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Fri 29th Jan 2021 - Update: McDonald’s, Eat Out to Help Out, re-opening, Wales lockdown
McDonald’s reports like-for-like sales growth since August in the UK, 20% of sales were delivery: McDonald’s has reported that its like-for-like sales in the UK have been positive since August last year despite the imposition of restrictions – more than 20% of its sales in its most recent quarter were delivery sales. Chief financial officer Kevin Ozan said: “The UK has achieved comparable sales growth every month since August despite increased restrictions reintroduced in early November.” Chief executive Chris Kempczinski added: “McDonald’s is well positioned to emerge from this moment with competitive strength. And we’re confident we can keep capturing market share as we look to the future. We’re confident because we were growing share in most markets before covid. We’re confident because we’ve continued growing market share during covid. And we’re especially confident because we’ve gained important insights which will bolster the strategic vision we set with accelerating the arches. This clarity of purpose and strategy is the reason that in October, we increased our annual dividend to shareholders.

Various Eateries reports £2.5m interim business interruption insurance pay-out: Restaurant operator Various Eateries, which was established to take advantage of the disruption caused by the pandemic, has received an interim payment under its Business Interruption Insurance policy of £2.5 million. The company stated: “Whilst this payment does not entirely compensate for the loss of business over the period of the epidemic, it does support the group’s overall liquidity, which remains strong. Negotiations with its insurance company regarding additional claims and the final claim period are still continuing and further updates will be provided in due course, as appropriate. The board deplores the damage done to our previously vibrant and thriving industry, with the attendant loss of businesses, jobs and livelihoods. However, even allowing for the likely extension of lockdown and restrictive measures, the group’s growth strategy remains as previously communicated to investors – to capitalise on the opportunities emerging from the impact of the pandemic and associated restrictions. Management continues to expect the availability of prime sites and high-quality staff to provide a backdrop highly conducive to successful expansion. In line with this strategy, while the business has been closed management has been exploring a number of desirable sites for expansion across the UK. Given the lack of guidance as to when lockdown and other restrictions will be lifted, the company has so far chosen to hold off signing up to any new leases, but expects to be able to do so in the near future on terms that reflect the considerable and continuing fall in retail property values. In light of the continuing uncertainty as to when the latest lockdown may end, it is no longer possible to accurately estimate the impact on earnings and therefore the board is withdrawing its current guidance.” Chief executive Yishay Malkov said: “The management team and I have run restaurants through numerous crises and challenging external events and we have always come back stronger. While covid-19 is the biggest challenge our industry has seen, we have the team, the sites and the resources to get back on the expansion trail, just as soon as the government fires the starting gun. We applaud the rapid roll-out of the vaccine and note the government’s objective of inoculating all members of the four most vulnerable groups by 15th February 2021. Providing this is achieved, the company urges the government to help get this amazing industry, employing more than three million mainly young people, back on its feet.”
Eat Out to Help Out data shows no link to increased covid cases: Rishi Sunak has defended his Eat Out to Help Out scheme after data showed no link to rising covid cases. More than 160 million customers were given 50% off meals to tempt people back into struggling pubs and restaurants, with the scheme credited for getting 400,000 workers off furlough. Now data published by the Treasury shows areas with the high take up of the scheme also still had the low virus levels between August and October. The figures show places such as Westminster and Scarborough and North Devon had very high take-up of Eat Out to Help Out, but very low subsequent covid cases. Meanwhile Knowsley, Rochdale, Merthyr Tydfil had far higher covid rates, but lower levels of use of the scheme. The Treasury said: “These figures confirm that take-up of Eat Out to Help Out does not correlate with incidence of covid regionally – and indeed where it does the relationship is negative.” A spokesman said: “As we have done throughout the pandemic, we have worked with creativity and at pace to support individuals and businesses. We designed The Eat Out to Help Out scheme to protect two million jobs in hospitality, an industry whose employees are at high risk of long-term unemployment in the event of redundancy. It protected jobs across the UK by bringing back 400,000 people from furlough while safely restoring consumer confidence.”

The Times – our analysis suggests pubs and restaurants not able to re-open until May: The Times has claimed hospital pressure will not ease enough to allow the reopening pubs and restaurants until May if this year follows the same trajectory as last spring, according to its own analysis. The newspaper stated: “If bed occupancy by covid-19 patients declines at the same rate as last year, it will take until mid-February to reach the peak of last spring and will not fall to the level at which primary schools reopened until early April. While the speed of decline is not yet clear, experts said that the projections illustrated how long it would take to ease lockdown. They suggested that Boris Johnson’s hope of being back to normal by Easter was unlikely. Schools began opening last year from June 1, when there were 7,244 covid-19 patients in hospital, a level that will be reached on 3 April in this scenario. When the hospitality industry was allowed to resume on July 4 there were 2,800 covid-19 patients, which on last year’s trajectory would not be reached until May 5. Government sources stressed that it was too early to know what target dates would feature in the roadmap, saying it was ‘speculative’ to suggest shops might open in April followed by pubs in May. Scientific advisers have previously said that it was unlikely to be safe to open pubs until May. Paul Hunter, of the University of East Anglia, said that it was not yet clear how the decline this year in hospital pressure would compare with last year.” He told the newspaper: “I would broadly agree with this timeline. But there are a lot of variables that could push this either way.”

Wales extends lockdown for three more weeks: Wales’ first minister is to extend the country’s coronavirus lockdown for another three weeks. Mark Drakeford is also expected to confirm that primary school pupils could start returning after half-term if infection rates continue to improve. The country entered the toughest ‘level four’ rules – effectively a national lockdown with a stay-at-home order – a few days before Christmas amid high case rates, but the Welsh government has said the situation is now improving. However, officials said the lockdown needed to stay for now to ‘allow the NHS to recover’. “Rates of coronavirus across Wales have fallen below 200 cases per 100,000 people for the first time since early November,” a statement said. “And every day, thousands more people receive their first dose of the covid-19 vaccine – the latest figures show almost 11% of the population have been vaccinated.” The government said there could be a “phased and flexible return to school after 22 February if the public health situation continues to improve”. Currently schools and colleges are closed in Wales for the vast majority of pupils, but nurseries are open. Welsh authorities review the covid rules every three weeks and today’s decision to extend the lockdown was widely expected. Its chief medical officer, Dr Frank Atherton, said on Wednesday that a national easing of the rules was unlikely until at least the end of February. The reproduction – or R number – in Wales was put at 0.7- 0.9 this week.

Ditto Coffee to open fourth site, second in partnership with landlord Bruntwood Works: Following the success of its first venture at Oxford Place on Oxford Street in Manchester City Centre, Ditto Coffee is launching a second, flagship coffee shop at another Bruntwood Works’ building, Union on Albert Square. The expansion at such a challenging time for the hospitality sector is the product of an ongoing, collaborative partnership between Bruntwood Works and Ditto Coffee. Due to open in Spring 2021 Ditto Coffee, which blends coffee with the brand’s passion for new independent music, will take over the ground floor space at Union. A spokesman said: “The new Ditto concept will have an entrance opposite the Town Hall on Brazennose Street and intends to be a destination for coffee and music-lovers from all over Manchester and beyond, as well as providing an excellent food and drink option for businesses based at Union, the surrounding business district and visitors to the city. The opening embodies Bruntwood Works’ ethos to blend work and lifestyle whilst creating strong communities – something that many people are missing right now.” Ditto Coffee at Union will be the fourth Ditto Coffee in the country. Natasha Murphy, head of Operations at Ditto Coffee, said: “We’re really pleased to be sharing some positive news after an incredibly challenging year. We can’t wait to get stuck into this concept which we’ve worked hard to develop in partnership with Bruntwood Works. Our Oxford Road shop was a huge success, and we’re delighted to be extending our presence in Manchester, a natural home for us as a brand with music at its heart. Albert Square is a great neighbourhood, an area steeped in wonderful architecture and heritage – we can’t wait to bring our flagship operation to Union and to see the city centre bustling again.”

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