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Thu 25th Mar 2021 - Propel Thursday News Briefing

Story of the Day:

Greene King in discussions with landlords on Loch Fyne estate: Brewer and retailer Greene King has started discussions with landlords of its Loch Fyne restaurant business, ahead of making a decision whether to formally proceed with a company voluntary arrangement (CVA). It is thought any outcome will not see any jobs impacted and that it won’t impact the 11 trading sites under the brand, but the process would be about tidying up the estate and sites that have already closed. Propel understands the business is working with restructuring firm Resolve on the discussions. A spokesperson for Greene King told Propel: “Loch Fyne has been severely impacted by the covid-19 pandemic and the resulting social restrictions. As such, we have started conversations with landlords ahead of making a decision to formally proceed with a CVA, which would enable us to hand back to landlords a number of sites that are already closed and no longer needed within the Greene King estate. There are no job losses as a result of this and we are looking forward to reopening a smaller number of profitable and well-run Loch Fyne restaurants that will continue trade once restrictions ease. We are still in discussions and taking advice from an insolvency practitioner and have not yet started the formal process.” Last October, Greene King permanently closed ten of its 21 Loch Fyne restaurants. The company acquired the then 36-strong Loch Fyne business for £68m in 2007. More than two years ago, it explored its options for the business, including a possible sale, and has disposed of a number of individual Loch Fyne restaurants during the past 18 to 24 months.

Industry News:

More than 70% of Scotland-based companies added to updated multi-site operators’ database are food-led, list available exclusively to Premium subscribers on 31 March: The percentage of Scotland-based businesses added to the updated multi-site operators’ database that are food-led is 70.6%. The most comprehensive list of businesses available in the sector, which includes 278 new operators in a list comprising 1,631 companies, will be available exclusively to Premium subscribers on Wednesday, 31 March. The list will then be updated on a monthly basis, complete with a report detailing new companies and changes in the list. In a new feature this year, there is a synopsis of what each business does and significant news associated with it. Being a Propel Premium subscriber also means you will receive your morning newsletter 11 hours early, at 7pm the evening before our 6am send-out. There’s also regular video content and exclusive columns from Mark Wingett. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email to sign up.
Honest Burgers people director Chantal Wilson to feature in ‘A Focus on HR’ video: In a new series of Propel lockdown videos in conjunction with Harri, the all-in-one workforce management platform built by hospitality, for hospitality, we focus on the role of HR and people directors. We speak to HR and people directors from leading sector businesses about the biggest challenges they faced during the crisis, how each lockdown has impacted their role, keeping teams engaged and thoughts on how recruitment will evolve. In the latest video of the series, Mark Wingett talks to Chantal Wilson, people director at Honest Burgers. The video will be released at 9am on Thursday (25 March).
UKHospitality proposes business rates relief solution to help prevent future of thousands of sector venues being jeopardised: UKHospitality has calling on the Treasury to extend the period for which the uncapped 100% business rates relief applies from three to six months to help prevent the future of thousands of sector venues being jeopardised. It also proposed this move is balanced by a reduction in the level of relief for the remainder of the financial year to 50%. The trade body argued the move would support cash flow for all sizes of operation, as well as assisting those businesses that will have limited demand during the summer. The chancellor announced, in the Budget, a full business rates holiday for all hospitality businesses for the first quarter of the financial year and then two thirds off for the remainder. However, a cap of £2m on relief available to individual firms means a significant proportion of the sector will miss out on the benefits, the trade body warned. Its analysis showed almost 8,000 business venues, employing about 343,000 people will be paying full rates in July, despite Budget measures to soften the acute rates burden. A further 1,850 venues would face the same situation before the end of September. This would likely prompt businesses to look at slashing costs, such as closing unviable sites, cutting jobs or holding back investment, UKHospitality said. Chief executive Kate Nicholls said: “While the Budget was broadly positive for the hospitality sector with a range of welcome measures, the cap on business rates support really took the shine off things, by excluding so many potential recipients. The cap comes into effect just days after trading restrictions are due to be lifted and will put a major economic drag on the businesses affected and risk the jobs that they support. July is simply too early for businesses to be expected to start repaying rates after a devastating year of closure, restrictions and accumulation of debt. Hospitality stands ready to play its part in creating new jobs and boosting our communities across the country, but this policy risks strangling the recovery in its infancy. Our proposed solution can unleash greater economic activity and we urge the Treasury to follow Wales and Scotland’s lead and provide greater relief.”
PM – pubs may be able to bar customers who have not had vaccine: Prime minister Boris Johnson has said pubs may be able to bar entry to customers who have not had a covid vaccine. Johnson told senior MPs the idea of vaccine passports in pubs “may be up to the landlord”, according to The Sun. When asked if pubs would be able to ban those who haven’t had the vaccine, Johnson told the liaison committee: “I do think that the basic concept of vaccine certification should not be totally alien to us. I think that’s the kind of thing that may be up to individual publicans, it may be up to the landlord.” He added the concept of vaccine certification is a “novelty for our country” and added: “We haven’t had stuff like this before, we’ve never thought in terms of having something that you have to show to go to a pub or theatre.” British Pub Confederation chairman Greg Mulholland said: “We were very happy pubs were doing their bit to help with test and trace. But for the government to abdicate responsibility and ask pubs to make a moral judgement – it’s just not acceptable. Pubs can’t open with any sort of normality until June so, on top of having to take on extra staff to serve people at tables, the idea pubs can take on staff to act as door staff for vaccine passports is absurd.”

Night-time industry appeals to MPs to save sector: Representatives from nightlife industries, including nightclubs, supply chains and live events, have met with a cross-party group of MPs and peers to discuss the growing need to support the sector. The All-Party Parliamentary Group (APPG) for the Night Time Economy heard the experiences of individuals working in the sector and those battling continued financial hardship and uncertainty. After the launch of an inquiry report last month, the group of cross-party MPs and peers met again to debate the “damning” findings of their investigation into UK nightlife and discuss vital next steps for the industry following prime minister Boris Johnson’s reopening roadmap and the Budget announcement. The group was joined by several representatives of the night-time economy, including freelancers, the Night Time Industries Association (NTIA) and #WeMakeEvents, a campaign group of the live events supply chain. The MPs were warned likely shortages in the availability of door security staff and gaps in support for self-employed workers may undermine the indicative dates set for the sector’s eventual reopening. Lacking the right financial support, insurance provision and a stable supply line, the APPG found nightlife businesses may be unable to operate in the summer, even if health and safety conditions allow them to do so. NTIA chief executive Michael Kill said: “Many people’s minds are on spring and the easing of lockdown. But in our sector, we are still in the darkest of days and our need for extra support is now greater than ever. The majority of our businesses and our people have been running on empty for a year. They have nothing left except debt and the fear of losing their livelihoods. We need extra support and we need it now.”
BBPA heaps pressure on energy sector over refusal to supply pubs: The British Beer & Pub Association (BBPA) has called out the energy sector, which the trade body said is refusing to supply many pubs with energy. It claimed a number of pubs across the UK had experienced poor commercial behaviour whereby some utility companies were refusing to renew contracts or simply to supply energy to them, even where such supply includes domestic use. The BBPA also said where new contracts are being negotiated, they typically remain subject to punitive, out-of-contract rates with renegotiations lasting for weeks or months. The trade body said the actions of these energy suppliers means they are failing in their obligations established under Ofgem, the energy regulator. Following a meeting offered to the trade body by Ofgem, the BBPA said while it was pleased the regulator has agreed to further investigate the issues reported, it remained concerned. The BBPA is urging Ofgem and energy suppliers to work with the beer and pub sector to find a long-term solution to bring confidence back to supplying the sector. The BBPA is also urging publicans to share examples of unfair practices directly with Ofgem. BBPA chief executive Emma McClarkin said: “Publicans have already suffered enough through this pandemic. The last thing they need is energy companies refusing to supply them or renew contracts. It’s time for energy companies to show support for the sector through fair dealing.”
Fewer sector workers would recommend hospitality as a career, 72% say mental health has suffered over past year: More than seven in ten sector workers (73%) would recommend hospitality as a career, however, this figure is down from 81% in 2019, impacted by reduced job security, lack of governmental support and the industry having to shut down due to covid-19, according to new research. The third annual Code Hospitality Happiness in Hospitality report, which includes responses from more than 600 hospitality workers, also found the gender pay gap has narrowed to 9%, but 72% of respondents said their mental health had suffered in the past 12 months. The gender pay gap across the Code community (focused on the mid-to-high-end independent sector) decreased from 14% in 2019 to 9% in 2020, better than the average gender pay gap in the UK of 15.5%. Survey respondents had a median salary of £34,750, well above the national average of £31,461. However, the pay gap worsened for back-of-house roles, where it stands at 17%. The survey also found that while there are almost twice as many women in head office roles than men, the men who are in head office roles are more likely to earn more. There was also a 9% ethnic wage gap among respondents, which the report said was “indicative of the work to be done when it comes to pay transparency and equality”. The survey also found staff retention has improved with 45% of back-of-house staff having been with their current employer for more than two years (up from 34% in 2019 and 31% in 2018), yet the median number of years spent with the same employer remains low at 1.8 years, suggesting staff turnover continues to be a problem. Three quarters of those taking part in the survey thought Black Lives Matter brought awareness to inequalities to the industry and while 72% felt their mental health had suffered, the majority felt comfortable asking their employer for help. 

£25m Scottish tourism recovery programme welcomed by UKHospitality: A new £25m tourism recovery plan announced by the Scottish government has been welcomed by UKHospitality. The plan involves introducing a holiday voucher scheme to create a more socially sustainable and inclusive tourism industry; an incentive scheme to support areas such as attractions, tours, activities and experiences; a talent development and leadership programme for tourism and hospitality staff; a “Net Zero Pathway” to make Scotland’s tourism industry greener and more sustainable; and a marketing fund to support organisations to promote their destination or sector when domestic travel is able to resume. UKHospitality Scotland executive director Willie Macleod said: “This good news for the tourism and hospitality sectors and represents a welcome step on the pathway to recovery. Consumer confidence is going to be key to the recovery of the hospitality and tourism sectors. After such a long time in hibernation and in the wake of such a catastrophe, customers might, understandably, be hesitant to get back out to venues and book holidays. As hospitality venues begin to reopen and as the tourism sector begins to reawaken, we need to be sending the message that we are open for businesses. The Scottish government’s incentive scheme could play a significant role in tempting our customers back into our businesses. Letting customers know we are open, safe and ready to welcome them back again will be key to a quick start.”

Conservative MPs urge chancellor to cut tax on draught beer: Chancellor Rishi Sunak is coming under pressure from senior Conservative MPs to slash tax on draught beer to help pubs and restaurants recover from covid closures. More than 70 Conservatives, including three former cabinet ministers, have signed a letter calling on Sunak to “save our locals” with a duty cut for pints pulled from a cask, reports the Evening Standard. It comes as the chancellor is considering his official response to the Alcohol Duty Review, a major rethink of the way the Treasury charges duty on beer, lager, wine and spirits. The MPs said a price cut for draught ale and lager would give “a huge boost” to the job-creating hospitality sector – and help it to compete against supermarkets that are making fortunes from sales while the pubs are locked down. It would also benefit mainly British brewers – because 98% of pulled pints are crafted domestically – and help beat covid-19 by encouraging socialising in premises that enforce social distancing, rather than gardens or homes, the MPs said. Former Conservative leader Iain Duncan Smith, ex-work and pensions secretary Esther McVey and former culture secretary Karen Bradley are among 61 signatories to the letter. Nine MPs backed it anonymously. A Treasury spokesman said: “In this month’s Budget, we froze beer duty for the fourth year straight. We’ve also supported pubs since the start of the outbreak through tax cuts, furlough, grants and other support schemes – and we’ll continue to do so.”
CMA provisionally blocks £140m merger between Crowdcube and Seedrs: The Competition and Markets Authority (CMA) has provisionally blocked the planned £140m merger between Crowdcube and Seedrs over concerns it would lead to less choice and higher fees. The two crowdfunding platforms announced plans to merge in October, saying the deal would create one of the world’s largest private equity marketplaces. But following an in-depth investigation, the CMA found the tie-up would result in a substantial lessening of competition. The watchdog said the combined company would have at least a 90% share of the crowdfunding market, which it argued could result in UK small and medium-sized enterprises and investors losing out as a result of higher fees and less innovation. “We have, therefore, reached the view blocking this merger is likely to be the best way to maintain competition,” said Kirstin Baker, chair of the CMA inquiry group. The initial decision comes despite warnings from the two companies they could face collapse if the deal does not go ahead. Seedrs said it was “deeply disappointed” in the CMA’s decision and argued the merger would have a “highly positive outcome” for British small businesses. But it insisted it was in a strong position to continue as a stand-alone business if necessary, pointing to a doubling of revenue year-on-year in the first quarter. Crowdcube added: “We’re obviously disappointed with the CMA’s decision, however, Crowdcube recorded outstanding levels of growth in the last 12 months and remains in a very strong financial position following record revenue in 2020 and two consecutive quarters of profitability.” The CMA has now launched a consultation on its provisional finding and is inviting views by Wednesday, 14 April.

Job of the day: COREcruitment is working with a charity that is looking to secure some talented, creative and transformational non-executive leadership for the organisation. It is looking for individuals who are interested in working with the LGBT+ community and someone who has a strong understanding of the challenges the community faces. This role is based in London and involves liaison with various government and commercial organisations. It is looking for an individual that has experience at board level within a large commercial/third sector organisation. As well as external relations, they will also be involved in all areas of motivating a large team of volunteers across a large structure. The role is expected to take up between four and eight hours per week – mostly evenings and weekends. Anyone interested can email 
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Zambrero – Australia’s largest Mexican food franchise to launch in the UK: Zambrero, Australia’s largest Mexican quick-service franchise with more than 200 restaurants globally, is to launch in the UK, Propel has learned. Founded in 2005 by then-medical student Dr Sam Prince, Zambrero offers a fresh, modern interpretation of classic Mexican food. Through its humanitarian initiative, Plate4Plate, Zambrero is also tackling world hunger by donating a meal to someone in need for every burrito or bowl purchased. Since the inception of Plate4Plate, more than 46 million meals have been donated so far by Zambrero’s network of restaurants in Australia, Ireland, New Zealand and the US. Zambrero’s expansion into the UK marks the next phase in its goal to donate one billion meals. Led in the UK by chief executive Emily Teh, Zambrero is understood to have lined up a site in London’s Kentish Town for its debut opening here.
Stonegate support for Ei Publican Partnerships to continue to June: Stonegate Pub Company has announced it will continue its support for Ei Publican Partnership publicans with rent and trade credits throughout April, May and June. The support builds on the financial assistance given to publicans in the form of significantly reduced rents and trade credits, together with government grants including the restart grants of between £8,000 and £18,000 as pubs prepare to reopen. Tied publicans operating substantive agreements in England, will receive rent and trade credits until June, maintaining rent credits of up to 90% prior to outdoor areas opening on 12 April. After that, Stonegate will provide trade credits equivalent to 100% of the value of the rent until 16 May. Trade credits will continue at 75% of the value of the rent until 20 June. In addition, publicans will further benefit from special promotional pricing on wines, spirits and minerals. For publicans in Wales, existing rent credits of up to 90% are being maintained, pending confirmation from the Welsh government on the reopening timetable.

Former Jamie Oliver staff members win £500,000 compensation pay-out: Former staff members at Jamie Oliver’s restaurant group have won a £500,000 pay-out in compensation after his restaurant company collapsed. Oliver was forced to close his chain of Jamie’s Italian restaurants in 2019, and he appointed KPMG as administrators. As a result 1,000 members of staff were left out of work and creditors faced an £83m loss. Now 196 members of former restaurant staff have won a tribunal claim after the company was found to have fallen short of the Trade Union Act, which requires employers to consult with employees before any closure, reports The Mirror. As staff members were not consulted, it was found the act had been breached. However, the company administrators cannot afford to pay the compensation out of the administration meaning the cost will fall to taxpayers. The compensation will be paid to employees by the Redundancy Payments Service (RPS), which is part of the Insolvency Service, a government agency. The RPS can then make a claim against the companies in administration. Oliver paid about £1m himself to make sure staff were paid until his businesses fell into administration. He previously described the fall of his empire as “very, very painful”. It was revealed in October 2019, he had paid himself £5.2m months before the collapse.
Five Guys secures former YO! and PizzaExpress sites for 2021 pipeline: Five Guys UK, the fast-growing burger concept backed by Sir Charles Dunstone, has secured two further sites in Glasgow and Walthamstow for its 2021 openings pipeline, Propel has learned. The circa 100-strong brand has secured the former YO! Sushi in Glasgow Fort scheme and the ex-PizzaExpress in Walthamstow High Street. Earlier this week, Five Guys UK chief executive John Eckbert said the brand was going to open up to 50 new sites in Europe this year, including up to 25 here. The company has further openings lined up in Chichester, Stevenage Leisure Park, McArthurGlen Designer Outlet West Midlands, Brixton and Edinburgh St James for later this year. Propel understands the group has also lined up a further opening in Manchester, on the site of the Yorkshire Building Society in the city’s Piccadilly area. 
M&B suffers shareholder revolt over pay plans and chairman’s election: Mitchells & Butlers (M&B) suffered a shareholder revolt as a fifth of investors voted against the company’s pay plans. Meanwhile, a quarter opposed the re-election of chairman Bob Ivell. The group revealed 17.5% of investor votes at its annual general meeting on Wednesday (24 March) were made against its remuneration policy. While the policy was approved, with 82.5% of investor votes cast in favour, a further 62,000 withheld votes also failing to back the plans. M&B also revealed significant votes made against the re-election of a number of its directors, including chairman Bob Ivell. He has held the role since 2011, much longer than the nine-year cap recommended under the UK Corporate Governance Code. M&B stated: “The UK Corporate Governance Code contains best practice recommendations in relation to corporate governance yet acknowledges that, in individual cases, these will not all necessarily be appropriate for particular companies. Accordingly, the code specifically recognises the concept of ‘comply or explain’ in relation to divergences from the code and the company has explained the circumstances of these appointments in detail in its 2020 annual report.”

Chopstix expands partnership with Welcome Break with second hybrid unit opening: Chopstix, the pan-Asian quick service restaurant concept, has expanded its partnership with roadside services provider Welcome Break, with the opening of a second hybrid unit near Sheffield. Launched at Woodall North Services, just outside of Sheffield, the second hybrid unit with franchisee Welcome Break, brings the total of Chopstix franchise stores up to 20. Maximising space by putting Welcome Break’s own breakfast brand “The Good Breakfast” in the mornings until noon, the unit switches after breakfast to Chopstix. The switch is achieved, in part, through the use of digital LED signage. The two companies launched the first hybrid unit earlier this year at the Fleet North Services. A third hybrid unit will open at Cardiff Gate Services this May. Chopstix managing director Jon Lake said: “We are delighted to have been able to work with our partners at Welcome Break over the past year to innovate and create this hybrid concept. We feel this is a real game-changer for them and, potentially, other partners to utilise technology and design to maximise the trading day while retaining the integrity of the Chopstix brand.” Welcome Break commercial director Martyn Brett-Lee added: “With many more customers visiting our locations over the coming months, we are pleased to expand our partnership with Chopstix. Our hybrid solution allows us to offer more customer choice in an innovative way.”
New World Trading Company to open in Plymouth: Graphite Capital-backed pub restaurant group The New World Trading Company (NWTC) is to open a site in Plymouth, Devon, Propel has learned. The company is set to take over the former Las Iguanas site in the city’s Royal William Yard scheme. It is thought the site will become the second to open under the group’s Club House format. The business already operates a Club House site in Liverpool. In November, the company secured a site in the Northgate development in Chester for an opening under its The Florist brand. Due to open in spring 2022, construction of the long-awaited Northgate cultural and leisure development began in July last year. The Florist is part of NWTC’s portfolio of 29 restaurants, which includes The Botanist, The Club House and The Oast House brands. Last October, Propel revealed the company was set to double its presence in Sheffield, with the opening of a site under its The Trading House concept in the city. The Jesper Friis-led business has secured a site in Charter Row as part of the Heart of the City 2 development. It is thought this site will open under the name The Furnace. The company is also understood to be in talks on sites in Ipswich and Cardiff. 
Barworks to open bar and restaurant within Montcalm hotel: Central London bar and pub operator Barworks is to open a new bar and restaurant in the rebranded Montcalm East hotel (formerly the M by Montcalm) in Hoxton. Called Moor & Mead, the new venue’s name is rooted in the history of the area, blending the Moor from local institutions such as Moorfields Eye Hospital with the Mead as a nod to its breweries. The link-up with the hotel, which is operated by Marriott International, is a first of its kind partnership for the Marc Francis-Baum-led group, which operates 13 pubs/bars plus Mare Street Market and four sites under The Diner name in the capital.

PizzaExpress announces two-year exclusivity partnership with Deliveroo: PizzaExpress has renewed its partnership with Deliveroo with a two-year exclusive deal across UK and Ireland, as well as new marketing initiatives. PizzaExpress first partnered with Deliveroo in 2016, and customers are now able to order from its pizzerias on Deliveroo in 105 UK towns and cities. In total, under the new partnership, 290 PizzaExpress restaurants will be available on Deliveroo. PizzaExpress is also adopting Deliveroo’s new “Signature” service to enable customers to order delivery directly via the PizzaExpress website and social channels. PizzaExpress managing director Zoe Bowley said: “Over the past year, in particular, thousands of new customers have discovered the delight of having our pizzas delivered to their door. The early results of our new partnership are already evident with the past two weeks producing our highest ever sales weeks with Deliveroo.”

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