn of the severe impact the upcoming end to the moratorium on commercial evictions could have on the UK’s restaurants industry unless urgent action is taken. The signatories of the letter, including Julian Metcalfe, founder and chief executive of Itsu; and Alisdair Murdoch – UK chief executive of Burger King, said they recognise the critical role the moratorium on commercial evictions, alongside other government support measures, have played in allowing restaurants to get back on their feet and reopen, helping to protect jobs and encourage people back to the high street. However, with the moratorium due to end on 30 September, the letter warns that “failure to extend and/or modify [it] could severely hamper the restaurant sector’s recovery and lead to many permanent restaurant closures”. They have put forward four practical steps that would help prevent closures and subsequent job losses and allow those restaurants that have reopened to continue trading in a sustainable way. To restrict the ability of landlords to demand, in full, “back rent” when the moratorium ends, the government should ensure landlords can demand a maximum of 10% of any outstanding arrears in October, and high street businesses can pay back arrears over the next 12 months. And government must discourage evictions through changes to Empty Properties Relief because evictions risk long-term vacancies on high streets. It could alos extend the moratorium for businesses in city centres. And it should create a temporary moratorium covering local lock-downs. Shu said: “The restaurant sector has worked so hard to get back on its feet over recent months. This all risks being undone unless further action is taken on rents. We urge the government to consider these proposals, which will help protect the sector’s tentative recovery and ensure that our amazing restaurants can have a bright future.”

100,000 US restaurants shut permanently or long-term, ‘thousands of further closures without government support’: Almost one in six of the US’ 600,000 restaurants have closed either permanently or long-term as a result of the coronavirus pandemic, according to a survey by the National Restaurant Association. It said almost three million employees are still out of work; and the industry is on track to lose $240bn in sales by the end of the year, with thousands of further restaurant closures likely without more government support. The survey, which asked restaurant operators about the six-month impact of the pandemic on their businesses, found, overwhelmingly, most restaurants are still struggling to survive and don't expect their position to improve over the next six months. The survey also found 40% of operators think it is unlikely their restaurant will still be in business six months from now if there are no additional relief packages from the federal government. Consumer spending in restaurants remained well below normal levels in August. Overall, sales were down 34% on average. A total of 60% of operators said their restaurant's total operational costs (as a percent of sales) are higher than they were prior to the covid-19 outbreak. On average, restaurant operators said their current staffing levels are only 71% of what they would typically be in the absence of covid-19. “For an industry built on service and hospitality, the past six months have challenged the core understanding of our business," said Tom Bené, president and chief executive of the National Restaurant Association. “Our survival for this comes down to the creativity and entrepreneurship of owners, operators, and employees. Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.”

Welsh business group claims ‘rule of six’ will hit hospitality financially: The Welsh Independent Restaurant Collective (WIRC), a 300-strong group of independent hospitality outlets, has said the rule of six is likely to hit businesses financially and wants “clear messaging” from the Welsh government. Natalie Isaac, from Bar44, which has four outlets across south Wales, said: “It’s difficult to imagine the new restrictions won’t result in further financial impact on many Welsh hospitality businesses. We’ll be urging Welsh government to look at ways of supporting and giving confidence to the independent hospitality sector where many thousands of jobs have already been lost and many more remain in jeopardy.” Fellow WIRC member Kasim Ali, of Waterloo Tea, which operates six sites across Wales, added: “We’ll be working hard to ensure we get clear messaging from Welsh government both in terms of the detail of the rules and guidance but also in how these changes are communicated to the public. We want this to be a partnership between us and our customers. To make that happen and ensure there is a mutual understanding of what is allowed and what is not needs a very clear and continuing communications strategy from our government. We would urge this engagement with the public to come quickly, clearly and concisely to take the pressure away from our teams, who are on the front line of communicating restrictions to their guests.”  
PCA revises MRO chapters in compliance handbook: The pubs code adjudicator has published a revised version of its Regulatory Compliance Handbook. Affected chapters are one concerning Market Rent Only (MRO) and how a pub-owning business (POB) must provide tied tenants with full information on how its MRO proposal is compliant with rules; and the first three chapters dealing with POBs’ communications with tenants, business development managers and MRO to tenants. All these have revisions within a single document. PCA Fiona Dickie said: “I know that for tenants to satisfy themselves that they are no worse off under their tied agreement than they would be if they were free of tie, they must freely be able to exercise their right to a compliant MRO option. The law gives the POB the sole power to propose MRO terms, so holding them to account for how they do that is important. Tied tenants know the MRO experience has been far from perfect. Too many MRO requests end up in arbitration, even though there are now fewer new disputes and they are not taking as long as they did. Ministers have heard the MRO concerns of stakeholders, including the PCA, in responses to the statutory review. In the meantime, I’m keeping a close eye on how the handbook and other innovations, like the initial stay in arbitration proceedings, are influencing POB behaviour so I can consider whether and how to exercise additional regulatory powers to further reduce disputes and improve the MRO experience for tied pub tenants.” The updated guidelines also relate to how the PCA expects POBs to act, including making MRO negotiations clear to tied tenants including after arbitration, ensuring the MRO tenancy must be of a reasonable length and that POBs complete a compliance checklist and declaration to record its decisions when preparing an MRO offer.
Job of the day: COREcruitment is looking to speak to candidates for a head of sales position based in London. This is an opportunity to become involved in a small but growing bar and leisure group currently operating eight venues. The company is an on-trend concept that is popular throughout London. The head of sales will ideally have extensive experience in new business development and expanding existing businesses into new markets as well as developing the corporate events business. The head of sales will be tasked with achieving targets for revenue, profitability and sales growth as well as daily/weekly financial reporting and management of the booking system. The ideal individual will have a great understanding of the sector and be very comfortable in both a reactive and proactive sales environment. The positions will pay a basic of up to £65,000 with an overall earning of £80,000. Anyone interested can email
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Adventure Bar Group launches ‘Show Must Go On’ immersive experiences: London bar operator Adventure Bar Group is launching a series of West End, theatre-themed, immersive evenings in its The Lost Alhambra cocktail bar in Leicester Square. The Show Must Go On experiences will feature West End stars and take place every Thursday, Friday and Saturday starting on 8 October, beginning with Chicago: The Musical, starring Laura Tyrer as Velma (Chicago, 9 to 5), Hayley Flaherty as Roxie (Matilda, Rocky Horror) and Oliver Tompsett as Billy Flynn (& Juliet, Kinky Boots). Later weekends in the run will include songs and stars from Hairspray; Mamma Mia; Priscilla, Queen of the Desert; and The Rocky Horror Picture Show with a Halloween Villains’ Night special, offering performances over the last weekend in October. For every ticket sold, £1.50 will go to the Acting For Others group of charities that help theatre workers with financial and emotional support throughout the pandemic. In addition to three hours of performance, the evening will include a two-course meal with vegan options, bubbles and cocktails, all in a safe environment, putting the social into social distancing. Tyrer who starred as Velma Kelly in Chicago: The Musical said: “Like most people in our wonderful industry, I’ve been desperate to get back on a stage and entertain. Hopefully, theatres can reopen sometime soon but, in the meantime, this initiative is the next best thing. It’s a blessing and a necessity in equal measure for us all.”
Greene King tests virtual delivery brand Proper Pub Classics Co: Brewer and retailer Greene King is trialling a new virtual delivery brand called Proper Pub Classics Co, Propel has learned. Currently available through select pubs under its Local Pubs division and with Just Eat, the virtual brand’s menu features pub classic such as fish and chips (£6.99), and steak & ale pie (£7.79), plus a small selection of burgers, a chicken wings sharing dish, sides and kids’ meals. A Greene King spokesman told Propel: “During lock-down, we saw an increase in people using takeaway and delivery, and we’re adapting to that new marketplace. We’re looking at how we can offer proper pub food for people who may not live close to their local pub. This test involves a reasonably small number of our Local pubs as we look to serve classic pub meals for people looking for this type of cuisine through Just Eat.” Last month, Greene King said it had introduced food and drink takeaway across its food-led managed pub estate, which made it the UK’s largest pub takeaway business. The move followed regional trials of takeaway and delivery from select Greene King pubs since June and means customers at the majority of the company’s 1,700 managed pubs will have the option of enjoying pub food and drink at home. In addition, about 400 of the pubs are providing home delivery services via Deliveroo or Just Eat.
OHH Pub Company trials 30% food discount but sees better like-for-like performance at sites not offering deal: West Country-based The OHH Pub Company, led by Mark Warburton, is trialling a 30% discount on food but is seeing better like-for-like sales at its outlets not offering the discount. Warburton told Propel the business purposely selected one site on the Bristol side of the estate: The Rising Sun, Backwell, and another on the Bath side: The Old House At Home, Burton, for the offer. Meanwhile, its other two sites – The Northey Arms, Box; and The Bear & Swan, Chew Magna – have a set menu offer in place. Warburton said like-for-like sales across the group are up 4.4% since the start of September – but at the sites not offering the discount they have risen 8.1%. “All sites had a facelift during lock-down so they are on a level playing field. It’s really interesting reviewing the figures since the end of Eat Out To Help Out,” he said. “It’s encouraging to see sales are not being directly driven by discounts and the Ebitda for those sites is looking positive as the margins are holding up nicely.” Warbuton added: “Eat Out To Help Out was a fantastic lifeline for the hospitality sector, but it could not have continued forever. Quite frankly, this type of deal would be commercial suicide for us as a relatively small family business. It is important we wean the general public away from chasing the discounts and I admire the attitude of those such as Hawksmoor that are of the opinion that if we work hard at what we are do, why should people pay such discounted prices for the privilege? This all boils down to ‘value’. It is the food, drink, service, atmosphere and a safe environment that will see those prosper the most through these hard times. We are not perfect, we make mistakes, but with my wonderful teams with me, those are the key points we will be working hard at during these coming months.”
BrewDog Equity For Punks Tomorrow initiative raises £1m in four days: Scottish brewer and retailer BrewDog has raised £1m in four days for its “final” crowdfunding programme – Equity For Punks Tomorrow. The scheme has a target of £7.5m – with a stretch goal of £50m – and is 14% of the way there with 140 days remaining. The prospectus states every penny raised will be committed to sustainability projects including direct wind power, carbon dioxide recovery, electric vehicle fleets and converting waste into energy. It also revealed how covid-19 had taken its toll against budget predictions and created an overall net loss of £8,151,071 in H1. The latest round of Equity for Punks will result in the issuing of 298,210 B shares. Shares will cost £25.15 each and be issued in blocks of two, with the minimum investment of two shares for £50.30. Any funds raised above its initial target will support a wider set of projects from a £10m investment into solar panels at its breweries across the globe; a £12.5m brewery to be built in France, the brewer’s biggest export market in order to reduce its carbon footprint when selling beer in the region; to a brewery in Asia to more efficiently service growth markets in China, Japan and India by reducing the environmental impact. BrewDog co-founder James Watt said: “In 2009, we launched Equity for Punks, and pioneered a new kind of business model. Equity for Punks Tomorrow is the next evolution of this, uniting investors across the globe to make a change today to ensure we have a planet to brew beer on tomorrow. We believe in action not promises, change is not happening fast enough, it’s time to set a new standard for sustainability, and invest in a future we’re proud of.” BrewDog also agreed a deal with Bruton Capital within the past week to open ten bars in Germany.
Phillips swaps Busaba Eathai for Marugame Udon: Steve Phillips, formerly operations director at Busaba, has joined udon noodles and tempura restaurant chain Marugame Udon as its head of operations, as the brand gears up to launch in the UK next year. Phillips, formerly of Gourmet Burger Kitchen (GBK) and The Restaurant Group (TRG), joined Busaba as its new operations director, in February 2018, after three years with the Eren Ali-backed Levi Roots Caribbean Smokehouse concept. Previous to that, he spent four years at GBK and eight at TRG. Capdesia Group, the backer of Wasabi, and Toridoll Holdings Corporation, the backer of Shoryu Ramen and Wok to Walk, announced earlier this summer that they had formed a new joint venture to launch Marugame Udon in London early next year. Marugame Udon currently has more than 800 restaurants in Japan and a further 250 across Asia, the US and Russia. The London site will be the first in Europe. Marugame Udon (Europe) will become the master franchisee for the region and the new London restaurant, for which a location is soon to be confirmed. The new joint venture said this debut site will be followed by an “ambitious roll-out plan”, involving a combination of both owned and franchise operations in the UK and Europe, working in partnership with local multi-unit/brand operators. The new company will be led by Keith Bird, the founder of Natural Kitchen, former chief operating officer of GBK, and one of Capdesia’s operating partners.
Arepita Sliders to open from founders of Sugoi JPN: Japanese and Latin American fusion concept Sugoi JPN is to launch its new concept Arepita Sliders on Thursday (17 September) in Tooting Broadway, south London. The site will offer arepa – pan-fried corn buns that originated in the area of South America that is now Venezuela and Columbia – for takeaway and delivery. The menu works by offering arepa and separate fillings, including pulled beef, black bean, pico de gallo (tomatoes, coriander, red onion and lemon juice) and reina pepiada (a combination of chicken, avocado, red onion, mayo and coriander), which customers can “FIY – fill it yourself”. Arepita Sliders also claimed its arepa help meet the needs vegans and gluten-free customers and help tackle food waste by being fine for consumption the following day by toasting the arepa and chilling the contents ready for reheating. The brand aims to launch 20 sites across London to make a target of 50 for the group overall.
D&D London to open delayed Bristol restaurant next month, to be called Klosterhaus: Restaurant operator D&D London is to open its delayed debut site in Bristol, next month. The 13,000 square foot restaurant and events venue within the Quakers Friars building at Hammerson’s flagship destination, Cabot Circus, will launch on Friday, 2 October, and be called Klosterhaus. The restaurant, bar and outdoor terraces will be open all day and will serve classic food, paying homage to the dining scene of grand Mittel-European cafes. Customers will experience a restaurant spread over two floors connected by a central staircase and an island bar that will be the centrepiece of the ground floor. The menu, developed by executive head chef Bjoern Wassmuth – from D&D London’s German Gymnasium – and head chef Rhys Grayson will be broad-ranging featuring some Mittel-European classics and German favourites inspired by Wassmuth’s German heritage. Dishes will include German chicken and veal schnitzels as well as sharing dishes such as the slow-roasted Creedy Carver free-range duck, potato dumpling and braised red cabbage. There will also be a curated wine list featuring European wine from both familiar and lesser-known producers as well as cocktails and a varied selection of German and local premium craft beer from Bristol Beer Factory. Des Gunewardena, chairman and chief executive of D&D London, said: “Quaker Friars is an absolute gem of a building and I hope Klosterhaus will bring it to life. Bristol has a very exciting foodie scene and I hope we can contribute to and become part of it.” This will be D&D’s second venture with Hammerson, following the openings of Issho and East 59th at Victoria Gate, Leeds in 2017. Iain Mitchell, UK commercial director at Hammerson, said: “D&D continues to innovate in the restaurant scene and we are thrilled to have secured its first venture in the south west, which we know will be a huge draw for consumers and brands alike.”
Papa John’s announces biggest franchise deal in North America for 20 years: Papa John’s International has announced a deal to open 49 stores in Philadelphia – the largest traditional store development in 20 years. HB Restaurant Group, which owns 43 restaurants in the mid-Atlantic area, and has been a Papa John’s franchisee since April 2019, will unveil the stores in Philadelphia and southern New Jersey between 2021 and 2028. Papa John’s chief development officer Amanda Clark said: “Papa John’s has long offered franchise investors one of the fastest paybacks in our industry. Recent record sales have driven further gains in store profitability. Combined with our resilient e-commerce and delivery model, a transforming brand and significant whitespace, Papa John’s today offers franchise investors a truly compelling opportunity. We’re excited to grow our partnership with HB Restaurant Group, already an important member of the Papa John’s family, as we accelerate our development activities at this unique moment for the brand.” HB Restaurant Group president Stuart Hunt added: “We joined the Papa John’s system a year ago after seeing a tremendous opportunity to invest in and grow with a great brand. We are very excited to extend our growth strategy by developing new stores in a great market like Philadelphia and southern New Jersey. Papa John’s is built on supporting our neighbours where we are located, and we embrace these values. We look forward to becoming an integral part of our communities as we grow.”
North London-based takeaway Chilli Tuk Tuk doubles up with King’s Cross delivery kitchen: North London-based takeaway Chilli Tuk Tuk has doubled up, by opening a dark kitchen in King’s Cross. Founders Deepak and Amisha Lall have added to their Finchley outlet with the delivery site in Brewery Road. The delivery menu features four chicken curries, three lamb dishes and a range of vegetarian and vegan options. The duo launched the concept after travelling across India in 2014, meeting with top chefs to devise their menu. Chilli Tuk Tuk was named best takeaway in central London by the British Takeaway Awards last year.
Jason Atherton’s Michelin-starred City Social reopens: Michelin-starred chef Jason Atherton City Social has reopened for lunch, dinner and drinks with a new menu. Based in the City of London on the 24th floor of Tower 42, between Liverpool Street and Bank, the contemporary British menu has been curated by Atherton and new head chef Dan Birk. Guests can expect starters such as roasted Orkney scallops, pearl barley, caramelised cauliflower; and Dingley dell pork terrine, boudin noir, apple, celeriac. Mains include Aynhoe estate venison, cep, turnips, juniper, watercress; and Isla of Gigha Halibut, white beans, preserved lemon, razor clam velouté. While the grill menu will continue to feature premium steak options. The bar has an extensive spirits and cocktail menu, with highlights including the Freaking Grape – Belvedere vodka, V Gallery grape vodka, Ratafia cherry liqueur, Edinburgh mandarin and orange blossom liqueur, egg white and citrus. General manager Tim Smith said: “Jason and the team are thrilled to be reopening the restaurant with more office workers returning every day. City Social is at the heart of this dynamic community and we want to welcome everyone back with the warmest of welcomes. We are proud to be the capital’s only sky-high Michelin experience and we are determined to continue raising the bar on extraordinary service and cuisine during these unprecedented times.”
Carver to launch The Cheese Barge at permanent central London canal mooring: Mathew Carver, founder of Pick & Cheese and The Cheese Bar, will launch his new restaurant – The Cheese Barge – in November. The Cheese Barge is a double-decker vessel permanently moored on the Grand Union Canal at Paddington Central. It was scheduled to open in spring but has spent the past six months self-isolating in Somerset. Carver said: “It feels great to finally launch The Cheese Barge. It was heart-breaking to down tools and not open our doors earlier this year. However, our excitement for this project has never waned, and myself and the team couldn’t be more excited to share this incredible vessel with everyone. British cheese on a boat, what’s not to love?” The vessel’s design takes cues from the Electa bookstore in Venice – itself inspired by ship design – with a copper “veil” acting as an awning for the 40-cover lower-deck dining room. Head chef Reagan Ellenbroek and executive chef Ross Keeling have created menu that uses small cheese producers. Dishes include Windrush Goats’ Curd with lamb scrumpets and pickled walnuts; Cropwell Bishop Stilton “Devils on Horseback” – medjool dates stuffed with Stilton and wrapped in bacon; and Maida Vale, a washed rind cheese from Village Maid, served on treacle soda bread with smoked mackerel and green sauce.
Plant-based London restaurant The Brook hits £350,000 fund-raising target to expand ‘build a box’ subscription service: Plant-based, London restaurant The Brook has hit its £350,000 fund-raising target as it looks to expand its “build a box” subscription service. The company, founded and led by Thea Brook, is running the convertible share equity campaign on crowdfunding platform Seedrs, where it is offering a 25% discount on the equity valuation. The Brook operates a restaurant in Mare Street, Hackney, and also offers a meal delivery service. The company is raising the funds to invest in its e-commerce operation. So far 219 investors have pledged £350,900 with 12 days of the campaign remaining. The pitch states: “Our e-commerce platform enables customers to build their own box of eight plant-based dishes and have it delivered regularly, straight to their doorstep. This is a recurring subscription that customers can cancel at any time, with free UK delivery, which costs £45. That is equivalent to £5.63 per meal. The Brook’s meals are also available to purchase from a number of retail outlets – both independent and major. We soon expect to boost our retail offering with our cold-pressed juice and lentil-based cooking sauces. And on the foodservice front, we are still in discussions with a well-known UK pub chain, with more than 900 locations, about adding our plant-based meals to its menu, designed to cater to the demand it’s seen from diners across the country.”

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