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Tue 5th Jan 2021 - New one-off grants of £9,000, drive-thru spend up 45%
Chancellor Rishi Sunak unveils one-off grants of up to £9,000 for struggling firms: Chancellor Rishi Sunak has announced one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the spring. The Treasury has this morning set out a new £4.6bn package to help retail, hospitality and leisure sectors businesses cope with the latest lockdown. The extra funding – which is on top of existing £3,000 grants – aims to help firms make it through until the spring, when restrictions will be lifted after the vaccine is rolled out. The new funding is provided on a per-property basis to support businesses through the latest restrictions, and is expected to benefit over 600,000 business properties. Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring. This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.” The one-off top-ups will be granted to closed businesses as follows: £4k for businesses with a rateable value of £15k or under; £6k for businesses with a rateable value between £15k and £51k; and £9k for businesses with a rateable value of over £51k. A further £594m cash pot is also being made available for Local Authorities and the Devolved Administrations to support other businesses not eligible for the grants, but still may have to close down. The furlough scheme, which pays people 80% of their wages, is already set to go on until the end of April. Chris Jowsey, chief executive of Admiral Taverns, tweeted: “The good news is that government has recognised need for more £ support. BUT it is a one-off top up of £4,000 if RV is less than £15,000, so additional £1k per month for small businesses closed until April?” UKHospitality chief executive Kate Nicholls, said: “This is obviously a very positive step to keep businesses afloat in the immediate term and, for that reason, must be welcomed. The Chancellor has rightly recognised the costs imposed on hospitality businesses by enforced closures and the need for additional support. It is also encouraging that the discretionary grants address the suffering in the supply chains upon which our sector is reliant. However, while this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector. To address the inevitable and existential challenges that hospitality faces, we need confirmation of extensions to the business rates holiday and of the 5% VAT rate. On its own, today’s support is not enough. Businesses need a longer-term economic plan and it would befit the crisis that we face if the Chancellor brought forward his Budget to make the announcements necessary to reassure businesses and allow them to plan their survival. Commercial certainty cannot come soon enough and only the Chancellor can deliver it.”

NPD Group – drive-thru restaurant business soars: The trend for ordering food and drinks from our cars at Britain’s growing number of drive-thru restaurants soared from September to November 2020 according to global information company The NPD Group. There were 121 million visits to Britain’s 2,000 quick service restaurants (QSR) that offer drive-thru in those three months in 2020, a 14% increase on the same period last year. Spend was up 45% to £723m over this time frame, with consumers tending to place larger-than-average orders at the drive-thru window. According to footfall analysis from NPD’s SnapMyEats data, the growth in drive-thru in these three months was a result of consumers switching from eating in and takeaway options during lockdowns and tiering, rather than drive-thru generating completely new visits. 17 million visits were switched to drive-thru from eat-in, and 12 million drive-thru visits took the place of takeaway or collection. During the month of November, drive-thru visits reached 37 million, up 27% versus November 2019, and drive-thru spend rose 73% to £213 million. Dinner and treating occasions were the main beneficiaries, with dinner 20% more important compared to pre-covid-19 levels and treating occasions up 47%, as consumers looked to relieve the boredom of lockdown. Much of the growth in drive-thru is linked to the coronavirus pandemic as people spend more time in their cars than on public transport, and for some people, there’s often an added sense of covid-19 security when ordering from a car. In addition, Office for National Statistics data tells us that online shopping accounted for a record 36% of all retail sales during November, meaning large numbers of delivery vans on our roads potentially using drive-thru services. QSR delivery remains big business in the GB, with £1.6bn spent by consumers during the three months to November 2020, 27% of total QSR spend. This is more than twice the amount spent on QSR drive-thrus over the same period (12% of total QSR spend). But while QSR drive-thru is smaller than QSR delivery, its undoubted popularity with consumers suggests it will grow strongly. NPD expects that QSR chains will continue to open drive-thrus, as sites are generally cheaper than on the high street and planning permission is often easier to obtain. In addition, it is likely that drive-thrus allow restaurant chains to keep more revenue and profits compared to delivery, where commission is often paid to a third party. Britain has a long way to go if it is to catch up with the dominance of drive-thru in the US. In the US, there were 4.7 billion QSR drive-thru visits in the three months September to November, which equates to 42% of all QSR visits, a share that is almost four times bigger than the GB equivalent. Unlike Britain, drive-thru is far bigger than home delivery, with delivery was 12% of total spend in the three months, compared to 38% for drive-thru. Dominic Allport, insights director (foodservice), The NPD Group, said: “Already on the rise, there’s no question that the popularity of drive-thru in Britain has had a boost from covid-19 as people tend to feel safer and more secure in their cars. Ordering in advance via an app, and a contactless experience at the window, offers additional reassurance to drivers and their passengers, and as a result, many have shown their preference for the drive-thru. The format is not new to some of the major foodservice operators like McDonalds, who have long used drive-thru as a complement to their high street and delivery offerings. However, for the coffee chains, drive-thru offers a distinct area of growth to help compensate for reduced footfall on high streets up and down the country. As we face a new way of living, with perhaps more time in our cars and a greater reliance on online and digital ordering, it makes sense for operators to invest in drive-thru, and we expect to see it expand beyond coffee and burgers to pizza, Indian, vegan and other cuisines.”

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