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Thu 7th Jan 2021 - Propel Thursday News Briefing

Story of the Day:

UKHospitality urges members to email their MP for ‘targeted support measures’ ahead of debate: UKHospitality has urged its members to write to their MP to demand “a package of targeted support measures” ahead of a Westminster Hall debate on support for the hospitality sector on Monday (11 January). The trade body has set up a pre-written letter that simply needs members to add their details to and send it via email. UKHospitality said: “With England going back into yet another lockdown further threatening the futures of businesses, and only a small addition of financial support, it is clear we urgently need a package of targeted support measures. Some 41% of sector businesses suggested that they would fail by mid-2021 and only one in five sector businesses have enough cash flow to survive beyond February. When the country emerges from the pandemic, hospitality businesses will be pivotal in restoring a sense of normality. But we can only play this role if we are appropriately supported while restrictions are in place. On Monday, 11 January, there will be a Westminster Hall debate on support for the hospitality sector.” The trade body said as many MPs as possible must be urged to support the sector on measures including extending the reduced VAT rate, extending the business rates holiday, creating a hospitality and tourism recovery fund; and developing a roadmap out of the tier system. The letter template can be assessed by clicking here. UKHospitality also said the letter can be edited to suit its members’ needs.

Industry News: 

Findlay – the government will have two choices on how it goes about repairing its own finances: Ralph Findlay, chief executive of Marston’s, has said the government will have two choices about how it goes about repairing what will be “devastating consequences on its own finances from all this”. Talking on Radio 4’s Today Programme, Findlay said that one will be to try and recover it by tax, and the other will be to try and promote consumer confidence and expenditure by keeping taxes low, and “for me the latter route is far, far more important”. He said: “I welcome the fact the government has provided that support [on Tuesday], inevitably you can get into debates about the level of that support and whether it is enough, and that will depend on individual circumstances for so many people. What I would say is that I look at that support as being necessary to getting many businesses through to the point when they can reopen. The issue will be when they reopen they don’t have their legs cut out from underneath them by the cliff edge of VAT going up and business rates being charged again. I would like to see the business rates holiday extended, as a well as the VAT cut – I think this is essential. Bear in mind, when businesses come to reopen they will have to restock. They are opening into an environment where nobody quite knows what confidence will look like. There will be a lot of uncertainty around so those two reliefs are essential for the rest of this year. It’s a certainty some pubs and restaurants won’t reopen. The impact on the sector has been enormous from all of this and the number of closures is very significant. Don’t underestimate the impact of this, not only on the number of pubs, but also on the number of people employed in those pubs. You mentioned the fact that we employ 14,000 people, half of those are under 25 and I really worry about the impact of this on their employment prospects in places where it is very difficult to find employment.”

Albert Roux passes away: The Roux family has announced the passing of Albert Roux OBE KFO, who had been unwell for a while, at the age 85, on Monday (4 January). Albert is credited, along with his late brother Michel Roux, with starting London’s culinary revolution with the opening of Le Gavroche in 1967. His son, Michel Roux Jr, said Albert’s sheer love of life and passion for making people happy through his food will be greatly missed: “He was a mentor for so many people in the hospitality industry and a real inspiration to budding chefs, including me.” The Roux family has requested their privacy at this time be respected. Over the years, chefs such as Gordon Ramsay, Marco Pierre White, Marcus Wareing, Pierre Koffmann, Monica Galetti, Jun Tanaka, Bryn Williams, Phil Howard, Stephen Terry, Rowley Leigh, Paul Rankin and Brian Maule have all earned their stripes in the Le Gavroche kitchen before going on to make their own contributions to the UK culinary scene.
 
Molson Coors calls for lower VAT on all drinks sold in pubs: Molson Coors has called for a VAT cut for drinks sold in pubs. Phil Whitehead, managing director for Western Europe at Molson Coors, said: “While a third national lockdown is evidently necessary to keep people safe, the needless ban on alcohol takeaway sales is another devastating blow for pubs, bars and restaurants that impinges their ability to keep their businesses running. The next few months are going to be incredibly difficult for the hospitality sector and the government’s newly announced grant funding provides a much-needed lifeline. But this support must be extended, beyond just the front-line venues, to the vital supply chain they depend on. The UK brewing industry is the envy of the world because of its unrivalled variety – from large brewers offering household name brands to the thousands of craft and micro-breweries that make the sector such a rich tapestry. The pub and brewing sector employs almost one million people and plays a vital role in communities across the country but unless action is taken, committing to an extension of the 5% VAT rate to all drinks sold in pubs as well reducing beer duty rate, we risk losing large swathes of this essential ingredient of Britain’s unique hospitality culture.” 

Jonathan Neame – we need to get open by Easter at the latest and want to play our part in speeding up vaccination: Shepherd Neame chief executive Jonathan Name has stressed the importance of reopening by Easter at the latest – and has offered help in speeding up vaccination. He said: “It seems the only realistic way to emerge from this crisis is by delivering the mass vaccination programme as quickly as possible. To this end – as others in our sector have done – we have offered up some of our pubs to act as vaccination hubs, in target areas. In the main they are well located, spacious and with large refrigeration capacity, and so could be ideal. We have also asked the government to enable companies to organise vaccinations for its own team members – under the supervision, of course, of appropriately trained healthcare professionals. Every year, we provide flu vaccinations to brewery team members and would like to offer the new vaccine to all team members as soon as possible. We feel this approach, if followed by other organisations, could greatly accelerate the national vaccine delivery. The longer this crisis goes on, the greater the economic pain and hardship for us all, particularly in the hospitality sector. We remain committed to supporting our licensees and so have cancelled rent for all our pubs. We welcome the announcement businesses in the retail, hospitality and leisure sectors are to receive one-off emergency grants of up to £9,000. However, grants are no substitute for being able to trade again and we are joining others in our industry calling for sustained investment in our recovery, in the form of an ongoing cut in VAT and cancellation of business rates for another year to 2022. In lockdown one, our 320 pubs and hotels were shut for 105 days. By mid-February 2021, the majority of our pubs will have been shut for a further similar time period. Over the summer of 2020, we traded with ever tightening restrictions through to 5 November. This cannot go on. We need to get businesses open again for Easter at the latest so we can all enjoy great British hospitality again in safe and regulated environments. We are willing to play our part to help the national effort to get us to this point as quickly as possible.”
 
French hospitality sites will not reopen on planned date of 20 January: Government ministers in France will not allow bars, restaurants and cafes to reopen as planned on Wednesday, 20 January, according to hospitality lobby groups. The hospitality sector was forced to close on 30 October as coronavirus cases began to soar and the country is currently reporting an average of more than 10,000 new cases a day, double the rate of 5,000 the government set as the threshold for further easing restrictions. Roland Heguy of UMIH, France’s biggest hospitality sector lobby group, and Marcel Benezet, an executive with the GNI lobby group, said after meeting with French finance minister Bruno Le Maire and other senior officials that reopening was off the table. France’s nearly 200,000 bars, restaurants and cafes said they are experiencing severe hardship because of the closures, with some facing bankruptcy. They have appealed to the government for more financial help.

Pub opens for elderly at care home: Residents at Chandler Court care home have welcomed the opening of a pub as all other pubs in England have been ordered to close during the lockdown. The Chandlers Arms has opened in the Bromsgrove-based home for 80 residents to enjoy discounted real ales, lagers, wines and cocktails. Residents are allowed in six at a time and must abide by social distancing rules. Resident Martin Dowell, 80, said: “It’s great to get the chance to meet up with other residents in the home for a pint and a chat.” Dawn Covill, manager of the Worcestershire care home, added: “We all miss going to the pub, and in these challenging times, there’s nothing like catching up with an old friend over a drink or two, so when residents told us they missed their local, we thought we’d bring it to them. The pub is associated with a lot of positive memories from their younger years, from their first-ever drink to countless hearty meals with family or friends, and everything in between.”

Company News: 

Vagabond appoints Matthew Fleming as new MD, eyes international launch: Imbiba-backed wine bar business Vagabond has appointed Matthew Fleming, formerly of Be At One and Stonegate Pub Company, as its new managing director, Propel has learnt. Fleming, who was formerly head of drinks innovation at Stonegate and head of innovation at Be At One. Fleming takes over from Andrew Stones, the former managing director of Be At One, who was appointed interim managing director at Vagabond last summer. Stones sits on the board of the eight-strong business. Founder Stephen Finch told Propel handing over the day-to-day management of the business would afford him the time to focus on new projects and the wider development of the company. This will include the introduction, later this year, of a subscription-based offer through the brand’s app and the launch of the business internationally. Finch said the business was in talks with prospective partners regarding a launch in Germany, with the hope that a first site could be open there before the end of this year. At the same time, the company still hopes to launch a site in Principal Place, Worship Street, Shoreditch, later this spring and a site on the South Bank in the summer. Finch said the company was also in negotiations on a further two sites.

Goodbody – Greggs produced a resilient fourth quarter: Goodbody food and beverage analyst Patrick Higgins has described Greggs’ fourth quarter trading as resilient with like-for-like revenues at 81.1% of 2019 levels (versus 70% forecast). He noted: “This is despite the increased restrictions experienced throughout November and parts of December and likely underpinned by strong growth of its digital platform (5.5% of fourth quarter revenues). The group’s franchise business, which is predominantly biased to locations accessible by cars, also performed robustly. As a result, and combined with a strong control of the cost base, the group expects a profit before tax loss of just £15m for the period, implying a significant improvement in the second half (£49.5m profit versus £64.5m loss in the first half) and significant beat against consensus forecasts for a circa £65m loss. This strong performance is also evident in the cash flow outcome, with the group ending the year with a net cash position of £37m (versus £5m forecast). Greggs also now has its own three-year £100m revolving credit facility in place, having repaid the monies due to the Bank of England under the covid corporate financing facility (CCFF). In terms of outlook, while difficult to predict performance given the backdrop, management do not expect profits to return to pre-covid levels until 2022 at the earliest. Despite this, the group has developed new ways of reaching customers, particularly digital (5.5% of sales in the fourth quarter) and expects to open 100 net news stores in 2021. Overall, this is a strong update from Greggs and the resilient trading performance through the restricted fourth quarter bodes well for its ability to trade through the current restrictions.”
 
Laine Pub Company reports turnover impacted by covid: Laine Pub Company has reported turnover dropped to £31,162,000 in the 52 weeks ended 16 August 2020, compared with £43,000,007 the year before, which covered 50 weeks. Ebitda was minus £1,373,000 compared with a positive figure of £4,075,000 the year before. Chief executive Gavin George told Propel: “The impact of ‘Lockdown One’ is reflected in the shortfall in sales for the year and in the reported Ebitda position. The creation of covid-secure trading environments, successful adoption of new ways of working, significant investment in external trading areas and the implementation of the Eat Out To Help Out scheme helped trade pick up more quickly than anticipated after the summer reopening, although sales remained short of the same period the previous year. But that was the high point of the subsequent roller coaster ride for our pub teams, which has required them to constantly adapt and change their ways of working, very often with little notice, in order to deal with the ever-changing restrictions and sudden closures. The recent banning of takeaway trade from pubs is a difficult pill to swallow, given it does not appear to apply to shops and off-licences. All our pubs are licensed for off-sales and, during the previous two lockdowns, we were able to generate income from takeaway products, many of which were produced in Laine’s brewery. We now have cellars full of stock that may have to be destroyed – again. We have seen in previous reopenings and throughout this crisis, just how important the British pub is to the British people. For a return to normality in as short a time as possible, much reliance is now placed on the government’s ability to roll out the vaccines quickly and effectively. But for pub businesses to survive the coming months, there needs to be a road map to recovery from the government that provides certainty around the support the industry can expect; for example, the VAT reduction becoming permanent plus extended to alcoholic drinks, and a further year of rates relief.” Turnover at Laine was £50.5m in 2018, which spanned 60 weeks. The accounting period was extended to allow the company to bring its financial year in line with its backer, Vine Acquisitions, which bought the business in May 2018. The company operates more than 60 pubs and its Laine Brew Co business produces a portfolio of craft beer at its production brewery in Sussex. The group also operates five pubs in its Mash Inns partnership with Ei Group, now owned by Stonegate.

Soho’s Robata concept eyes Birmingham launch: Robata, the London-based Japanese restaurant concept, plans to launch in Birmingham, Propel has learned. The concept, which is the brainchild of Sonny Huang, is understood to have lined up the former Chilango site in Birmingham’s Colmore Row, for an opening later this year. Huang launched his Robata concept in Soho’s Old Compton Street in March 2019.

Dom’s Subs to open in the City: Dom’s Subs, the Hackney-based sandwich concept, is to open a site in the City of London, Propel understands. The concept, which is the brainchild of Dom Sherington and Greg Boyce, is understood to have secured the former Subway site at 22 Bevis Marks for an opening later this year. Dom’s Subs currently operates a site in Hackney Road. Boyce and Sherington are also behind Lanark Coffee and also previously operated Visions Canteen in Shoreditch. Raven Rose acted on the Bevis Marks deal on behalf of the landlord.

Former The Lucky Onion Group duo to take on third project with Oxfordshire pub opening: Peter Creed and Tom Noest, who formerly worked at The Lucky Onion Group and are behind the award-winning The Bell in Langford, Gloucestershire, are to launch their latest site, The Lamb in Oxfordshire, later this summer, Propel has learned. Based in Shipton-Under-Wychwood, The Lamb is to become a 70-cover country pub with eight guest rooms and a private event space, with an opening planned for June. Creed and Noest relaunched The Bell in 2017. They also operate the Little Bell, a pop-up at the nearby Soho Farmhouse. Creed was part of the team that launched The Lucky Onion Group in 2008, playing a crucial role in its substantial growth. Noest joined The Lucky Onion Group in 2014, where he covered all front-of-house departments as well as spending time in the kitchen. He then moved to Made by Bob in Cirencester. Critics, including Giles Coren, Tom Parker Bowles and Marina O’Loughlin have lauded The Bell, with Coren saying: “Best mouthful of the year? Best mouthful of my life more like.”

IHG plans two hotels for Nottingham: Global hotel operator IHG has committed to bring two of its world-renowned brands to Nottingham after signing terms with the developer behind The Island Quarter development. The UK-based company will bring its upscale boutique hotel brand Hotel Indigo as well as its extended stay offering, Staybridge Suites, to the city as part of the multimillion-pound scheme that will transform this gateway area of Nottingham. The 17-storey hotel will comprise 223-bedrooms and suites – 155 located within Hotel Indigo and a further 68 aimed at multi-night business and leisure travellers in the Staybridge Suites, which will include a range of amenities such as a full kitchen and dedicated shared outdoor space exclusively for Staybridge Suites guests. The dual-branded hotel operation will be managed by IHG. They form part of the latest stage of the development, which will include a further 247 residential rental apartments and an extensive food and beverage area featuring a stunning bar and busy 100-metre long forum for people to meet. There will also be 3,000 square metres of flexible serviced office space, with some 400 desks. The hotel is the city’s first of its size in nearly two decades, forming part of a landmark tall building.
 
McDonald’s investment offered at £1,343,000: A freehold McDonald’s drive-thru site at Blaydon-on-Tyne is being offered for sale for £1,343,000. McDonald’s has 23 years left on its lease – it has a rent of £74,758.77 subject to five-year upwards-only rent reviews. The yield on the investment is 5.24%. The investment is offered via Allsop. 
 
Halewood reports 20% rise in turnover, profits dented by covid: Halewood Artisan Spirit has reported turnover rose 20% to £401.5m in the year to 27 June 2020. Profit before tax dropped to £1,305,000 from £6,846,000 the year before, affected by the pandemic and restructuring costs of £7,159,000. In Companies House documents, it stated: “The company reacted to covid-19 by stopping investment in international expansion and capital projects and embarked upon a restructuring strategy to remove excess capacity of low margin brands. Sales of the core brands remained resilient after the initial lockdown in March, with significant growth in Russian vodka and spiced rum. Halewood focused on driving down costs and investing in online distribution. In the UK, Halewood has de-listed lines particularly in the low margin carbonated ready-to-drink category with increasing focus on artisanal spirits driving a 7% growth in gross profit. International expansion in South Africa, Russia, China and Australia remain on track. While investment in North America has been scaled back.” The earnings of the highest paid director were £1,205,000, down from £4,707,000 the year before. 

Pieminister trials a ‘planet payback’ supplement to highlight the climate impact of different ingredients: Pieminister is to add a 10p supplement to it four beef pies in January. The pies have the biggest greenhouse gas emissions and the money raised will be used to purchase and plant trees as part of Pieminister’s forthcoming campaign – with Forestry England – launching April 2021. This trial is Pieminister’s response to the stark reality that beef consumption – even from British, predominantly grass-fed cattle – is three to six times more damaging to the environment than other meats such as chicken and pork, and even more so than plant-based ingredients. In response to this, Pieminister is taking steps to decrease the share of shelf space it gives to beef pies while increasing its range of plant-based alternatives. Pieminister hopes trialling this “planet payback” supplement will advance this move, highlighting to customers that while its award-winning beef pies will remain on the menu, it is important to understand the “true cost” of beef consumption on the planet. At the same time, Pieminister will showcase its growing range of non-beef and plant-based alternatives available to enjoy instead. Co-founder Jon Simon said: “Food production counts for 25% of the world’s carbon emissions and beef consumption is a huge part of the problem. As pie makers we have a responsibility to do something about this. We’re not telling people they should not eat our beef pies – we’re saying we should all acknowledge the impact beef has on the planet and give our customers good reason to try a non-beef alternative once in a while. It’s a bold move but we hope our ‘planet payback’ supplement will help with this while kicking off the fundraising for our forthcoming tree planting campaign with Forestry England.”

Administrators appointed to Midlands hotel group: Administrators have been appointed to a hotel group after the company suffered from a cash flow crisis brought on by the pandemic. Yasmin Bhikha and John Lowe from advisory firm FRP were appointed as joint administrators to Methodist Guild Holidays Ltd and Hothorpe Hall Ltd. Hothorpe Hall Ltd – a wholly owned subsidiary of Methodist Guild Hotels, is an events business that operates and owns the Hothorpe Hall venue near Theddingworth, Leicestershire. The site has been temporarily closed in line with government restrictions. All 30 staff members remain furloughed. Methodist Guild Holidays, which trades as Christian Guild, is a specialist hotel operator with three sites across the UK. Treloyhan Manor – a 19th century manor house hotel in St Ives – is operational, but temporarily closed due to the pandemic. All 21 staff members remain furloughed. Sidholme Hotel near Exeter and Willersley Castle in Matlock, a grade II-listed building in Derbyshire, were permanently closed during the first national lockdown. The joint administrators were appointed after both companies suffered sustained cash flow difficulties since the start of the pandemic. Bhikha, director at FRP and joint administrator, said: “Like much of the rest of the UK hospitality and leisure sector, Methodist Guild Holidays and Hothorpe Hall have seen their ability to operate severely restricted by the pandemic, which has led to financial difficulties and need for restructuring. The administration provides some protection as we explore options to secure a future for the hotel group. We have launched a marketing process to find investors and are having conversations with interested parties.”
 
Craft brewer looks to crowdfund alcohol-free brewery: Craft brewer Drop Bear Beer Co has unveiled plans to build Wales’ first alcohol-free brewery supported by a crowdfunding campaign. The brewery development is set to be funded through a £500,000 equity investment campaign that is currently live on Crowdcube. The brewery is expected to be fully functional by October 2021 and, when completed, it will initially create six jobs. Drop Bear’s sales and marketing director Joelle Drummond, who founded the Swansea-based company in 2019 with Sarah McNena, said: “We are looking at sites along the M4 corridor, between Carmarthen and Cardiff, and plan to open in October 2021. It’s been a challenging year for everyone but creating the Drop Bear Brewery was always part of our plans. The change to our business model due to covid-19 has only reinforced our belief that this is the right move for Drop Bear. We’re feeling confident and excited at the prospect of creating Welsh jobs in a time of job losses and redundancies. Our sales have grown by 2,000% this year and the alcohol-free sector has continued to grow. Drop Bear is well established as a major player in the alcohol-free industry and having our own craft brewery will help us to gain a bigger share of that market through increased margins and further adaptability. It will be the first alcohol-free brewery in Wales, and only the second in the UK.”
 
Yoh Burger lines up third site, this time in Bradford: Yoh Burger, which has branches in Rotherham and Wakefield, has submitted plans to open a third site, occupying the site of the former Gallopers pub on Bradford’s Wakefield Road. The restaurant will have space for 104 diners – Yoh Burger is also lining up sites in Leeds, Sheffield and Manchester. When the plans were first submitted, the application said the goal for the site’s design was to create a “local landmark” on the route. Up to 31 jobs would be created by the development of the site, according to the approved application. There would be around 29 parking spaces. The site used to be home to The Gallopers Pub, which had stood empty for a number of years before plans to fully redevelop the site were revealed. An application to build a restaurant and industrial units on the site had been submitted last year, alongside an application to demolish the derelict 1970s pub.

Operators sign up for Mansfield development: Taco Bell, Tim Hortons, and Domino’s Pizza have all signed up to take space at the Stockwell Gateway development, Mansfield. Taco Bell, the world-famous Mexican-inspired restaurant brand, will be opening an outlet that will create 30 jobs, and bring a new style of dining to Mansfield. A Taco Bell spokesperson said: “We are incredibly excited to be joining the community and we can’t wait to bring our craveable eats to Mansfield.” The opening will form part of Tim Hortons expansion plans in the Midlands, while Domino’s Pizza will relocate from across the road to a new purpose-built building. ARBA Property Group is behind the development of the town’s former bus station. Richard Burns, managing director at ARBA, said: “We’re delighted to share this good news, not just because it brings internationally loved brands to the development, but also because it shows confidence in Mansfield town centre and will provide exciting alternative dining options.” 

Jollibee lines up Nottingham opening: Jollibee, the Philippines fast food group, has continued to build its UK openings pipeline, lining up a site in Nottingham. The company is understood to have applied to open in the city’s Clumber Street, with an opening scheduled for late spring. Late last year, the brand said it had openings lined up in the UK, in Edinburgh, Leeds, Cardiff and a flagship site in London’s Leicester Square. The company, which opened its third UK site in November, in Leicester, has secured the Bella Italia site in Leicester Square for an opening in the first half of this year. This will be followed by openings in Edinburgh, Leeds, Cardiff and “other major cities across the UK”, as the brand looks to open 50 sites in the UK, during the next three to five years. The company, which launched in the UK in Earl’s Court in 2018 and in Liverpool earlier this year, is also thought to have lined up openings in Newcastle and Reading. 

Tim Hortons to open Harlow restaurant and drive-thru as expansion south continues: Canadian quick service restaurant brand Tim Hortons has announced it will open its next restaurant and drive-thru in Harlow, Essex, in the spring – as the brand targets more openings in the south of England. The site will be located at the Queengate Centre. It will create more than 40 full and part-time jobs. Kevin Hydes, chief commercial officer of Tim Hortons franchises in the UK, said: “Our location reveals are always highly anticipated by our customers, so I am thrilled we can share the news of our arrival in Harlow. We have already started recruiting a variety of full and part-time roles.” The announcement also forms part of the brand’s plan to create more than 2,000 jobs across the country in a bid to “bring Tim Hortons restaurants to every major town and city by 2022”. 

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