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Mon 15th Feb 2021 - Propel Monday News Briefing

Story of the Day:

Sector bosses call on chancellor to back hospitality industry in 2021: More than 160 sector bosses from the UK’s leading hospitality businesses have written to the chancellor ahead of next month’s Budget. The letter – which has been signed by industry leaders including Fuller’s chief executive Simon Emeny, PizzaExpress managing director Zoe Bowley and The Restaurant Group chief executive Andy Hornby – called for decisive support to help the sector survive, rebuild and drive the economic recovery of the country as it emerges from the covid crisis. The letter, co-ordinated by UKHospitality, highlighted two key areas of government support that, the sector said, must be delivered for it to play a key role in rebuilding the economy, and to help drive investment and provide jobs. These are an extension of the 5% rate of VAT for hospitality for another year, expanded to the wider sector including on-premises alcohol sales, leisure activities and weddings; and the continuation of the business rates holiday for hospitality for the whole of 2021-22, giving businesses valuable breathing room to rebuild and address rent debt. Additionally, the letter calls on the government to provide a decisive package of fundamental support, including extension of the furlough scheme, improved loan repayment terms to increase liquidity, deferral of government-owed debt and replacement of the Job Retention Bonus. UKHospitality chief executive Kate Nicholls said: “Despite the carnage of the past 12 months, hospitality businesses are ready to pick up the pieces of a battered economy and help spearhead our economic revival. That means we need to start laying the groundwork now. We need to make sure the hospitality sector is in the best possible position to help rebuild as we done in the past. Extending and expanding the cut in VAT will play a crucial role in boosting demand and customer confidence. Our sector is labour-intensive so this will instantly result in more jobs. Removing business rates will allow businesses to repair shattered balance sheets, including tackling the rent mountain that has now hit £2bn. Lots of businesses have taken a beating and many are still only just clinging on. There is no point in the government undoing all the good work it has done in 2020 by pulling the rug from under us as we get back on our feet.”

Industry News:

Sponsored message – Stint offers trial with month of free staffing: Stint is helping hospitality businesses across the UK bounce back from the coronavirus pandemic, which has decimated the industry. The staffing solution app, which enables businesses to bring in staff for just a couple of hours during spikes in trade, is offering hospitality businesses who want to trial Stint a month of free staffing. Stint is currently partnered with hundreds of independents, as well as major players, such as Chipotle and Marriott, which have been “reaping the rewards”. Stint takes a “division of labour” approach, connecting businesses to its workforce of more than 25,000 vetted university students who take care of the basic tasks during the busy periods while the business’ core staff focus on the revenue-generating tasks. This means businesses no longer have to incur excess staffing costs during quieter times, and can maximise sales when they’re busy. Urban Tandoor, an independent restaurant in Bristol, saw an 85% increase in profitability following the first lockdown. Owner Sujith d’Almeida said: “Through Stint’s hour-by-hour model, we’ve managed to tackle the problem of how to handle our busy peak periods in trade”. There are 150 places exclusively reserved for Propel readers to take part in the trial once the current government lockdown is lifted. For more details, click here. If you have information you would like to feature in a sponsored message, email

Wagamama chief operating officer Nigel Sherwood to feature in ‘A Focus on Operations’ video: In a new series of Propel lockdown videos in conjunction with restaurant intelligence platform Yumpingo, we focus on the role of operations directors. We speak to operations directors from leading sector businesses about how their priorities have changed during the crisis, how they have adapted, the biggest challenges they have faced, how their relationships with their teams have changed, and how they see the consumer experience evolving. In the first video of the series, Ann Elliott talks to Wagamama chief operating officer Nigel Sherwood. The video will be released at 9am on Monday (15 February).

Osmond – the most likely idea to fly with government on rent is the Australian model: Serial sector investor Hugh Osmond has said the most likely idea to “fly with government” when it comes to the sector’s rent issue is the Australian model, as he warned another 40,000 hospitality venues could go bust within a few weeks of the eviction moratorium being lifted, with the loss of more than a million jobs. Osmond said: “I do not agree with the principle but the most likely idea to fly with the government in my opinion is the Australian model. Rent during the covid-affected period (and a reasonable recovery period) is set aside in direct proportion to tenant’s loss of turnover during the period; if a tenant took just 20% of normal sales over the year, then 80% of rent is set aside. This is the ‘covid rent’. Of the rent set aside, not less than half has to be forgiven completely and the other half paid off over an extended period (two years I think). However, I think I am right in saying the ‘covid rent’ can never be used as a reason to foreclose on or evict the tenant, even if not paid subsequently. There is also an arbitration clause. As I say, I think this is still somewhat unfair on the tenant but the reasons we should probably go for it are Australia essentially has the same legal system and legislation as the UK. It provides a clear, simple, certain solution that everyone can easily understand. It is easy for the government to introduce. Most importantly it has been done and it has worked.” Osmond’s comment came as The Sunday Times reported the government is set to extend the moratorium for another quarter from the end of March, and it may also introduce guidance on how landlords and their tenants should determine how bills are split. Loungers chairman Alex Reilley said: “This is a sensible move but only if the time it buys is used to put a plan in place that avoids an economic bloodbath once the moratorium does eventually end.” Jonathan Downey, founder of Hospitality Union, added: “The government needs to legislate for two things – a national turnover rent for the period the pandemic has impacted businesses and provide some support to landlords. This will mean zero rent for the long periods of zero turnover, plus a gentle build back to something like normal levels of business over the rest of 2021. If tenants have already agreed deals, then these would stand.”

St Austell boss urges PM to intervene to re-establish trust between government and sector by finding ‘more balanced way forward’: Kevin Georgel, chief executive of Cornwall-based St Austell Brewery, has urged prime minister Boris Johnson to intervene to re-establish trust between the sector and government by finding “a more balanced way forward to allow pubs to survive, recover and rebuild”. In a letter to Johnson, Georgel expressed his “deep frustration and growing sense of betrayal, resulting from our recent engagement with your government”, which has already led to a number of pub sector chief executives resigning from the forum with business ministers. He said: “We are left believing the great British pub, and our British brewing industry, is once again facing an existential threat. This time, not as a direct result of the pandemic, but as a result of this government’s actions and proposed policy making. It is now increasingly clear to us the priorities and longer-term agenda of those who seek to remove individual freedoms and control people’s lives are baring too much influence on the recovery strategy for our great country. The health lobby are moving the goalposts on a regular basis, removing any sense of hope, optimism, or confidence in the future, for businesses and individuals alike. Such is the strength of our anger, a group of chief executive – representing companies who own and operate 14,000 great British pubs and provide 380,000 British jobs – have written to [business minister] Paul Scully to resign from his forum. We must be able to open in an economically viable manner – not with ill conceived, unworkable restrictions that confuse the public, limit our financial viability and are questionable in terms of mitigating health risks. Surely off the back of your incredible success with the vaccination programme – for which I warmly congratulate you – there must be an opportunity to effectively balance the reducing risk with the need to restart the economy, allowing businesses to trade viably, albeit with some retained restrictions in the short term. We have worked collaboratively with your government before and we must do so again. However, it is clear to me and all of my peers your personal intervention is now urgently required to enable trust to be re-established, and to help us find a more balanced and sensible way forward that will enable the great British pub to survive, recover and rebuild. Our industry is rapidly losing faith and belief in your government. This will not be easily or quickly recovered, so time is of the essence.”

HMRC clears Tipjar for tipping and tronc ‘revolution’: Tipjar, the peer-to-peer tipping and tip-sharing concept, has received clearance from HM Revenue & Customs in a significant breakthrough that “paves the way for workers and hospitality companies to change the way tips and gratuities are handled in pubs, bars, restaurants and hotels”. The stamp of approval means staff can collect and pool “digital”, or cashless, tips; doing away with the need for teams, venues and companies to organise and run complex and costly “tronc” systems. It means as long as an operator hands over full control of tip management to the staff via the platform, they cannot be held responsible for tax or national insurance contributions on the tips collected and can move away from operating “tronc” systems in their business. Tipjar founder James Brown said: “We hope this clearance will encourage more companies, and their employees, to drop old fashioned ‘tronc’ systems, which are a headache to organise, costly to run and lack transparency. The complexities of the current ‘tronc’ system are well documented in the hospitality industry and can leave staff waiting months for tips, teams and customers lacking trust in the process and operators facing fines for errors in management of the system.” Simon Bocca, a board director at Tipjar, former chief operating officer at Fourth and founder of PayCaptain, added: “What the team have achieved here is game-changing for the UK hospitality industry. This is real innovation in the hospitality tech space and a hard-fought result in the face of a lot of sceptics who thought there was no alternative to a traditional ‘tronc’ system.”

Covid vaccine passports ‘under consideration’ and could be used to go to pub or restaurant: People may have to show a vaccine passport to go to a pub or restaurant, foreign secretary Dominic Raab has suggested. Proposals to introduce documents to let immunised people lead a normal life are “under consideration” he said. Whitehall has been looking at plans for vaccine passports to families to go on foreign holidays again. But this is the first time a cabinet minister has broken cover to say businesses in the UK could use them to let in or bar punters. He told LBC: “It is something that hasn’t been ruled out. But of course you have got to make it workable. The thing, when I have looked at this – whether it is on the international, domestic or local level – you have to be confident the document being presented is something you can rely on. That it is an accurate reflection of the status of the individual. I am not sure there is a fool proof answer in the way it is sometimes presented. But we will look at all the options.” Meanwhile, Raab has rejected calls from Conservative MPs to put a date on when England's lockdown measures will be eased, saying the government will be "cautious". The Covid Recovery Group (CRG) said all restrictions must be lifted by the end of April. Raab told the BBC he was “confident” in the vaccine rollout, but added: “You can't get ahead of the evidence.” The CRG has written to the prime minister to say there will be no justification for covid laws once the top nine priority groups have been vaccinated, which the government is planning to have done by May. The CRG has called for pubs and restaurants to open by Easter in a “covid-secure” and “commercially viable” way. 

UKHospitality – new GDP figures highlight damage to sector and its potential to bounce back: New GDP figures have again reiterated the economic importance of the UK’s hospitality sector, and the urgent need for it to be supported and at the heart of government’s plans for reopening, UKHospitality has said. Figures published by the Office for National Statistics (ONS) showed the UK economy shrank by 9.9% in 2020 with the output of the accommodation and foodservices sector now 51.8% lower than last year. Additional analysis from the latest UKHospitality Quarterly Tracker, produced by CGA, showed a 54% drop in sales across hospitality in 2020, equivalent to a drop of £71.8bn, making hospitality responsible for one-third of the UK economy’s annual £215bn contraction. The ONS stats also showed hospitality acted as a brake on the UK’s growth rate for the fourth quarter, dragging quarterly growth down 0.95% to 1% as sector sales fell by a third. UKHospitality chief executive Kate Nicholls said: “The figures make for bleak reading, but also serve to drive home the point about the importance of hospitality as an economic force. If we are capable of having such a hugely detrimental impact, we are just as capable of a hugely beneficial one, though. If the government gives us an extension of the VAT cut and the business rates holiday at next month’s Budget, then we will be in a much better position to help turn things around. The statistics show there is really no other option for the government than to back us totally.” A British Beer & Pub Association spokesman said: “Things cannot continue as they are. Local pubs and breweries have been burning through cash and building up debt for months, communities across the UK are fast running out of hope that their local is going to survive. Thousands of pubs and hundreds of thousands of jobs continue to hang in the balance while we wait for clarity on exactly when and how pubs reopen. If measures aren’t announced on 22 February in the government’s recovery roadmap providing the clarity our sector needs on when it can reopen, as well as support it needs to survive until then, we fear things could get even worse.”

Government meets with petitioners calling for minister for hospitality: The government has met with petitioners calling for a minister for hospitality. Further to calls from petitions committee chair Catherine McKinnell, prime minister Boris Johnson agreed for minister for small business, consumers and labour markets, Paul Scully, to discuss the issue with three members of the Seat At The Table campaign. More than 200,000 people signed the petition calling for the creation of the post, which saw it discussed in parliament. Robin Hutson, owner of the Pig hotels, was one of the three attendees, along with chef and restaurateur Angela Hartnett and publisher Claire Bosi. Hutson told the Telegraph: “We had a good exchange about the need for greater representation within government. Scully and his team were listening and there is certainly an intention to support the sector on an ongoing basis and there was agreement about raising the importance of the sector; they have offered to meet us again. Of course, the appointment of ministers rests solely with the prime minister; we have asked if he would grant us an audience personally.” During the debate McKinnell highlighted hospitality was caught between “two crowded departments” – the Department for Business, Energy and Industrial Strategy and the Department for Digital, Culture, Media & Sport – that “creates an incentive for passing the buck between departments, which reinforces the case for a minister for hospitality”. Speaking about the campaign last month, Hartnett said: “I think we need someone far more in the know. They would understand the difference between shutting down a 50-bedroom hotel and a coffee shop.”

Staycations within Scotland ‘still possible’ this summer, says public health expert: Staycations within Scotland may still be possible this summer as coronavirus restrictions ease over the coming months, a public health expert has said. Professor Linda Bauld, of the University of Edinburgh, expressed hope domestic breaks would still be possible, despite first minster Nicola Sturgeon urging Scots not to book holidays abroad and travel elsewhere in Scotland in summer remained “uncertain”. Bauld also voiced hope pubs and restaurants would open again in the next few months, and “people should be hopeful we’re not going to be stuck in this situation indefinitely”. However, she said measures such as mask wearing and social distancing are likely to continue for some time to control the virus. Speaking on BBC Radio Scotland's Good Morning Scotland programme, Bauld said: “I’m very hopeful we’ll have breaks in Scotland and be able to take advantage of our fantastic hospitality and tourism industry here, and we need to support them. I’m certainly already thinking about where I could go in a couple of months’ time, and I think if we continue to make progress we will be able to holiday, not abroad, I think because of quarantine unfortunately foreign travel is going to be off the cards for a while, but travelling around more domestically – absolutely.” On the reopening of pubs and restaurants, she suggested pubs would first reopen with access outdoors. She added: “The important thing is when we do open up, we don’t want to have to close down again and that’s why the vaccines are going to be absolutely essential.” Bauld said she expects the country will return to the levels framework of restrictions as it reopens in stages. She said that framework is based on a range of indicators and while progress was being made, the number of people in hospital needs to go down before things can change.

Scottish hospitality ‘has less than 1% infection rate among staff’: Members of the Scottish Hospitality Group (SHG), which employs more than 6,000 people, have revealed there have been only 32 positive cases of covid-19 among staff since July – an infection rate of less than 1%. Eight of those were between July and October – the period before the Scottish tier system was introduced and in which the Eat Out To Help Out scheme was in place, which allowed customers to dine and drink alcohol indoors in a safe and controlled environment. Conversely, the SHG said there have been relatively more cases among staff since the lockdown restrictions of 26 December that have prevented many businesses from operating at all. Customer infection numbers remained at a consistent level until Christmas before dropping off completely with the tighter rules. In total though, firms in the group have only been notified of 30 cases among millions of customers. Over the period from July to the end of January, staff at SHG premises have worked about 1.15 million hours, meaning there has been only one confirmed case for every 36,000 hours worked. SHG spokesman Stephen Montgomery said: “This clearly shows we’re all better off when responsible hospitality businesses can provide safer places to socialise than when getting tougher is driven to other areas, such as house visits. Our figures prove Scotland’s pubs, restaurants and hotels are part of the solution rather than being responsible for the spread of the virus. After the worst December in living memory, we have already had a tough start to 2021. In December alone, our members lost £9.6m of revenue – money that would normally keep business afloat until the spring. It’s vital the Scottish hospitality sector is well supported until we can reopen safely and play our crucial role in rebuilding the Scottish economy.”

London faces long slump, warns Shaftesbury CEO: London faces up to two more years cut off from lucrative foreign tourism as the lingering effects of the pandemic continue to deter travellers, one of the capital’s biggest landlords has warned. Brian Bickell, chief executive of West End property company Shaftesbury, told the Sunday Telegraph overseas visitors may not return in numbers before “late 2022, perhaps not until into 2023, being realistic”. The forecast is the latest signal of the crisis in the engine room of the UK economy. London’s permanent population is estimated to have fallen by 700,000 too. Shaftesbury has 850 tenants across popular tourist districts including Chinatown and Carnaby Street. Bickell said: “I’d love to be proved wrong, but the reality is it needs a lot of things to come together to give people that confidence to start travelling, and the question is whether people want to necessarily travel back to cities in the same way.” He pressed the chancellor to extend support to struggling hospitality businesses and retailers who have “nothing left in reserve”. He said: “The reality is these businesses need at least 12 months to get back on their feet. There could be bumps going into next winter – we just don’t know if there are variants of the virus knocking around or anything like that. We do need the business rates issue sorted out, short-term and long-term.”

Restaurants and hotels take out more than $18bn under revamped Paycheck Protection Programme, highest of any industry: Restaurants and hotels in the US have taken out more than $18bn in loans under the current version of the Paycheck Protection Programme (PPP) – 18% of the total lent to date. It makes the hospitality industry the leading borrower, followed by construction, at 14%. Data released by the US Small Business Administration, the administrator of the PPP, showed just under $101bn has been lent to date under the new programme, which began in mid-January. The average loan across all industries is $78,000, with about 70% of the loans amounting to less than $50,000. The snapshot of PPP activity showed the number of second-draw loans—advances made to small businesses that have previously borrowed money under the 11-month-old programme – is about three times the tally of first-time loans. About $284bn has been allocated for the programme, with Congress considering a further boost under the covid relief bill that’s currently being hammered out in the House of Representatives. Since the programme began at the start of the pandemic, about $623.4bn has been lent to businesses. As previously reported, the loans will convert into grants – provided certain requirements are met. These include spending at least 60% of the funds on payroll and maintaining their employee headcount.

Job of the day: COREcruitment is working with a hospitality and leisure business in London, which has pivoted through the pandemic and created an online offer. The business is aiming for further growth and is looking to recruit a chief finance officer (investment specialist). As well as the day-to-day running of a consumer-facing business’ finance functions, funding is a major part of this role and it would be preferable for the incoming chief finance officer to have extensive knowledge in this area. Anyone interested can email
COREcruitment is a Propel BeatTheVirus campaign member

Licensing update: Licensing solicitor John Gaunt & Partners has produced a useful monthly summary of licensing news relating to the covid-19 situation, which can be accessed here.
John Gaunt & Partners is a Propel BeatTheVirus campaign member

Company News:

Brighton Pier Group receives £1.4m business interruption insurance payout: Brighton Pier Group, which owns and trades Brighton Palace Pier, as well as 12 bars and eight indoor mini-golf sites nationwide, has reported it has received a £1.4m business interruption insurance payout. The company stated: “As announced on 2 November 2020 (together with the company's final results for the 52 weeks to 28 June 2020), the group has lodged claims with its insurers for business interruption losses arising from closures of the group's venues. The High Court judgement on 15 September 2020 found the group's ‘Marsh resilience’ insurance policies are capable of responding to covid-19 business interruption claims. Furthermore, the group's advisers have indicated the Supreme Court ruling on 15 January 2021 does not change the fundamental principle these policies can respond to claims, subject to appropriate discussion and agreement over the quantum of the arising losses and any applicable policy caps. The group has to date received from its insurers interim payments totalling £1.4m in respect of these losses. While these payments do not satisfy the entirety of the group's claims, they nevertheless support the group's overall liquidity which continues to be strong. The company will provide further updates as appropriate. The group also gives notice it intends to publish its interim accounts on Monday, 29 March 2021.” Chief executive Anne Ackord said: “While business interruption insurance is welcome, and the rollout of the vaccination programme provides a route back to normality, we are keen for the government to announce a recovery roadmap for the tourism and hospitality sectors. If businesses in the night-time economy continue to be subject to restrictions after the end of lockdown, the government needs to recognise further ongoing financial support will be required.”

Grant Thornton ‘failed to check Patisserie Valerie cash levels’: Alleged mistakes by Grant Thornton in its auditing of the failed Patisserie Valerie chain have been laid bare in a £225m court claim. The Sunday Times reported papers lodged by FRP Advisory, the liquidator, said Grant Thornton’s negligence meant directors were unaware the cafe group had run out of cash. The case against Grant Thornton centres on allegations it failed to check Patisserie Valerie’s cash position adequately – meaning it did not spot undisclosed overdrafts and accounts. The papers said Grant Thornton failed to ask why the chain received little to no interest on positive bank balances. In 2017, Patisserie Valerie earned £44,000 interest on a recorded bank balance of £22.5m – equivalent to a rate of just 0.2%. FRP also claimed Grant Thornton did not ask why charges for credit card use had fallen from £502,525 in 2014 to £355,899 three years later in a business that was supposedly growing. Patisserie Valerie, listed on AIM in 2014, had 206 cafes. At one point it was valued at more than £450m. Part of the business was sold to Causeway Capital, an Irish private equity firm, in 2019. The Serious Fraud Office is investigating the “business and accounting practices of individuals” associated with Patisserie Valerie. Six people have been arrested. The Financial Reporting Council is investigating the Grant Thornton audit. FRP is arguing the board – led by Luke Johnson – would not have paid dividends and would have halted expansion had it been aware of the cash position. Johnson has denied any knowledge of the alleged fraud. Grant Thornton said it would “rigorously defend” the claim and the case “involves sustained and collusive fraud, including widespread deception of the auditors”.

Dishoom confirms Trollip’s promotion to managing director: Indian restaurant group Dishoom has confirmed it has promoted long-term operations director to managing director of its eight-strong business. Trollip has been with the Shamil Thakrar and Kavi Thakrar-founded business for the past decade and been an integral part of the “company’s team of senior Babus”. The company said: “Brian will continue to support the founders and co-ordinate the work of the company’s senior team.” Shamil Thakrar said: “Brian has been part of the Dishoom family since 2011 and has overseen operations as we’ve grown over the past ten years. This past year has been especially challenging for all of us in the industry. Kavi and I are humbled to have had the support of such a strong and resilient team around us, and we look forward to seeing Brian carry even more weight on his very broad shoulders as we move through 2021.” Last month, Dishoom launched a delivery kitchen service in Cambridge – its second outside London.

Rarebreed Dining to launch hot food takeaway offer and at-home box delivery: Restaurant company Rarebreed Dining is launching a hot food takeaway offer along with delivery of its at-home “Dine Inn” boxes. The company created Dine Inn so customers could “enjoy the Rarebreed experience at home” on the back of having to cancel bookings for Christmas Day and Boxing Day, where more than 1,000 people had been booked in. The business put together a Christmas Box and sold almost 200, and had a similar uptake on its New Year’s Eve offer. It has since created a Valentine’s box and also did one for the Superbowl, both of which proved “extremely popular”. Now Rarebreed is adding to its “off-site” offer with hot food being made available via click and collect at three of its four sites – The Plough Inn in Cobham, The Waverley Inn in Weybridge and The Shurlock Inn near Binfield. Managing director Jordan Hallows told Propel: “Our ‘Dine Inn’ boxes have been giving us some fantastic engagement with our customer base. Now we are going to do hot food, including a Sunday roast as well. We’re also going to do our own delivery service for the boxes having put in the systems we need.” Hallows said about 100 of its 115 staff were currently on furlough and has so far not had to make any redundancies. Hallows also said the company was still keen to add a couple of sites to the portfolio this year – but would be taking a measured approach. He added: “We’ve got some catching up to do financially but we want to grow – it’s a long-term business plan we have here.”

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