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Mon 22nd Feb 2021 - Propel Monday News Briefing

Story of the Day:

Luke Johnson – I would rather PM gave himself wiggle room on reopening: Serial sector investor Luke Johnson has said he would rather see prime minister Boris Johnson give himself “a lot of wiggle room” when it came to his roadmap for reopening the country. Talking on Propel Premium’s Friday Wrap series, the backer of Gail’s Bakery, All Star Lanes and Curious Drinks, said he was hopeful the government would under-promise and over-deliver on reopening the country. He said: “The ultimate card the government will play and why it says lockdown is essential is to save the NHS, so if hospitalisations collapse, and if deaths fall to very low levels, then he might say things have moved faster and better than we feared, and therefore we can open sooner. I think most businesses can open with a few days’ notice if truth be told. If there is money to be made and they have been shut down and they know there will be customers queueing up to come to drink and eat with them, and be entertained, then one way or another they will open up.” Loungers chairman Alex Reilley agreed with Johnson. On Twitter over the weekend, he said: “Any specific dates given now will have a ridiculous amount of caution baked into them.” Johnson also warned there was a “precipice coming” for the industry and he worries businesses will “struggle to get the working capital to survive”. He said: “One business I am involved in has lost so much money because it has been practically shut for a year. It is really agonising and it has set us back I would think more than two years. We have made all sorts of cuts and restructuring, reopening and welcoming customers back seems ever further away. It is hard for the people who run it, so frustrating, and hard for the owners. There is a precipice coming, where there’s all this rent owing. There is probably a great deal of money owed to HM Revenue & Customs (HMRC) that hasn’t been paid, some that has been deferred, but eventually HMRC will come calling. So, I worry as opening up happens, businesses will struggle to get the working capital to survive, and as landlords start enforcing their security and forfeiting leases, so people will have to cease to trade, and it is going to be chaos.” Alongside the Friday Wrap video series with leading sector players, Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from Propel insights editor Mark Wingett. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email

Industry News:

Mowgli operations director Lucy Worth 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, Propel insights editor Mark Wingett talks to Lucy Worth, operations director at Mowgli. The video will be released at 9am on Monday (22 February).
Properly functioning, equitable business rates system ‘now more critical than ever’, says UKHospitality as final review report is delayed: A properly functioning, equitable business rates system is “now more critical than ever”, UKHospitality has said, as it urged the government to use the extra time from the delay of its final report reviewing business rates to “ensure it gets this right”. The report will now be published in the autumn when “there is more clarity on the long-term state of the economy and the public finances”, the government said. The business rates review was announced by chancellor Rishi Sunak at last year’s Budget. A call for evidence was published in July 2020 to seek stakeholders’ views on key issues including reforming the rates multiplier and looking at alternative ways of taxing non-residential property. The call for evidence closed last year and the government is current considering responses. An interim report, which will include a summary of responses to the call for evidence, will be now be published on Tuesday, 23 March. Responding to the delay, UKHospitality chief executive Kate Nicholls said: “The business rates system as it relates to hospitality has been broken for some time. It is an antiquated system of tax that bears almost no relation to the realities of business in the 21st century. It needs addressing, so a delay in the review is obviously a disappointment. If it must be delayed, then it is absolutely vital the government uses the extra time to ensure it gets this right. After the misery of last year, a properly functioning, equitable rates system is now more critical than ever. In the meantime, there is now no reason why the business rates holiday should not be extended for another year. Extend this support, along with the VAT cut, at the Budget, then deliver a whole new rates system that no longer unfairly penalises our sector.” A government spokesman said: “At the upcoming Budget the chancellor will outline the next stages to support businesses and families across the UK. That has been the government’s priority throughout the past year and it will be the priority for the year to come.”
Bar 44 co-owner accuses chancellor of ‘misreading the room’ over Ramsay video as original site shuts after 20 years: Chancellor Rishi Sunak has been accused of “misreading the room” after releasing a video of himself discussing the challenges facing hospitality with multi-millionaire chef Gordon Ramsay. The video was released just hours after Owen Morgan, co-owner of South Wales-based Spanish bar and restaurant operator Bar 44, announced he was closing the original branch, in Cowbridge, after 20 years of operation. Morgan tweeted: “The real problems, the people with genuine lives and families and their well-being and livelihoods on the line, are they just misreading that?” Morgan said the real issues have “been completely lost” amid discussion of Ramsay’s game show, describing the video as “quite a cynical move”. He added: “Is it another instance of government just completely misreading the room again?” Sunak spoke to Ramsay as part of a series of “In Conversation” clips speaking to industry leaders and experts to inform his Plan For Jobs campaign, but his choice of Ramsay – who has 35 restaurants around the world and is one of the world’s richest chefs – has been widely criticised. In a tweet accompanying the video, Sunak said Ramsay would explain the challenges facing hospitality, as well as how he launched a television show in lockdown. Sunak's video with Ramsay was also criticised by Labour's shadow business minister Lucy Powell. She tweeted: “Words fail... I’ve nothing against Gordon Ramsay but he’s hardly been the voice of hospitality over last year. Try speaking to those on the ground – I can give you a list?” Morgan said the two-metre rule made it impossible to keep the Cowbridge branch open, which is on a first floor site, as that reduces capacity by more than 60%. With the lease ending on the property, the Bar 44 team said it wasn't the “right business decision” to renew. The Bar 44 group also operates bars in Penarth and Cardiff, restaurant Asador 44 as well as a site in Bristol.
Ireland – pubs won't reopen until middle of summer: The leader of the government in Ireland has warned pubs are unlikely to be reopened before the middle of the summer. Micheal Martin expressed concern about uncertainties surrounding new variants of coronavirus and high numbers of infections. Three cases of the potentially more infectious Brazilian mutation have been detected in Ireland. Martin said: “We don’t foresee that [reopening pubs] before the middle of the summer. What the public health authorities are saying is we stick with this until end of April, then we reflect on the situation and make decisions about the months ahead.” He also told Irish national broadcaster RTE that reopening the country would be a gradual process. He added: “There won’t be much of a change [after this phase] because the numbers are still too high. What we intend is to reopen schools gradually, it will be slow, we’ll be cautious, because we have to monitor the effect on the virus. The biggest challenge we face is new variants as they could impact the vaccines. It’s sensible to open slowly, as the vaccines are coming.”

UKHospitality welcomes early vaccination news: UKHospitality has welcomed news the UK vaccination programme is accelerating and the government expects to hit its target for vaccinating the top nine priority groups early – with all over-50s receiving vaccinations by April, and the entire UK adult population expected to have received vaccinations by July. Chief executive Kate Nicholls said: “The rollout of the vaccine is the nation’s route out of the coronavirus crisis and it is fantastic to see all the hard work from everyone involved means the target can be brought forward. This news gives even greater justification for the safe opening of the hospitality sector from the start of April, when all over-60s and younger vulnerable people will have been vaccinated. Any further delay will be a massive blow for hospitality businesses, their staff and customers. With all adults vaccinated by July, the UK public and the hospitality industry can look forward to summer trading with minimal restrictions. We urge the prime minister to set out an Easter opening plan for hospitality when he sets out his roadmap on Monday (22 February).” 
Uber loses Supreme Court battle on drivers’ rights in gig economy test: Uber has lost its battle in the Supreme Court over drivers’ rights – a decision that could have far-reaching implications for millions of people in the gig economy. Following a lengthy legal fight, the UK's highest court ruled against the firm and concluded drivers should be classed as workers, not independent third-party contractors, which means they are entitled to basic employment protections, including minimum wage and holiday pay. The victory, described by the GMB union as “historic”, paves the way for drivers to claim compensation running into thousands of pounds. It could also have future ramifications for other firms that use a similar business model, including food delivery firms. Co-lead claimant and the union's general secretary James Farrar said: “This ruling will fundamentally reorder the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery. I am delighted workers at last have some remedy because of this ruling, but the government must urgently strengthen the law so gig workers may also have access to sick pay and protection from unfair dismissal.” Responding to the judgment, Uber said: “We respect the court's decision, which focused on a small number of drivers who used the Uber app in 2016. Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury. We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”
‘Two-stage’ financial package vital for Welsh operators as sector begins to reopen, says UKHospitality Cymru: A “two-stage” financial package will be vital for Welsh operators as the sector begins to reopen next month, UKHospitality Cymru has said. Welsh first minister Mark Drakeford has confirmed from Monday, 1 March licensed wedding venues, such as visitor attractions and hotels, will be permitted to reopen to perform wedding and civil partnership ceremonies and all self-contained accommodation could be open by Easter. UKHospitality Cymru executive director David Chapman said while the remarks were “very encouraging”, any recovery would not “be an overnight process”. He added: “We look forward to continuing our close dialogue with the Welsh government to provide a sound and safe way to enable self-contained accommodation in Wales to open in time for Easter, if health conditions allow. We hope it can also pave the way for an orderly reopening of hospitality, with flexible and practical restrictions to get businesses fully open to guests as soon as possible. This will not be an overnight process, though. Trading across the serviced sectors is likely to be sub-viable for some time, so it is vital we have a two-stage financial package. We need an immediate continuation of the sector specific fund to bolster industry outlets now without help since 21 January to take them through to 31 March. That must be followed by a new financial year package including the extension of furlough, the business rates holiday and VAT cut. That provides the best protection for hospitality jobs in Wales and will help businesses survive through to the summer and beyond.”
Broker reports late-night insurer Hiscox has made first settlement offers: Late-night leisure insurance broker NDML has reported it has received the first offers of settlement for its late-night leisure clients involved in the Financial Conduct Authority (FCA) test case. NDML managing director Simon Mabb said: “This has been a very challenging situation for our clients and also the insurance industry trying to navigate this crisis but keeping the lines of communication with clients, the FCA and Hiscox open has enabled us to get these settlements finally moving.” Philip Kolvin QC, who acted pro bono, said: “A better insurance scheme needs to be found. Small businesses shut down by a pandemic should not find their survival dependent on a kafkaesque struggle in linguistics with insurance behemoths and their smart lawyers.” Night Time Industries Association chief executive Michael Kill added: “This has been a long journey that has seen many casualties, but we are pleased to finally announce the FCA Supreme Court case is starting to bear fruit for some of the hardest hit businesses during the pandemic. We still have some way to go, and will be working with the FCA over the coming weeks to feedback on actions from other insurers that present policy wording that will have been included within the case. We are continuing to ask the FCA and the Supreme Court to ensure the decision over wording has an absolute outcome, so policyholders are clear on whether they are able to claim on their business interruption Insurance.”
Guests forging ahead with hotel bookings despite ongoing lockdown uncertainty: Guests are forging ahead with hotel bookings despite the ongoing uncertainty around the end of lockdown, according to new research. Data taken from a two-week period – between 1 February and 17 February – showed room night bookings were up by 19% and a 53% increase in turnover from direct bookings. The study by hotel booking company Profitroom also suggested people are looking to get away for longer, and are happy to book more expensive packages. The average length of stay has increased by 48% year-on-year, rising from 2.1 days on average to 3.1 days. Samantha Williams, UK market owner at Profitroom, said: “This time last year, although there were fears about the emergence of coronavirus, few people anticipated the true scale of the pandemic. Consequently, people were still booking hotel stays and summer breaks with confidence.” She added: “The huge positive for hotels though, is it looks like business is already very much on the up.”
PCA to embark on research to understand tenants’ recent MRO experiences: Pubs Code adjudicator (PCA) Fiona Dickie is to embark on research to understand tenants’ recent Market Rent Only (MRO) experience. The research will look at the motivations of tenants who requested the MRO option; how they have used the process, including the impact of the proposed rent and terms and any negotiations with their pub company; and their overall experience. The PCA said it wants to capture the recent experience of tenants and the research will be aimed at those who served a MRO notice from April 2019 onwards. The outputs of this research will be published and will help inform the PCA’s work in making sure the pubs code is working effectively, the PCA said. The PCA has been working with agency Hive IT to conduct research to understand awareness of and barriers to communication and information sharing with the PCA. During this research, the PCA said it has identified the need to look further into the MRO process beyond the scope of the original project. Tenants will start to be contacted over the coming weeks and interviews are planned to take place during March. To help focus the survey effectively when speaking to tenants, the PCA has also invited those with recent experience of representing tenants in arbitrations to provide their views on the principal issues for tenants in the MRO process.
33 English independent cinemas to benefit from £5m government support: A total of 33 independent cinemas in England are to benefit from £5m of government support. The funds have been awarded by the British Film Institute (BFI) as the final applications for independent cinemas are processed ahead of the second round of the Culture Recovery Fund. BFI chief executive Ben Roberts said: “Across the country, local independent cinemas are lifelines for communities and often the only form of culture and entertainment. As well as bringing people together to enjoy the magic of the big screen, local cinemas are hubs for educational and film activities and provide thousands of jobs. The pandemic has made clear just how important local communities are and the support of the Culture Recovery Fund means many cinemas will be able to reopen and play a vital role in local economies and regeneration.” Projects at 22 heritage organisations will also receive £13.5m in targeted grants allocated by the National Lottery Heritage Fund to restart regeneration and maintenance projects that were planned before the pandemic. Culture secretary Oliver Dowden said: “From restoring Georgian lidos and Roman baths to saving local screens and synagogues, our Culture Recovery Fund is helping to save the places people can’t wait to get back to, when it is safe to do so.”
Brits willing to carry covid vaccine passports if it means pubs and restaurants can reopen sooner: Brits are willing to carry a vaccine passport if it means pubs and restaurants can reopen sooner, a poll carried out on behalf of The Sun has found. Six in ten people back the idea of introducing documents to prove they have had a jab. Ministers have been looking at plans to force families to show an immunisation certificate before they go on holiday abroad. But the vast majority of people would be happy if it went much further and it was required for entry to a pub, restaurant, theatre or sporting event. They are not put off by experts’ concerns a covid passport might discriminate against young, pregnant or those who cannot have a jab for medical reasons. Some 62% said they would be happy to carry one for all circumstances – with a further 22% willing to have one for foreign travel.
Job of the day: COREcruitment is working with an all-day dining restaurant concept that is looking to appoint a food and beverage operations manager for a new project, based in Cambridge. The position will pay up to £45,000 plus bonus and would ideally suit a multi-venue operator who really understands food and restaurants. This role will oversee the main restaurant with events space, co-working area and the lounge. Anyone interested can email with their CV.
COREcruitment is a Propel BeatTheVirus campaign member

Company News: 

Issa brothers make new bid to seize control of Caffe Nero: The billionaire brothers behind Asda are attempting to seize control of Caffe Nero with a raid on the coffee company’s £350m debt pile. Mohsin and Zuber Issa, who last week completed a £6.8bn acquisition of Britain’s third-biggest supermarket, are in talks with Alcentra and Partners Group to buy loans totalling £180m, reports The Sunday Telegraph. City sources said the “aggressive move” would leave Caffe Nero cornered if it were to default on its debts. Talks “were moving at quite a pace” and are delicately poised and there was no certainty a deal, which would be made in partnership with TDR Capital, will be agreed. Banking insiders said lenders believe after a year of lockdowns Caffe Nero could breach its covenants this summer. Ownership of the loans would position the Issas to make a bid for control through a debt-for-equity swap if Caffe Nero is then forced to restructure its borrowing. Sources close to Caffe Nero insisted the company does not expect to breach banking covenants this summer. One insider said the Issas had previously approached bank lenders including HSBC, Santander, Lloyds and Rabobank to acquire their debts but were rejected. A source close to the Issa brothers and TDR said: “The investor group would be a natural partner for Caffe Nero. We have made no secret we want to develop a solution for Caffe Nero’s problems that will work for all stakeholders.”

Taco Bell earmarks former Pizza Hut site in Lincoln for drive-thru restaurant: Mexican restaurant brand Taco Bell is lining up a site in Lincoln. Taylor Lindsey is seeking permission from the city council to convert the former Pizza Hut restaurant on land to the south east of Nettleham Road into a Taco Bell, along with a new drive-thru lane. The restaurant is expected to create almost 60 jobs, reports Insider Media. A statement submitted on behalf of the applicant said: “As well as bringing a well-known national operator to Lincoln, the proposals will lead to direct and indirect employment opportunities. Such economic benefits are considered to represent a most welcome boost at a time where the economic shocks and associated levels of unemployment resulting from the covid-19 pandemic continue to be felt and, accordingly, are considered to represent a material consideration that should be afforded significant weight by the decision maker.” Taco Bell operates more than 50 sites in the UK. The company has more than 7,500 restaurants across the globe with Glen Bell having opened the first in Downey, California, in 1962.

Native returns to London for restaurant at Browns in Mayfair: Zero-waste wild British food restaurant Native, founded by Ivan Tisdall-Downes and Imogen Davis, has returned to London to join British multi-brand luxury retailer Browns at its new flagship boutique in Mayfair. The partnership will see the launch of a restaurant centred around sustainable dining at the Brook Street site. The restaurant, due to open in the spring, will champion seasonal produce and ethical dining through a selection of sharing plates, natural wine and foraged cocktails. The menu will include dishes such as poached brill, seaweed Beurre blanc with Sutton Farm chard; and retired dairy cow ribeye, yeasted onion puree and wild mushrooms. Davis said: “We are excited to be embarking on this new chapter of Native in partnership with Browns and it’s been a delight to see our vision for a closed-loop restaurant supported at every step.” Meanwhile, Native has also launched an at-home range, including two set menus to choose from, featuring three or six courses of Native’s seasonal and signature dishes. The menu will be updated every fortnight and orders can be placed daily for delivery the following Friday, with UK-wide delivery is available. In August last year, Native relocated from London to Osea Island on the Essex coast. Native had been operating at Flat Iron Square, near London Bridge.

Leeds-based restauranteur to revive Mediterranean restaurant brand: Leeds-based restauranteur George Psarias and his family are to revive the Olive Tree Greek restaurant brand at the end of this month. They will launch a click and collect and online delivery service, running from their existing site, Giorgio’s, in Headingley. The “business within a business” aims to restore a recognised brand in the Greek food industry that promotes healthy and nutritious food, reports The Business Desk. The Olive Tree was first established in Ilkley in 1982, winning multiple awards over 35 years as well as being listed in the Good Food Guide for more than 20 consecutive years. The new click and collect service menu will be made up of a series of classic Olive Tree dishes such as moussaka and lamb kleftiko, while specially imported Greek wine will also be on offer. Current head chef at Giorgio’s, Jean-Paul Ramouche, who was part of the original Olive Tree team, is leading the kitchen on the new project.
Star Pubs & Bars kick-starts reopening plans with series of virtual operator forums: Heineken-owned Star Pubs & Bars has kick-started its reopening plans with a series of virtual forums with operators. The company is hosting the online sessions with its 130 Just Add Talent (JAT) managed operator pubs to obtain feedback on its plans. Star Pubs & Bars is preparing to streamline systems and procedures across its JAT estate – including simplifying risk assessments, reviewing supplier performance and better Wi-Fi provision, as well as revisiting its facilities management provision. To help remind customers of social distancing regulations, covid-19 safety point of sale will be refreshed and reissued to all JAT pubs once full details on opening conditions are known. Star Pubs & Bars is also introducing new training modules for operators and staff including upselling opportunities and hosting sport safely. The company will also be launching new promotional activity and a refreshed drinks menu to attract new and existing customers back into their JAT sites once it is deemed safe to do so. As with the first lockdown, Star Pubs & Bars will be sharing learnings, training videos and modules, menus, point-of-sale and customer journey templates with its leased and tenanted estate and its Heineken UK on-trade customers. Retail concepts manager Beki Davies said: “We know our pubs have the potential to have a great summer, and we want to support them to make the most of every opportunity.”
Stint strengthens advisory board: Staffing solution app Stint has strengthened its advisory board. Joining founders Sam and Sol Schlagman and their management team are Brigid Simmonds, the current chair of the Betting & Gaming Council and ex-chief executive of the British Beer and Pub Association; former Ei Group HR director Andy Holness; Fiona Ryland, chief operating officer at University College London and ex-HR director of Compass Group UK & Ireland; former WH Smith chief executive Stephen Clarke; and Dino Rocos, ex-John Lewis Partnership operations director. Stint allows businesses to bring in staff for just a couple of hours during spikes in trade, allowing the business’ core staff to focus on the revenue-generating jobs. Sam Schlagman said: “It is a privilege to be working with some of the most well-respected individuals in their respective sectors and their strategic counsel has already proved invaluable as we start to engage with more and more businesses ahead of reopening. We strongly believe Stint will revolutionise the way operators cater for busy periods post-lockdown, and in the process giving them a fighting chance of survival.”

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