Story of the Day:
Threat of second industry lock-down leads to economic warning and sharp fall in sector share prices: The threat of a second mass closure of pubs and restaurants or yet more restrictions on the industry has resulted in a sharp fall in sector share prices and a warning from the Centre for Economics and Business Research (CEBR) another lock-down could “knock the stuffing out of consumer and business confidence”. Measures said to being contemplated by the government include using police patrols to shut pubs and restaurants if they break the “rule of six”, and a 10pm curfew on hospitality businesses across England, according to The Sun. A Cobra meeting of government ministers and police is due to take place on Tuesday morning (22 September) as prime minister Boris Johnson comes under mounting pressure to ensure coronavirus cases do not spiral out of control while keeping the economy going. Health secretary Matt Hancock said on Monday (21 September) he could not say if pubs and restaurants would be open this weekend. The CEBR has warned a second national lock-down could cause widespread business collapse and unemployment. It also warned 10pm curfews introduced elsewhere in the UK could reverse the country’s economic recovery if placed on London venues. It predicted new lock-down restrictions would decimate a return to health for Britain’s pubs and restaurants, and would likely dent the British economy by more than £250m a day. The CEBR added new restrictions could cause GDP to sink between 3% and 5% in the final three months of the year compared with the third quarter, when the UK economy plummeted to its deepest recession on record. Douglas McWilliams, deputy chairman of the CEBR, said the end of the furlough scheme – which sees the government pay part of workers’ salaries – on 31 October, could also prompt swathes of job losses as “tens of thousands of businesses are hanging on by a thread and likely to run out of cash”. Fears of a further lock-down of hospitality businesses saw a major drop in share prices, including Mitchells & Butlers, whose price dropped more than 15%. Meanwhile, the Campaign for Pubs, the grass-roots campaign for publicans and pub-lovers, has written an open letter to Johnson, warning another lock-down or national curfew would be “disastrous”. The letter, which has been signed by more than 150 publicans, said the effect on these businesses and those who run them must be properly considered as part of any decision to close pubs for a second time. These issues would need to be factored into a support package for pubs – and publicans and their families – in the event of any such closure.
Weekly like-for-like sales stabilise at 91% of last year’s levels, but rise 15.5% against July figures: Like-for-like sales in the hospitality sector have stabilised at 91% of last year’s for the second week in a row but are 15.5% up on the last week of July, according to S4labour, the online labour-scheduling management system from Catton Hospitality. As demonstrated last week, food sales continue to shine – up 4.9% on figures from the same period in 2019 – but drinks have evaporated somewhat, slipping by 18.7%. Once again, like-for-likes in London continue to lag behind the rest of the country, down 28.4% on the same week last year, with food sales dropping by 23.9% and drinks taking a 30.5% hit. Meanwhile, outside the capital, like-for-like sales fell by 3.7%, with food impressing with a rise of 11.3%. S4labour chief product officer Richard Hartley stated the figures indicate a flattening of sales and this could be the norm in the short term yet an extension of warm weather has been a welcome boost.
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Alcohol sales rise by 36% for online diners during lock-down: Research by City Pantry, the business-to-business catering market place owned by Just Eat, has shown sales of takeaway alcohol have risen by 36% during lock-down. The business claimed this is a mix of both demand and restaurants’ new offerings during covid-19 to generate new revenue. Northern Ireland saw the biggest increase in alcohol product orders with a rise of 9.3%. East England was second with a 7.7% boost, followed by East Midlands and Wales both at 6.4% then the south east at 5.5%. The lowest rise was in West Midlands at 3.5%. These increases were noted in conjunction with food ordered as takeaways or deliveries during lock-down when pubs were closed. City Pantry financial director Tom Squire said: “It’s important that we, in the hospitality industry, continue to work together to find solutions that are covid-safe and adapt to meet the evolving needs of consumers. We’ve already seen hospitality businesses adapt and create new offerings during lock-down – from creating recipe boxes of their best-selling dishes to hampers that include treats and alcohol, all available for delivery to people’s homes. Convenience and variety have played a big role in this increased demand, with busy remote workers not able to spend sufficient time preparing all their meals from scratch every day.” The data also highlights regional changes with food choices too. Brunch has enjoyed the biggest rise overall with orders jumping by 182% in Northern Ireland, while Scotland has seen orders of Greek food – such as moussaka, baklava and gyros – rise by 167%. Plant-based takeaways have also risen by almost a third (29%) overall and dessert purchases went up by 151% in Wales and 141% in the east of England, while the average takeaway order value is now 10% higher than before lock-down.
Restaurant forced to close after social distancing breaches, sister restaurant linked to five covid-19 cases: Indian food restaurant Tipu Sultan, in Oadby, Leicestershire, has been forced to shut until Sunday, 18 October, after a closure notice was issued for non-compliance with social distancing regulations. Tipu Sultan’s sister restaurant in Birmingham was forced to implement strict rules at the start of September after five positive covid-19 cases were linked to the site. Leicestershire County Council, in accordance with Oadby and Wigston Borough Council, has enforced a month-long closure on the Oadby site. Leicestershire County Council head of regulatory services Gary Connors said: “The order has been issued following non-compliance with social distancing as well as other issues brought to our attention about the use of the premises. The concerns constitute a serious and imminent threat to public health and, given the rapid rise of cases in the borough, we have no alternative but to use our new powers.” Oadby is currently being affected by additional regional lock-down measures after cases of coronavirus shot up recently, making it one of the highest infected areas in the UK. The borough has covid-19 case numbers of 145 per 100,000 people and the government has issued councils powers to impose prohibitions, requirements or restrictions in relation to individual premises. Leicestershire County Council director of public health Mike Sandys said: “This steep rise in cases in the borough is off the scale – and underlines that residents need to change their behaviour. Businesses and restaurants play a vital role in getting the situation under control and we will take action where we believe it poses a health risk to residents.” Oadby and Wigston Borough Council head of law and democracy David Gill explained the restaurant had been subject to scrutiny since August and found multiple examples of social distancing not being adhered to.
Job of the day: COREcruitment is on the lookout for a head chef for a premium pub brand. Based in Leicester, this position will pay between £35,000 and £38,000. The ideal individual will be a creative but operationally focused head chef who is eager to be part of the opening for this flagship multi-outlet venue. They’ll ideally come from a high-volume, fresh branded operation, be confident in getting involved with menu development as well as ensuring all aspects of back of house run as smoothly as possible. They’ll also be confident in training groups of staff. Anyone interested can send their CV to email@example.com
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Brakspear owner JT Davies & Sons registers record Ebitda and turnover up 11%, post-covid ‘better than feared’: Henley-based pub operator and brewer Brakspear’s parent company JT Davies & Sons has increased its turnover by 11% to £35.3m up to the end of its financial year to 29 December 2019 – and trade has not been as bad as expected since lock-down was lifted. This figure also generated record Ebitda, before exceptional items, of £10m – up 15% on its previous year. Meanwhile profit before tax rose by 18% to reach £6.4m. Sales growth was driven by its managed house division, which now consists of 15 pubs, restaurants and inns. Like-for-like performance was up 2%, two site acquisitions generated an extra £2m and another £1.5m from the full-year growth of The Frogmill, near Cheltenham. The company’s tenanted and leased estate saw a 1% reduction in turnover as a result of one site transferring to the managed house division and the sale of another site. The improved Ebitda is a result of higher managed house sales supported by improved management, efficiency and productivity across the managed house estate. On recent trading, chief executive Tom Davies said: “Since July, trading has been better than we had feared and we are grateful to the government for its support. We are, however, extremely concerned about the unfounded anti-pub and restaurant rhetoric coming from the government in relation to the rise in covid cases. We have proved to be a covid-responsible industry doing our best to keep unemployment down and get the economy moving again. We need to government to extend the rates relief by another year while undertaking a complete rates review, reduce beer duty and extend the VAT reduction indefinitely to help us help them get our economy firing and, ultimately, return more to the Treasury through increased sales and greater employment.” On the financial figures up to the end of December, Davies added: “I am extremely pleased with our performance for 2019 and proud of the business for delivering a much better level of profitability on growing sales. Our core tenanted and leased business continues to trade consistently well. We have some of the best pubs and operators in the country.” Brakspear added three new sites to its growing managed estate. The Nags Head, in Abingdon, was purchased in June and The Golden Ball, in Maidenhead, was acquired nearer the end of the year. The Crown, near Reading, was transferred from the tenanted and leased estate. The group has, inevitably, been affected by coronavirus as all tenanted, leased and managed pubs, restaurants and inns were closed from 23 March to the beginning of July. Davies added: “This year has delivered an unexpected set of challenges, which the business addresses daily, ensuring that our 241-year old company will be in a good position to enter year number 242.”
Stonegate extends tenant support package, now worth more than £36.5m: Stonegate Pub Company has announced further business support within its lease and tenanted business – Ei Publican Partnerships – creating an overall support package, since lock-down, in excess of £36.5m. The additional support includes rent reductions of 30% in October and a reduction of 20% in November for tied publicans operating substantive agreements in England. This package follows the rent and credit provisions that Ei Group gave to publicans from April to September, including publicans who were not in receipt of government grants receiving a three-month rent credit for the period. Nick Light, managing director of Ei Publican Partnerships, said: “The road out of lock-down is a long one and we are standing by our publicans every step of the way to help safeguard their businesses in these uncertain times.” In July, Stonegate used its scale as a managed house operator to offer promotional pricing for a three-month period for wine, spirits and minerals to its lease and tenanted business. Following positive feedback, this initiative is being extended until the end of November, enabling publicans to stock up for the Christmas period.
@Pizza to launch £820,000 crowdfunding campaign to support launch of UK’s first drive-thru pizza concept, targets 30-strong estate: Edinburgh-based pizza concept @Pizza is to launch an £820,000 fund-raise on crowdfunding platform Crowdcube to support the launch of the UK’s first drive-thru pizza concept. The raise will take the form of a convertible loan that will earn 10% interest per annum until it converts. Convertible loan holders will have an option to convert their capital into shares at a 25% discount if @Pizza raises equity within the next 36 months. The funds will be used to expand through a mix of permanent sites and semi-permanent outlets – the latter of which will be drive-thrus in the form of shipping containers. The company – which currently has two restaurants, in Edinburgh and Birmingham – is looking to build a portfolio of 20 to 30 sites across the UK in four or five “clusters”. The shipping containers will occupy spaces of between 22 and 30 square metres. The drive-thrus would be able to make up to ten pizzas a minute, with customers offered unlimited options to customise. They would be able to order via an app with the option of collection or delivery to their vehicle. The business said having proven the concept, it was ready to now take it to a wider audience through its “highly scalable” model. The shipping containers meant the company would not be tied to long-term rent deals in potentially unprofitable locations. Co-founder Rupert Lyle said: “Consumers crave new experiences and the UK pizza restaurant market, which is worth £5.2bn, lacks differentiation, quality, consistency and value; which will impact restaurant viability in the new norm. Our drive-thru restaurants will offer all of these attributes with the added convenience of the flexibility to enjoy pizza exactly how people want it.” @Pizza is also due to open a site at the St James Quarter development in Edinburgh.
Byron begins dark kitchens move: Better burger brand Byron, which last month was sold via pre-pack administration to investment vehicle Calveton UK under newly formed company Famously Proper for £4m, has begun its move into dark kitchens. The Simon Wilkinson-led business has opened kitchen sites through Foodstars in Colindale, Wandsworth and Birmingham. It is thought it will also open a site with Karma Kitchen at its new Wood Green kitchens unit. Pre-covid, the company’s delivery segment was understood to be posting ahead of a 10% like-for-like revenue. It’s thought the company will initially look to open five dark kitchens and may also explore the further rollout of fledgling virtual brand Cheese Louise. Byron has so far reopened 18 of its restaurants across the country. It’s thought to be currently in negotiations regarding a handful of sites, which would make up its final estate.
Boparan to open its biggest Slim Chickens to date, in Manchester and first with dedicated bar: Boparan Restaurant Group (BRG) is set to open its ninth branch and biggest Slim Chickens restaurant to date, in Manchester’s Trafford Centre. The restaurant, the third Slim Chickens to open this year, will offer click and collect and delivery via Deliveroo, UberEats and Just Eat. The 2,527 square foot venue, which will open on Monday, 2 November, will be housed on the former Carluccio’s site at the scheme. It will accommodate around 135 covers and will be the first Slim Chickens restaurant to have a dedicated drinks bar. Slim Chickens currently operates sites in the UK, in Bluewater, Cardiff, Bristol, Southampton and Birmingham, plus three in London. In July, BRG confirmed JRK Restaurants as the first UK franchise partner for Slim Chickens, as it sought to accelerate the growth of the “better chicken” brand. BRG entered into a franchise development agreement with JRK Restaurants under which the new partners will open initially five outlets across the south coast. The first site under the agreement is located within Southampton’s Westquay Shopping Centre. BRG is thought to have a number of sites in various stages of development for Slim Chickens, with further openings believed to be lined up in Reading, Leeds and Sheffield. The brand was founded by Tom Gordon and Greg Smart in 2003 and currently operates more than 100 restaurants in the US.
TRG outlines proposals to overhaul remuneration policy: The Restaurant Group (TRG) has unveiled proposals to overhaul its remuneration policy and replace the performance-based long-term incentive plan (LTIP) with a restricted share plan. The company had intended to carry out a review of the policy this year but said given the exceptional events of 2020 related to covid-19 and the current long-term incentive plan “no longer being appropriate”, the remuneration committee has “decided to accelerate its review”. TRG stated: “Even when proposing targets for the 2020 grants (which were not ultimately made), the committee was struck by the challenge of setting three-year targets in a dynamic market with no listed peers. Work had commenced on the 2021 policy review with a view to replacing the LTIP with a restricted share award over a lower value of shares, to better align executives with the shareholder experience and recognise the challenge in setting targets. Given the impact of covid-19, the committee reflected on a number of different long-term schemes, including one more geared and linked to stretching recovery targets. However, while this may have some short-term attractions, it felt this would not reflect the best means of aligning executives and longer term shareholders into the future. It is, unfortunately, easy to envisage circumstances in which LTIP targets either become too easy for management to achieve or unrealistic. In both cases, management would not be incentivised by the LTIP, and that would not be satisfactory for shareholders. The board of directors believes therefore our executives can be best aligned with shareholders through restricted shares, which inherently provide an immediate and significant interest in the share price alongside our longer-term investors.” If approved by shareholders at a general meeting on Thursday, 8 October, the new arrangements will take immediate effect. TRG pointed out the 2020 LTIP grant proposed in the current remuneration policy was never made, “given the dramatic reaction of the share price to the unprecedented impact of covid-19”, but could be made in the form of restricted shares if the new policy is approved. In addition for the 2020 grant, the committee has also committed 50% of the restricted shares will only vest if the company’s Ebitda in FY22 is at least £100m – subject to adjustment for any acquisitions or disposals over the period.
Incipio Group strengthens management team: Incipio Group, operator of venues including Pergola Paddington, The Prince and Lost in Brixton, has strengthened its management team, Propel has learned. Nick Wyborn will join the group as head of food while Josie Adams has been appointed head of people. Wyborn joins from Scottish restaurant brand Mac & Wild, where he was most recently head of food, and has experience working in kitchens across London, including The Langham Hotel, Claridge’s Hotel and The House of Saint Barnabas. Adams joins from pub operator Young’s, where she was head of learning and development and responsible for its training and development and company culture. Incipio Group chief executive Ed Devenport said: “We’re delighted to announce these appointments to our management team. The vast knowledge and experienced gained from their combined years working in the sector will be a real asset to our team and help to support our future growth plans.”
Cosmo begins reopening its estate: Buffet concept Cosmo, which closed its entire 18-strong estate in March, began the reopening of its estate over the weekend. The company reopened its sites in Edinburgh and Reading, and said that announcements would be made for other branch openings in due course. In May, the business reopened its site in Derby for delivery and takeaway. The company said it had devised a safe collection scheme that included two metre-markings on the steps outside and minimal contact with customers and delivery drivers, and is offering three set menus. As of 19 June, Cosmo had delivered more than 5,000 meals to NHS staff in hospitals and care homes across Derby, Glasgow, Manchester and Oxford.
Hong Kong-based dessert operator Hui Lau Shan to make UK debut, in Nottingham: Hong Kong-based dessert operator Hui Lau Shan will make its UK debut this week, with a site in Nottingham. Wells Qi, the former owner of Bamboo Bar and Kitchen, in Beeston, has acquired the franchise rights for Hui Lau Shan in Britain. The first site in Nottingham’s Market Street will launch on Wednesday (23 September), following a £500,000 investment with several more planned. There are more than 300 branches of Hui Lau Shan across the world. The company, which launched 60 years ago in Hong Kong, serves a range of desserts and drinks made from fresh fruit, with particular emphasis on mango and the company’s signature dish – the Mango Chewy Ball. The Nottingham branch will have seating inside for 20 diners. Qi told The Business Desk: “In Hong Kong, there are branches of Hui Lau Shan almost everywhere you go. It is popular for being a casual, affordable and take-out friendly dessert shop and every store is so busy in Hong Kong it’s almost impossible to secure a seat inside. We hope that the name Hui Lau Shan will become as a big a name in Nottingham, and the rest of the country, as it is in the Far East.”
Escape Hunt secures Cheltenham site as it strengthens UK-owner-operated portfolio: Escape room operator Escape Hunt has a secured a site in Cheltenham as it looks to grow its UK-owner-operated site portfolio. The company’s 12th site is set to open at The Brewery Quarter. Games for the site have been manufactured and delivered and fit-out will commence shortly. Cheltenham will have five games rooms and will also offer outdoor experiences. Meanwhile, its tenth site, in Norwich, will open on Wednesday (23 September) at Intu Chapelfield. The venue has six games rooms, which include an instance of Escape Hunt’s newest Doctor Who themed game – A Dalek Awakens – as well as a room that will be used for virtual reality games. Outdoor games will also be available. Work at the company's 11th site, in Basingstoke, is substantially complete with opening planned for next month. The outlet will have six rooms, including virtual reality and A Dalek Awakens. Outdoor games will also be available. Chief executive Richard Harpham said: “This progress represents important steps in the execution of our key strategic priority to increase our UK-owner-operated footprint. In each case, we have been able to secure a prime retail site on favourable terms, which is testament to the growing strength of our proposition and the opportunity afforded by the current retail property environment.”
Ex-Jamie Oliver Restaurant Group and Draft House FD to launch new cafe-wine bar concept: Bharti Radix, ex-finance director of Draft House, Jamie Oliver Restaurant Group and Petersham Nurseries, will launch her new café-wine bar concept, BloomsYard, on Saturday (26 September) in Watford. Radix, who earlier this year stepped down as chief financial officer of Coffeesmiths Collective, will open the first site under the new concept in the Upper Mall at the Intu Shopping Centre in the Hertfordshire town. BloomsYard is described as “an all-day social hub, an opportunity to bring people together for the shared love of all things natural and delicious… specially selected freshly roasted coffee, high quality matcha, refreshing wellbeing teas and wonderful wine”.
Sourced Market opens debut site outside London with new operation at M1 services: Sourced Market, the hybrid deli and dining brand, has opened its debut site outside London – at Leeds Skelton Lake Services at Junction 45 off the M1. The venue has brought together an artisan collection of food and drink producers about 3.5 miles south east of Leeds, and was opened by Extra MSA Group. Drinks available include craft beer and spirits all available at a licensed bar. Food includes sausage rolls and quiches, bread, milk, tea, cake and free-range chickens. There will also be access to an outside terrace. Sourced Market managing director Scott MacDonald said: “Bringing together food and drink’s most exciting innovators is part of our DNA and we’re excited to be creating a foodie experience for those making journeys on the M1 as well as residents in Yorkshire.” Sourced Market was due to open the site in February as the group’s sixth site – its first outside London. Extra MSA Group chief executive Andrew Long added: “The Sourced Market team has worked tirelessly to source some fantastic brands local to the region, and will be creating jobs both directly for Leeds and indirectly in the regional ‘supply chain’ for the wider region.”
Mr & Mrs Smith co-founder seeks £450,000 to continue development of premium delivery concept: Andrew Grahame, the co-founder of Mr & Mrs Smith, the boutique hotels specialist, is seeking to raise £450,000 on crowdfunding platform Seedrs for The Cook & The Thief, his delivery concept for high-end restaurants, including those with Michelin stars. The business, in which Grahame has invested more than £300,000 of his own money and spent the past five years working on, aims to serve the premium end of the food delivery market. It is initially focused on the capital where it has a “ghost kitchen” in central London, but aims to roll out to other cities and countries. The funds are being raised through a convertible share equity campaign, where it is offering a 25% discount on the equity valuation. The Cook & The Thief aims to operate more than 100 ghost kitchens worldwide in the next five years and wants to open three more kitchens in London by Christmas. The business is also developing new software, including a rider allocation app. Its proprietary scooter-based technology is centred around a suspended “housing” device that stabilises food during transport – “a box within the box” on the back of a delivery scooter. This allows the food to be better isolated and protected from movements caused by the vehicle on the road, the company said. By the end of August, the business had received almost 1,200 orders from 700 customers with a repeat order rate of 53%. Revenues are derived from commission on each order paid by the restaurant partners.
Lucky Penny launches Iberian cafe-wine bar BoBo in Liverpool: Liverpool-based hospitality consultancy Lucky Penny has launched Iberian wine bar and cafe BoBo. It will serve Spanish and Portugese-inspired drinks and snacks all day. Menu highlights include chorizo sausage rolls, fresh pastel de nata custard tarts, charcuterie and cheeseboards, jugs of sparkling sangria and a diverse wine list. An all-day grazing brunch offer at weekends is in the pipeline too. The site is located on Castle Street and has taken the spot of the Italian wine bar Veeno. Lucky Penny Group managing director Steven Burgess said: “We love the food and drinks of Spain and Portugal but didn’t want to just do another tapas joint, we wanted BoBo to feel a bit more modern and contemporary.” The interior features an antique chandelier, amber lighting, rendered walls and dark green tiling. Building contractor Sefco said “our brief was to combine a bit of the modern and the new. We knew the chandelier at the front was perfect for this project and when combined with some more modern prints and art on the walls, it makes it feel a bit more up to date.” BoBo is the sister venue of Abditory bar located close by and is the second venue from Lucky Penny.
Swingers to reopen sites this week: Crazy golf and food and beverage concept Swingers is to reopen its two London sites on Thursday (24 September). The venues in the West End and the City will have a raft of measures in place to ensure they meet covid-19 safety guidelines. These will include a new app that combines food and drink ordering capability with an online scorecard and a track-and-trace form. Each of the courses has been revamped and will have a fairground theme and also feature clock towers, waterwheels, carousels and Ferris wheels. The line-up of street food traders will also return, including Mexican brand Breddos Tacos, the joint venture between Nud Dudhia and Chris Whitney and Gleneagles owner Ennismore; Patty & Bun, the better burger concept led by Joe Grossman; Pizza Pilgrims, the London-based sourdough pizzeria concept founded by brothers Thom and James Elliot; and London-based pizza company Made of Dough. Swingers started as a pop-up in Shoreditch and opened its first permanent venue beneath the Gherkin in the City in 2017 before transforming the former BHS store in Oxford Street for its second.
50% recycled plastic use milestone reached by Coca-Cola: Recycled plastic use at Coca-Cola European Partners (CCEP) has reached 50% in the business’s core portfolio. All plastic bottles, which are 100% recyclable, now use 50% recycled plastic in brands such as Coca-Cola, Coca-Cola Zero Sugar, Diet Coke, Fanta, Sprite, Dr Pepper and Lilt – and CCEP pledges remaining brands will follow suit later in the year. The move means Coca-Cola in Great Britain is now using more than 21,000 tonnes of recycled plastic per year. Stephen Moorhouse, General Manager at Coca-Cola European Partners Great Britain, said: “This milestone marks an important step towards our ambition across western Europe to remove all non-recycled plastic from our bottles. One of the key challenges the industry currently faces is that there isn’t enough food-grade recycled plastic locally available in the UK to switch to 100% rPET across our entire range. There needs to be more high-quality recycled plastic produced, so it’s vital to make sure we collect more bottles in an efficient way, and stop it ending up as waste. Although all our bottles have been 100% recyclable for many years, too many are still not being recycled. That’s why we support the introduction of a well-designed Deposit Return Scheme. This will really encourage more people to recycle.” Waste and Resources Programme (WRAP) strategic engagement manager Helen Bird said: “It takes 75% less energy to make a plastic bottle from recycled plastic compared with using virgin material, and it’s always important to remember that using recycled content in the manufacture of new products and packaging is the whole point of recycling. This announcement by Coca-Cola, one of our founding UK Plastics Pact members, is good news for the environment and good news for industry.”