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Wed 17th Feb 2021 - Propel Wednesday News Briefing

Story of the Day:

New report confirms hospitality not significant area of covid transmission: A new report on the safe reopening of hospitality, commissioned by UKHospitality from analysts CGA, showed businesses in the sector were not significant areas of covid transmission in 2020 and argued they should be central to reopening plans in 2021. According to the study the UK hospitality market saw a 54% fall in sales in 2020, equivalent to £71.8bn in sales lost versus 2019. It said hospitality was not a significant area of covid-19 transmission in 2020 and it will not be responsible for significant transmission in spring 2021 and beyond while reports linking the Eat Out To Help Out scheme to a rapid rise in covid cases “were linked to a single, discredited study”. The study added hospitality was “well placed to maintain and enforce covid-19 mitigation measures and should not be held back from reopening – it should be seen as equally high priority as non-essential retail and next in line after priority sectors such as schools”. UKHospitality chief executive Kate Nicholls said: “The result of the lockdowns and the restrictions placed on the sector last year was crippling. Business was devastated to an extent hitherto unimaginable. Many businesses are barely surviving and cannot afford another year with restrictions on the scale of 2020. Reopening has to be done correctly at the first time of asking. A barrier to that could be the incorrect assumption our businesses pose a risk to public health. We know hospitality businesses are safe and all the data has shown we are not a significant area of transmission. This report is a vindication of everything we have been saying and a forceful argument for allowing us to reopen and welcome back our customers. Hospitality can lead the economic recovery of the country. We can provide jobs to people who have lost them and host millions who are desperate for some enjoyment after a torrid year. This report showed we can do it safely, too. The government should take note and ensure it allows hospitality to reopen as soon as it is safe to do so.”

Industry News:

Sponsored message – McCain launches campaign to help operators succeed at ‘next level delivery’: McCain has launched a new campaign to help operators succeed at “next level delivery”. It provides practical tips “from expert Next Level Delivery ambassadors”, operator case studies, and advice on how to select the right range “to extend delivery zones and delight customers, leading to more profit”. Operators can also request a free product sample of the McCain delivery range to try on their menu including SureCrisp; the “game-changing fry that stays crispy for up to 20 minutes in a delivery bag”, and P!ckers; a range of cheese sides “that travel brilliantly”. McCain food service director Richard Jones said: “Businesses have had to adapt their service operations, with delivery now taking the lead on an operator’s list of priorities. This is often easier said than done! Not only does it require a whole new approach to the menu, operators need to consider products specifically designed for delivery so they can continue to delight customers. As part of our Together Let’s campaign, we’re offering practical and inspiring solutions that help operators achieve next level delivery for their business.” Visit the McCain food service solutions hub “to uncover what customers really value in delivery”, and to order your free McCain sample. If you have information you would like to feature in a sponsored message, email

The Alchemist operations director Mark Burville to feature in ‘A Focus on Operations’ video: In a new series of Propel lockdown videos in conjunction with guest experience management experts 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 latest video of the series, Mark Wingett talks to Mark Burville, operations director at The Alchemist. The video will be released at 9am on Wednesday (17 February).

‘Pragmatic’ rates support in Scotland ‘will give hard-pressed businesses breathing room to plan ahead with some more certainty’, says UKHospitality: The decision by the Scottish government to extend business rates relief and provide further financial support for the sector is a “pragmatic move that will give hard-pressed businesses breathing room to plan ahead with some more certainty”, UKHospitality has said. Scottish finance secretary Kate Forbes has confirmed a package of support including an extension of the 100% non-domestic rates relief to hospitality, retail and leisure sector businesses for the 2021-22 financial year – provided the Scottish government receives the funding already assumed from the UK Budget on 3 March. The government will also provide £50m extra for town centres through a “place-based investment” programme, now worth up to £105m; and a further £10m for tourism infrastructure in rural areas. UKHospitality Scotland executive director Willie Macleod said: “Extending the rates relief was one of the major requests of the hospitality industry in Scotland. It will provide continued support for hard-pressed businesses and give them breathing room to plan ahead with some more certainty. Businesses are beginning to look ahead to reopening, but many still needed continued support in order to survive the weeks and months ahead. Failure to provide more support would have been devastating, particularly with the pessimistic tone sounded by the first minister on the possibility of Easter and summer bookings. Our recovery will be enhanced immeasurably if the UK government extends the VAT cut for hospitality, giving businesses an even better chance of survival. It will give many employers vital support to keep jobs open and put them in a much stronger position to help lead the economic recovery of Scotland this year.” Scottish Beer & Pubs Association chief executive Emma McClarkin added: “Our industry is teetering on the precipice and we now urgently need a clear roadmap to reopening from the first minister when she unveils her framework next week – hospitality cannot be at the end of the queue.”

Tim Martin – shops do not operate under stricter covid restrictions than pubs so why should sector stay shut when non-essential retail reopens: JD Wetherspoon chairman Tim Martin has said shops do not operate under stricter covid restrictions than pubs and therefore there is no reason why the hospitality industry should stay shut when non-essential retail reopens. He also said all 37,000 of the company’s furloughed staff would be able to return to work if pubs are allowed to reopen under the same restrictions as they did in July last year. Talking on BBC Sounds Wake Up To Money programme, he said: “If you said rule of six plus the regulations on which pubs reopened on 4 July last year agreed with the health authorities, which appeared to cause no spike in the virus, we could bring everyone back to work.” Show host Sean Farrington suggested shops have been open under stricter restrictions than pubs were when they were allowed to open. Martin responded: “I don’t think anyone who’s been in a shop or pub would say shops have stricter restrictions. They haven’t. We’ve operated under track and trace systems, customers have registered with us on entry, we’ve had screens put up, people have to be seated and are not allowed at the bar. We’ve had 50 million customer visits at our pubs and not one single case of an outbreak of the virus has happened in our pubs. There’s never been any evidence provided by the government that transmissions have taken place in pubs. It’s in the home, households, factories, care homes and hospitals. Pubs opened safely on 4 July and it worked well. Now vulnerable groups have been vaccinated so, if they could open safely on 4 July then, they could open safely when shops do.” When quizzed on why the pub company is not paying staff up to 100% of their wages, he explained Wetherspoon is paying £4m on rent every week, has had to have two equity placings to stay alive and is in breach of banking covenants. He added: “We are operating at the limits of economic feasibility. It’s a question of survival as it is for the whole pub and restaurant industry.”

BBPA – open pubs fully or 60% will remain shut if only outdoor drinking is allowed in April: The British Beer & Pub Association (BBPA) has urged the government to reopen pubs fully in April, in line with non-essential retail outlets, or 29,000 sites (60% of all UK pubs) will remain closed even if outdoor drinking is permitted. The trade body was responding to speculation outdoor drinking at pubs would be allowed to take place from April and explained although about 75% of UK pubs have a beer garden or outdoor space, only 40% of pubs are likely to have a beer garden or outdoor space big enough. It said reopening with outdoor service only would mean just 17% of UK pub capacity (both indoor and outdoor) would be opened and this would “result in a loss of turnover to the sector of £1.5bn” compared with trading in normal times. Because of this, the government would need to continue grant support to all those pubs unable to open at all or that can partially open, but with vastly reduced trade. BBPA chief executive Emma McClarkin said: “Outdoors service at pubs is not the same as properly opening pubs both inside and outside, and is not commercially viable. Even if some pubs did try to open outdoors only in April, all it would take is some heavy rain and they would find it has all been for nothing. We urge the government to open pubs inside – and outside – when non-essential retail also opens. By then, the vaccine will have been rolled out to millions more and pubs can open while continuing to follow exemplary hygiene measures, world-leading standards in guidance and social distancing. Until then, the government must do all it can to support our sector until it opens to trade properly in the upcoming Budget.”

Reilley – we must stop entertaining nonsense suggested by the government and stand firm and united: Loungers chairman Alex Reilley has said the sector must stop “entertaining nonsense suggested by government” and “stand firm and united”. On hospitality reopening, Reilley tweeted: “We should be accepting nothing less than reopening sometime in April with the July 2020 restrictions plus rule of six and clear dates for the removal of all restrictions (no later than 12 weeks). We must stop debating/entertaining outside opening only, no alcohol, vaccine passports and frankly any other nonsense suggested by the government. Our trade bodies need to dig their heels in and deliver this, and the sector needs to stand firm and united. We are all one family. Hospitality.”

City of London continues to waive fee for outdoor dining licences: The City of London Corporation has agreed to continue issuing pavement licences free of charge for “suitable premises” for a further six months. Since August last year, a total of 58 applications for pavement licences have been made, with 40 granted. Some of the first of the six-month licences granted are now due to expire and therefore the City Corporation’s licencing committee has decided to waive the fee for applications. Alastair Moss, chair of the City Corporation’s planning committee, said workers and visitors are expected to return to the Square Mile “as soon as current government restrictions are eased”. He said: “Issuing these free of charge pavement licences will mean the City can once again be enjoyed by all as the weather improves.” Chairman of the City of London Corporation’s licencing committee Sophie Fernandes said: “The hospitality sector has endured very difficult times over the past few months, and we hope the continuation of al fresco dining options will give venues the flexibility they need to fully resume trading as soon as government restrictions are eased. The City is home to many treasured cafes, restaurants and pubs and this decision could be what allows them to safely, comfortably and profitably reopen. The majority of establishments that wanted to take up the offer to reinstate their pavement licences have been able to do so and it remains vitally important these outdoor dining options are retained wherever it is appropriate.”

Scotland’s tourism and hospitality sector secures £2m to provide 2,000 industry scholarships: Scotland’s tourism and hospitality sector has secured £2m of public funding to provide 2,000 industry scholarships for free. The online training courses have been described as a fillip for people who have seen their prospects badly affected by the pandemic. They also aim to improve skills in the workforce ahead of the hospitality and tourism sector reopening once coronavirus restrictions are eased. The Scottish government funding was secured following the joint efforts of the Scottish Tourism Alliance (STA) and HIT Scotland, a charity that supports up-and-coming talent through its scholarship programme. Applications for the new Tourism and Hospitality Development Programme flooded in from a range of businesses around Scotland. Part of the programme will equip people with the skills now needed in response to changes that are expected to be made in tourism and hospitality because of the pandemic. In total, 80 cohorts of 25 people from 600 businesses will begin the courses on Wednesday (17 February). Organisers said it would be the largest virtual training course to take place in Scotland. Funding had initially been secured for 950 places. However, demand was so overwhelming the STA and HIT Scotland approached Skills Development Scotland to ensure all 2,000 applicants could be accommodated. David Cochrane, chief executive of HIT (Scotland), said: “The collaboration to bring this inspirational programme to the industry has been immense and the transformational outcomes expected will give our people the skills and mental resilience to hit the ground running and positively support the recovery when it comes.”

Job of the day: COREcruitment is working with a company with a small portfolio of sites, based in London, which is looking to hire an operations manager. This fast food/grab and go-led business is looking for an expert in the sector and is paying up to £55,000. The brand will be going through growth in the next 12 months and is looking to focus on people by building a great culture as well as sales. The individual will be reporting to the operations director and be working towards a “head of” role as the brand scales up. Applicants must have experience within fast food, grab and go or fast casual, while experience within delivery would be an advantage. Anyone interested can email with their CV.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Red Oak Taverns acquires ten-strong Wells & Co package, finalising terms on £35m of new capital: Red Oak Taverns, the national pub operator founded by Aaron Brown and Mark Grunnell in 2011, has acquired a ten-strong package of leased and tenanted pubs from Bedford-based brewer and retailer Wells & Co. Red Oak Taverns said it was also finalising terms for additional capital of £35m to “take advantage of immediate investment opportunities”. The acquisition of the ten sites, which are all based in the Bedfordshire, Buckinghamshire and Northamptonshire areas, takes Red Oak’s estate to 190 pubs. The deal is the second for Red Oak since the start of the year, after it acquired three pubs from Reclamation Inns for an undisclosed sum last month. On the deal for the ten Wells & Co sites, Grunnell said: “These pubs are a mix of rural destination food venues and community pubs that are a perfect match for our business and we look forward to welcoming the tenants and their teams to Red Oak Taverns. Following this acquisition, we are finalising terms for additional capital of £35m to take advantage of immediate investment opportunities. The pandemic has in some part slowed our plans but with the additional funding and an established and focused team, we are ready to take our business through the next phase of its evolution.” Peter Wells, managing director of Wells & Co, added: “We’ve worked closely with the Red Oak team to ensure the handover is as seamless as possible and I’m confident these businesses will thrive under Red Oak. The sale enables us to focus on growing our managed sites both in the UK and France while leaving us with a quality portfolio of 170 tenanted pubs.” Wells & Co was advised by Simon Chaplin, of Christie & Co, on the sale.

Oakman fundraise closes at circa £4.4m, business overwhelmed by customer engagement: Oakman Inns, the Dermot King-led pub-restaurant operator, has raised circa £4.4m and welcomed about 300 new investors, through its latest funding round. The group’s chief investment officer Steven Kenee told Propel the 28-strong business has been overwhelmed by the success of the customer-focused fundraise and the customer engagement it generated. He also didn’t rule out reopening the funding round when the business was allowed to reopen its sites. He said: “Despite being closed and having limited touch points to engage with our customers, we've received applications for £4.4m of shares and welcomed almost 300 new investors into the Oakman family. What has been particularly pleasing is the level of engagement and the brand advocacy seen. It is great to raise the capital but the response from our consumers to the fundraise has been equally as important. They are desperate to use our sites and believe in what we are doing. This could eventually open up a new avenue of raising money for the business and bring in a lifestyle element.” Propel understands Oakman will use the new funding toward the purchase and development of its next seven sites and deliver £3m of additional Ebitda. The company has already secured five new sites and is in advanced negotiations on a further 12. The five sites, four of which are freehold, are a Beech House in Epsom, the Grand Junction in Buckingham, The Rose in Wokingham, a Beech House in Hampton Hill, and Bush Hall in Hatfield. Last month, Propel revealed Oakman had secured a former retail site in Harpenden, Hertfordshire, for another opening under its Beech House concept. The company paid £1.9m plus costs to acquire the ex-M&Co site in High Street from a private landlord. Propel revealed in December that Oakman was looking to tap into its customer base to raise further funding toward its next phase of growth, with an eventual aim of doubling the size of its existing estate by 2026.

Deliveroo on hunt for leasehold sites for new Editions kitchens: Deliveroo is seeking leasehold sites at regional locations and also in central and Greater London for its Deliveroo Editions brand. The “delivery only” kitchens will need to meet specific criteria. These include being between 3,000 and 10,000 square foot; a minimum of three metres height between the floor and ceiling; a dedicated power supply, gas and water mains supply plus foul drainage connection; unrestricted access and on-site or adjacent parking space; and a maximum one to two minutes’ walk from rider parking to dispatch. Deliveroo will pay £15,000 as a fee for all successful introductions. At the start of this year, Deliveroo said it planned to expand into circa 100 new towns and cities in 2021 across the UK as well as more than double its number of Editions sites globally.

La Nonna to open third London site, in Brixton: Fresh pasta concept La Nonna is to open its third site in London, in Brixton, Propel has learned. The concept, which is the brainchild of chefs Eduardo Wansbrough and Daniele Pino (ex-Chiltern Firehouse and Galvin), has secured a site in Brixton Market for an opening later this year. La Nonna currently operates sites in Flat Iron Square and Boxpark Shoreditch. Wansbrough and Pino also operate two sites under Spanish concept Edu, in London Bridge and Shoreditch. Will Biggart, of Torridon, which acted for La Nonna, said: “The pandemic is bringing the cream to the top and La Nonna’s addition to Brixton Market will only lead to strengthening the offer that is currently there.” Dominic Tixerant, of Bruce Gillingham Pollard, acted for the landlord on the deal.

Jollibee lines up Reading opening: Jollibee, the Philippines fast food group, has lined up a further opening in the UK, in Reading. Propel understands Jollibee is set to take over the former Artigiano Espresso & Wine Bar site in Broad Street. Meanwhile, Jollibee, which operates about 1,200 sites worldwide, selling fried chicken, spaghetti and burgers, is thought to have applied to open on the former Argos site in Newcastle city centre. Last month, the brand was granted permission to open a new site in Nottingham that will create 70 jobs. The branch will open in the city centre’s Clumber Street. The Nottingham outlet will be the brand’s fourth UK site. Late last year, the company announced it has openings planned for Edinburgh, Leeds, Cardiff and a flagship site in central London, after securing the ex-Bella Italia in Leicester Square.

Hello Oriental concept to launch in July at Circle Square development in Manchester: Pan-Asian market hall and dining venue Hello Oriental, from the Chi Yip Group that operates Chinese restaurant Ocean Treasure, is set to open at Bruntwood SciTech’s Circle Square, the new neighbourhood in Oxford Road, Manchester. Hello Oriental will incorporate dining, a market hall and live music across three floors, taking inspiration from infamous Asian dining destinations such as Bang Bang Oriental in London and 1800 Lucky in Miami and is expected to open in July. The venue’s focal point will be a market hall that will serve food such as Chinese roast meat and east Asian street food. There will also be a Chinese bakery and on-site supermarket. Hello Oriental owner Ricky Yip said: “Circle Square is the perfect place for us, a new city neighbourhood that is bringing people together and creating a really thriving community. We can’t wait to launch Hello Oriental and we’re confident our new market hall experience will be a place for food-lovers of all backgrounds to come together, socialise and enjoy the very best Chinese and Vietnamese cuisine.” Circle Square provides a 1.2 million square foot mix of co-working, collaboration space and small suites; 1,700 new homes; 100,000 square foot of retail and leisure space and two hotels.

Holiday park business makes double acquisition: Lincolnshire holiday park business Coastfields Leisure has secured a seven-figure loan to fund the acquisitions of a pub and a golf centre. The HSBC UK loan was used to help acquire the Villager Pub in Ingoldmells and the Skegness Golf Centre in Addlethorpe. Coastfields Leisure has already recruited a Skegness Golf Centre golf professional and will seek seasonal staff from the local area in the coming months. Lloyd Silvester, managing director at Coastfields Leisure, said: “Our new acquisitions are in close proximity to some of our existing parks and will enable us to further grow and strengthen our offering to customers, with both properties having the scope for further development in the future. While our parks currently remain closed in line with the government guidelines, we saw a significant increase in demand last year as people looked to holiday in the UK, and we expect this trend to continue.” 
Piper restructures senior team ahead of seventh fundraise: Sector investor Piper, which backs sector companies Turtle Bay, Hickory’s Smokehouse and Flat Iron, has restructured its senior team as it prepares to raise its seventh fund. Dan Stern, who has led the recent sale of healthier snack brand Proper and on investments such as Neom, Wattbike and The Thinking Traveller, has been promoted to partner. This follows the promotion last year of Peter Kemp-Welch to joint managing partner. Kemp-Welch has led the Piper investment team as a partner for the past seven years. Piper has also added Harry Williams to the team. Williams will be responsible for sourcing and evaluating new investment opportunities, as well as supporting the investment and due diligence process. The new structure changes follow “strong” exits from Mindful Chef, Forthglade and Proper, a successful fundraise at Bloom & Wild and the new investments in Wattbike and The Thinking Traveller. Piper’s most recent fundraise, PPE VI, closed on £125m in October 2016. Chris Curry, managing partner, said: “During an extraordinary year for everyone, we’ve been busier than ever and felt it important to continue strengthening our team for life post-covid when we anticipate an increased number of opportunities driven by the acceleration of some longer-term trends, which we have been following for a while. We are delighted to welcome Harry and promote Peter and Dan and we look forward to investing our seventh fund in the next generation of innovative consumer brands.”
Lucky Saint secures £3.5m from fundraise: Alcohol-free beer brand Lucky Saint, founded by Luke Boase, has secured £3.5m from a fundraise. The brand that launched in 2018 has shareholders that include venture capital fund JamJar and Warburtons’ chairman Jonathan Warburton. Lucky Saint said the no-alcohol beer category is set to be worth £450m by 2024 and is the biggest sub-category this year, valued at £172m. It said January 2021 saw revenue up 215% year-on-year, despite zero sales from the on-trade with retail and e-commerce sales up 610% year-on-year. Boase said: “I started out with a mission to reward those who aren’t drinking with the beer they deserve. Two years on, receiving the backing of such an esteemed group of investors is the culmination of the incredible work that our team has done to grow through such difficult times. We remain as excited as ever about the future.”
EasyHotel acquires site in Barcelona for 75-bedroom hotel, set to open at end of 2022: EasyHotel, the owner, developer, operator and franchiser of “super budget” branded hotels, has acquired a site in Barcelona for a 75-bedroom hotel that it plans to open by the end of 2022. The site, which is located in the historic Saint Andreu district, will be the group’s second owned hotel in the city after opening its first in July last year. EasyHotel chief executive Francois Bachetta said: “This acquisition builds on the success of our established owned 204-bedroom Barcelona Fira hotel. It also marks EasyHotel’s fourth project in Spain; the group operates a franchised hotel in Malaga and is set to open another franchise hotel in Madrid-Atocha in 2022. Despite the recent impact of restrictions on travel, we see significant long-term opportunity for the EasyHotel brand as we continue to expand our presence across continental Europe and look forward to announcing further developments for both our owned and franchised portfolio as the year progresses.” 
Elior UK appoints new marketing and corporate communications director: Contract caterer Elior UK has appointed Michal Seal as marketing and corporate communications director. Seal joins from UK-based travel hub foodservice company SSP Group, where she was UK & Ireland commercial director, responsible for driving commercial value including leveraging technology, developing strategic partnerships and bringing new products to market. She is a member of the Elior UK board and will be responsible for leading the marketing and communications function. Elior UK chief executive Catherine Roe said: “As we enter a new era for hospitality, we are working hard to drive transformation and develop products and services that are attractive to our both our existing and potential clients and customers. Michal’s commercial insight and experience makes her an invaluable addition to the Elior UK board.” Seal added: “I look forward to building on the excellent food credentials within the business as it renews its focus on innovation. There is huge scope to bring my commercial experience, particularly around leveraging technology in the industry, to support Elior in future proofing the business as consumer behaviour evolves.”

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