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Morning Briefing for pub, restaurant and food wervice operators

Mon 21st Sep 2020 - Propel Monday News Briefing

Story of the Day:

Borg-Neal says Hancock’s ‘lies’ blaming hospitality for coronavirus cases spike need scrutinising by parliament, 10pm curfew immediately impacts sector trading: Oakman Inns chairman Peter Borg-Neal has challenged health secretary Matt Hancock to prove the spike in England’s case increase emanates from pubs and restaurants. On Friday’s (18 September) BBC Radio 4 Today programme, Hancock said: “We know the vast majority of transmissions happen in social settings whether that's in hospitality or in people's own homes. The good news is the proportion of cases being passed on in workplaces is relatively low.” However, Borg-Neal pointed out figures show cases across pubs and restaurants are consistently low and last week there were fewer than 35 cases reported across the sector, despite record visits during the Eat Out To Help Out scheme. Given the “clear evidence” Hancock has, either deliberately or accidentally, misled the nation, Borg-Neal believes the situation needs to come under full parliamentary scrutiny. Borg-Neal said: “The reality is contrary to advice being issued by the scientists and the government, incidents in food, pub and restaurant settings are very low and not the primary cause of increased infection. Pubs and restaurants opened 11 weeks ago and there was no spike in cases – indeed they continued to decline. What has happened in recent weeks is a return to work and a return to school. It is vital parliament is allowed to scrutinise the inaccuracies and kneejerk generalisations based on little more than ill-founded preconceptions that have led to growing unemployment and a collapsing economy.” Data produced for UKHospitality by CGA showed of those hospitality premises open, like-for-like sales in the first week in September had reached 83% of the previous year for all premises (73% for pubs) but fell back to 69% last week with the “rule of six” announcement. In London, trade is still 20% to 30% of last year and a third of premises remain closed. New restrictions, including a 10pm curfew on pubs and restaurants, were imposed in the north east on Friday and sector bosses said the impact was immediate. Martin Wolstencroft, chief executive of Leeds-based Arc Inspirations, said trade at its Newcastle site was down 50% while Rob Pitcher, chief executive of Revolution Bars Group, said its Durham and Newcastle outlets were down 50.7% and 52.4% on the same day the previous week. Pitcher said: “The 10pm curfew is a killer. No one was out on the streets last night. It’s likely lots of socialising is taking in houses so infections will continue to rise and therefore no relaxation of the measures for hospitality will be possible – as per Manchester, which is now seven weeks in.”

Industry News:

Sponsored message – post-covid-19 dining solutions from Crown Pavilions: It’s no secret hospitality businesses are struggling to configure their dining spaces to keep diners safe while also ensuring they have a viable business – we’ve developed an approach to help our hospitality customers not just survive, but also thrive in the new normal. We’ve been working with pubs, restaurants and hotels up and down the country to transform under-utilised outdoor space into, superb, four-season dining pavilions, offering guests complete protection from the elements and clear separation from other diners. Our four-season dining pavilions offer guests a unique dining experience and can be heated to extend the outdoor dining season well beyond the summer months. Crown Pavilions chief executive Luke Dejahang said: “Our hospitality clients talk about the wow factor our dining pavilions provide. Ultimately, we’re creating a point of differentiation in a competitive market during a particularly challenging time. The proof is in the pudding: we’ve just installed our 14th pavilion for a regional pub chain and we understand it is booked solid almost every day.” The key features and benefits include 360-degree, marine grade canvas blinds and optional heating; hard wearing, marine grade, acrylic fabrics; ten-year structural guarantee; and fast, efficient, installation. To find out more visit us online and download our hospitality trade brochure here. If you have information you would like to feature in a sponsored message, email
Charlie McVeigh urges everyone to write to their MP ‘to save hospitality and protect our democracy’ ahead of coronavirus emergency powers vote: Draft House founder Charlie McVeigh has urged everyone to write to their MP “to save hospitality and protect our democracy” ahead of a vote next week on the renewal of emergency powers to enforce lock-down measures without reference to parliament under the Coronavirus Act 2020. He said: “This is a pivotal moment in the evolution of the covid crisis. It must be right parliament has the opportunity to debate each new restriction to ensure the evidence is properly weighed when the possibility of further damage to our economy, physical and mental health and the prospects for young people remains so real. I therefore urge you to write to your MP asking that he or she support the amendment to be tabled by Sir Graham Brady MP to ensure parliament is able to debate future restriction of our daily lives and hard-won democratic rights.”

Welsh hospitality businesses call for emergency support in government letter: The Welsh Independent Restaurant Collective (WIRC) which represents more than 300 businesses, has sent an urgent letter to the Welsh government setting out the increasingly fragile financial position of the sector. The letter said unless changes are made to the rules on eating out and extra funds are found to help the industry meet rent and other costs, thousands more jobs will go, and businesses will disappear. In a survey carried out after changes to the covid-19 rules in Wales, results showed 50% of businesses have already shed jobs, and losses to date across Wales could be as high as 12,000 posts. The survey also showed a further 8,500 jobs are anticipated to be lost before Christmas, and 36% of business feel their chance of still trading at Easter 2021 are 50/50 at best. The WIRC is now asking Welsh government to reconsider its version of the “rule of six”, to allow a changeable combination of two households. The WIRC argued this would have a much less severe impact on the sector, and also allow individuals to enjoy more varied and rewarding social interaction. The letter noted most hospitality venues are operating in accordance with all rules and guidance, “providing one of the safest environments in which to meet others”. It also asks for urgent consideration of financial assistance “to bridge the chasm caused by the steep decline in turnover”, arguing failure to do so will mean many businesses will go under. The WIRC said this would also have a consequent effect on suppliers.

CGA – food and drink sales fall back but early week trading trend continues: Food and drink sales fell back last week following the end of the Eat Out To Help Out scheme and fresh concerns about rising covid-19 infections, according to the latest research by CGA. But there are signs consumers’ appetite for eating and drinking out earlier in the week has continued into the aftermath of the promotion. CGA’s Volume Pool of 7,000 managed outlets showed food sales on Monday, 7 September were down by 63% on the previous Monday—the last day of Eat Out To Help Out. But with some operators continuing to fund early-week discounts, sales were nevertheless up by 27% on the equivalent day in 2019. The Tuesday and Wednesday (8 and 9 September) also saw year-on-year increases of 18% and 16%. The latest edition of CGA’s Drinks Recovery Tracker meanwhile showed the value of drinks sales in the seven days to Saturday (12 September) was 22% lower than in the same week in 2019. It is a widening of the year-on-year deficit from a 10% drop over the previous week. Echoing the trend in food, consumers appear to be drinking out earlier in the week. Sales on Monday, 7 September were up by 1% year-on-year, and only 5% and 8% down on Tuesday and Wednesday (8 and 9 September). As in previous weeks, year-on-year trading was weaker later in the week. Food sales were down by between 16% and 24% on Thursday, Friday and Saturday (10 to 12 September), and drinks sales were down by between 25% and 35%. The Drinks Recovery Tracker also showed pubs (down 18%) outperformed restaurants (down 34%) on drinks sales across the week—continuing a trend that has been evident since hospitality reopened in early July. Category wise, soft drinks (down 16%) fared better than beer, cider and wine (all down between 20% and 22%). Meanwhile, the Office for National Statistics said 30% of British adults had been out to eat or drink between 9 and 13 September, down from 38% two weeks earlier, when the Eat Out To Help Out programme was still running. It was the first fall in numbers since the end of July.

Online booking site TheFork launches in UK with 50% off at 100 restaurants offer: Online restaurant booking website TheFork, which was previously Bookatable, has launched in the UK and is offering 50% off at 100 venues every day for two months. TheFork’s Back To The Restaurant event is offering the deal every day of the week until Tuesday, 17 November. Back To The Restaurant is aiming to encourage people to return to the sector. TheFork managing director Patrick Hooykaas said: “We are so excited to be launching TheFork here in the UK, celebrating with the Back To The Restaurant event. We felt what better way to kick things off than with 50% off the bill at more than 100 UK restaurants, allowing customers to enjoy cuisines and dishes they may otherwise have enjoyed abroad this summer. We know it is an incredibly challenging time for the hospitality industry and that having empty tables is the costliest element for any restaurant. We’re hoping, through our festival, we’ll see more customers venturing out to support their locals while enjoying great food for incredible prices.” Bookatable was acquired by TripAdvisor from Michelin in December 2019. 
Job of the day: COREcruitment is looking for a head of operations for a national casual dining business. With 20 restaurants spread nationally, this position, paying between £80,000 and £100,000, will require an ability to drive. The business is seeking a solid operator who excels in growth and brand excellence. They will be primarily responsible for the day-to-day operations of the business, reporting to the managing director. The company is trading well and has plans for growth, with new sites in the pipeline. The business specialises in high volume and is aimed at families. The position is about exceeding expectations and increasing sales. The business is looking for experience with this role – someone who really understands restaurants from a 360-degree perspective and wants to be part of a successful growing group. Anyone interested can email with their CV.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Soho Coffee Co to make rail station debut with new TRG partnership: Artisan food-led coffee company Soho Coffee Co is to make its entry into the rail market, in Liverpool Street station, through a new partnership with The Restaurant Group (TRG). The franchise partnership features a new format exclusively developed by Soho Coffee Co for TRG, designed for rail travellers to “offer quick, fresh, handmade food across all day-parts”. A strong hot food range is at the core of the offer, building upon the customised hot food range already available across Soho Coffee Co’s high street stores. TRG Concessions said the new unit, originally due to open as the UK went into lock-down, represented its “strong ongoing commitment” to its partnership with Network Rail and provided “a specially developed experience that will exceed guest expectations in a travel environment”. Soho Coffee Co managing director Penny Manuel said: “We are thrilled to be at the start of a new partnership with TRG and opening our first rail Soho. Despite all the challenges 2020 has presented the hospitality industry, we are pleased to be looking ahead, tackling new market places and retail opportunities. We have a highly energetic, opinionated and committed team who are rightly proud of the brand they have created. Constantly innovating and driving forward, their goal is to make Soho a way of life for as many people as possible through offering carefully crafted and original food and drink, delivered with shiny service.” TRG managing director Jonathan Knight added: “Disruption to business in 2020 has been extreme so it is great to be back to something more normal, launching a new partnership to serve passengers using a major London rail station. We’re excited to see what the Soho Coffee and TRG Concessions collaboration creates in the future.”

Thai Leisure Group’s CVA approved: Thai Leisure Group, operator of Thaikhun and Chaophraya, has had its proposed company voluntary arrangement (CVA) approved by creditors. The company had been working with RSM on the proposal, which it is thought involves closing its Thaikhun Street Bar in Liverpool ONE and agreeing new rental levels on the majority of its 18 sites. Managing director Ian Leigh said: “It’s not over yet but we have made it through some of the most challenging of times with the assistance of the UK government’s furlough scheme, VAT reduction scheme and Eat Out To Help Out promotion. And now we are incredibly relieved to have just had our CVA approved. I would like to thank the landlords across our 18 sites and our bank Santander for their ongoing support. I would like to thank our numerous suppliers for standing by us. I would like to thank our many thousands of customers for their continued loyalty to us. And, by no means least, I would like to thank my incredible, dedicated and hardworking colleagues, without whom being here today simply would not be possible. Together we can now move forward to better times.” Last October, Thai Leisure Group had a CVA approved that introduced a temporary reduction in rents across a number of the group’s then 22 sites for the duration of the CVA; and the opportunity for the company to exit sites that were unsustainable at the contracted rent levels. The company had continued to trade within the CVA until the forced closure of the restaurants in March. Although the business took further cost cutting measures, it suffered considerably in terms of cash flow and should it have been required to pay all its arrears and fully oblige all future rent agreements, then its position would “rapidly have become unsustainable”. Management therefore concluded another CVA was required in order to ensure the future viability of the company. The latest proposed CVA would again alter the commercial terms between the company and its landlords and creditors. Propel understands these include the majority of the company’s ongoing estate moving to monthly rent payments, and in places to turnover-based payment levels. 

Grind founder – ‘big questions marks’ over when we’ll open another high street site, online sales on track to equal high street revenue next year: David Abrahamovitch, founder of coffee and cocktail brand Grind, has told Propel there are “big question marks” whether the business will open another high street site again. The company has gradually been reopening its estate since restrictions were lifted, with six of its ten-strong estate now operational, albeit with limited menus, and, in some cases, opening hours. Abrahamovitch said its landlords had been “mostly brilliant” and the company has been able to negotiate a mix of rent-free and turnover-based agreements on a temporary basis. But he added, given the state of the high street in general – which he pointed out had been seeing a downturn for years with many casual dining company voluntary arrangements “way before lock-down began” – and the current success of its online business, it may have opened its last bricks-and-mortar site for a while. “We have spent ten years securing prime properties in areas by train stations and office blocks, and locations that we thought were bullet-proof now feel like, in the short term, they are in the worst place imaginable,” Abrahamovitch said. “Liverpool Street was our highest revenue site and is now at a fraction of what it was before lock-down. When we open a site, we typically spend at least £1m and it’s very hard to justify that in the current climate. Will we open more locations? I hope so, but a lot of it is going to come down to how things like business rates and rents pan out – I’ve said for years five-yearly upward-only rents are nonsense. There are big question marks over when or if it will make sense to invest in the high street again – structural changes are needed.” Abrahamovitch said he was pleased with the performance of the sites that have reopened, with weekend brunch sales “flying”. But he added, in general, during his walk around parts of London, weekday trade looked to be again “a shadow of its former self” following the end of the Eat Out To Help Out scheme. “The queues out of the doors have disappeared,” he added. “One of the reasons we didn’t take part in the scheme is we didn’t want to bring people back off furlough and then see all that trade evaporate. We need to get people behaving like normal – and giving them a discount offer during part of the week like that is not normal.” Abrahamovitch also questioned the government’s policy over lock-down, particularly for younger people, when the median age of those dying from coronavirus was 79. He added: “It’s just been used as a blunt instrument – it’s not much of a strategy.” But he believes people will eventually return to their normal habits. He said: “I don’t believe people want to be at home on Zoom all the time – I find it quite bleak. As a society, we have been urbanising for more than 200 years – and I don’t think that will change. You can’t have those same social interactions online that you have in person. In two years’ time, we’ll be back to 90% to where we were before lock-down.” Despite the challenges on the high street, the company’s online business is thriving and has seen sales, which grew at a rate of 30 times in just a month during lock-down, continue to accelerate. The “Grind at home” business was launched about 18 months ago and Abrahamovitch said it had gone from being a negligible revenue stream to “significant”. He added: “It’s been phenomenal. We had been planning to expand the online business but coronavirus has seen us execute a five-year plan in five months. We’re now on track so that, by this time next year, the revenue split between online and high street will be pretty much 50:50. Our partnership with Soho House has really helped – having our products in its rooms means we’ve been able to get the brand in front of a much wider and global audience.” With regards to the launch of the coffee subscription service by Pret A Manger, he added: “It’s not helpful, but we sell more alcohol than coffee and we’re in a different part of the market. However, it’s probably the last thing a lot of smaller independent coffee operators needed.”

Pret boss – ‘pandemic has given me the licence to rip up the rulebook and take some risks’: Pret A Manger chief executive Pano Christou has said the coronavirus pandemic has given him the licence to “rip up the rule book” and “take some risks” as he bids to turn around its fortunes. The company’s mantra, according to Christou, had been to follow the skyscrapers and “now we need to follow the people”. That has begun with its new coffee subscription scheme. By 3pm on the opening day, Pret had seen 16,500 people join the initiative that offers unlimited hot drinks for £20 a month – “way in excess” of the 2,000 to 3,000 it expected. Christou told The Guardian: “We need to move fast and we need to evolve and we need to innovate. And I think we need to take some risks. If we sit and wait for things to change, that is a bigger risk than going out there and being bold.” More branches in suburban areas are on the cards. Christou also said branches in more residential areas of London are also doing relatively well – sales are running at 70% and improving. Christou, who took over as chief executive in September last year, having previously run its UK business, said: “I always knew it would be quite challenging to drive change through a business, but [covid] has really given me the licence to rip up the rulebook.” The first rule he’s ripped up is Pret should not deal with third-party delivery companies and has seen tenfold growth since before covid. Christou said: “As it currently stands, it’s about 5% to 6% of total sales. Beforehand, it was more like 0.2%, maybe 0.4%.” Christou pointed out 80% of home deliveries take place in the evening and is developing a dinner menu in response. The company tried a similar thing five years ago – in branch – but Christou said this time around it would be an online proposition. The company has also put its headquarters in London’s Victoria up for sale having moved there in 2017. The building is now home to 210 staff, down from 320 after the company made almost 2,900 of its 8,800 employees redundant last month.

Di Maggio’s Group co-owner – ‘we’re having to think of innovative ways to market restaurants for festive season’: Tony Conetta, co-owner of Scottish restaurant operator Di Maggio’s Group, has said the business is having to think of “innovative ways” to market its restaurants this festive season. Conetta said December traditionally accounts for about 20% of annual revenue generated by the family-owned firm, which has 18 restaurants in Glasgow, Edinburgh and Aberdeen trading under the Di Maggio’s, Café Andaluz, Amarone, Barolo, Anchor Line, Atlantic and Cadiz brands, along with five food court outlets in Scotland, Belfast and Manchester. With the new “rule of six” coming in at a time when bookings would normally start pouring in for office Christmas parties, Conetta said the restrictions on gatherings has already led to some cancellations this month. To buffer the impact of what will be a vastly different festive trading period, Di Maggio’s Group is looking at alternatives such as offering restaurant hampers and dine-at-home options. For those employers that normally contribute towards the cost of a Christmas office party, Conetta said corporate gifting of an equivalent amount to each employee would allow them to enjoy a meal out in a smaller group. It is also in the process of “winterifying” outdoor areas to maximise space amid social distancing. All bar one of the group’s restaurants – Di Maggio’s Theatreland Glasgow – are currently trading at about 70% of pre-covid capacity. Conetta told The Herald: “We are still here punching, fighting. We are optimistic for the future. We know it is going to be a difficult six months, but we are of the strong belief that things will return to normal.”
Fuller’s to open White Horse pub to commemorate famous Wembley football final: London-based pub and operator Fuller’s will open The White Horse in homage to the 1923 FA Cup final in Wembley. Wembley Park Estate near the iconic football venue is currently being developed and the new-build pub is set to open on Friday, 2 October. The White Horse derives its name from the first FA Cup Final match to be played in the stadium. The higher-than-anticipated turnout to the game meant crowds surged onto the pitch. Mounted policemen, including one on a light-coloured horse, which became the defining image of the day, had to be brought in to clear the crowds and allow the final to take place. The pub will be set across two levels, has plenty of outdoor space and will create 50 new jobs. The White Horse general manager Sinead Murphy said: “Wembley Park is becoming a landmark destination for culture and community, so it was only natural for us to reflect that with the opening of this new pub that celebrates Wembley’s legendary past. We are excited to be open at Wembley Park for the much-anticipated UEFA Euro 2021 next summer. We intend to be the go-to venue for people to eat, drink and revel in the atmosphere.” Wembley Park’s day-to-night experiences also include a number of restaurants and bars, including Boxpark Wembley. 
Boparan to bring back three more Carluccio’s sites: Boparan Restaurant Group will continue the gradual reopening of its Carluccio’s estate with another trio of sites. The company, which paid £3.2m to acquire 30 Carluccio’s sites and buy the rights to the brand in May, will reopen its outlets at Manchester Piccadilly, Derby and the Bentalls Centre in Kingston on Monday, 28 September. The move will take the brand’s total number of reopened sites to 24.

The Vurger Co launches meal kits for customers to cook at home: Vegan fast food concept The Vurger Co has launched “at home” DIY New York Melt burger kits and a new crispy “chicken” burger. The New York Melt DIY kit is designed so customers can construct a meal at home. The kit includes Beyond Meat burger patties, cheese, lettuce, sliced gherkins, tomatoes and jar of house-made burger sauce, with two portions of skin-on fries to be cooked at home. It comes in compostable packaging and a reusable freezer bag, and is available nationwide. It costs £18.95 for two people, and can be ordered with gluten-free buns too. The crispy “Chicken” burger (£9.45) is a soya protein-based patty and comes with house-made tangy ranch dressing, crispy onions, gherkins and lettuce. It is available at its three sites throughout September and signals the start of a line of “chicken” specials for the brand. The Vurger Co opened as a market stall in 2016 but after a successful Crowdfunding campaign in 2017, when £300,000 was raised within 77 hours, it now has permanent sites in Shoreditch, Canary Wharf and Brighton. 

Mobile ordering app Fetch acquires Irish counterpart: POS8, owner and developer of mobile ordering app Fetch, has acquired Irish counterpart Bamboo from Norse Starlit. Bamboo operates in about 150 venues in Ireland. Following development from the POS8 team, and smashing its £150,000 fund-raising target on Seedrs by almost 300%, Fetch launched in the UK just this month. Fetch co-founder and chief executive Jason Jefferys said: “We appreciate the value of the Irish market, and are confident as the market recovers, we will be well positioned to support and benefit our customers. We look forward to working closely in the near future to expanding our footprint across the rest of the country.” Andrew Connolly, director of Bamboo, added: “Fetch has ambitious plans and recognises Ireland as one of the key target markets and this is where we have the experience. We look forward to moving this forward together and offering increased benefits to our customers.”
Beannchor Group opens £4m ‘new concept’ Lisburn hotel: Northern Ireland hospitality company Beannchor Group has opened its long-awaited £4m “new concept” hotel in Lisburn. The company, which owns pubs, hotels and restaurants across the country including nine Little Wing Pizzerias, has launched the Haslem Hotel, creating 50 jobs. First mooted two years ago, the property features 45 bedrooms, an 80-seater open-plan lobby and bar area, 68-seat restaurant, residents’ gym and conference room. The Haslem occupies about 30,000 square foot of the Lisburn Square scheme, built on the site of the former Argos store and adjoining first floor space. Its Haslem Kitchen restaurant is run by Patrick Leonard, executive head chef of sister venue The Merchant. Beannchor director Conall Wolsey told The Irish News: “Haslem is a new concept for Beannchor, but we are confident demand is there – for locals seeking out a place to come and socialise, and for tourists travelling for business and leisure from the UK and Ireland.”

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