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Morning Briefing for pub, restaurant and food wervice operators

Tue 13th Apr 2021 - Update: Covid passports, Just Eat, Deliveroo, BrewDog, Revolution Bars Group
Pubs and restaurants fear covid passports would cut profits by a quarter: Businesses fear that covid passports would slash pub and restaurant profits by a quarter, according to a new survey. According to The Telegraph, a survey of members by the trade body UKHospitality saw 110 pubs, restaurants and hotels both small and large respond. The firms which replied were not named, but together have 8,400 UK venues. They were asked about covid status certification, which would see people asked to show proof of a vaccine, negative test or likely natural immunity with antibodies. The government is exploring how the scheme could work for large events such as football matches and has kept open its potential use for pubs and restaurants. Businesses that responded to the survey predicted that costs would be around 16% higher than normal times if they had to carry out covid status checks. That was in part because an estimated two staff members would have to work full time on checking credentials at the door – something currently not conducted by many premises. The firms also predicted that revenues could be around 9% lower than normal times with covid checks, given that some people would be turned away if they forgot their proof while others could refuse to attend. It means scores of pubs and restaurants would be braced for profits around a quarter below what they would normally expect. While the results are based on business owner estimates, they reflect fears that covid checks – even if coupled with easing of social distancing rules – would not result in a full financial bounceback for pubs. Kate Nicholls, chief executive of UKHospitality, which is seeking the full lifting of social distancing rules on 21 June, said: “This would be a big imposition. It is not as if routinely these venues will have door supervisors. Attendance at pubs, bars, restaurants, hotels, nightclubs is often a spontaneous act. It is not always pre-planned. It is very different from planning to go to a football event or concert or big conference, when you are used to checks before entry.” The survey also showed that 53% of business respondents predicted that the use of covid status checks would trigger “conflict between customers and staff” and 30% said it would result in “accusations of discrimination”.

Premium subscribers to receive monthly update to multi-site database on 30 April including report detailing changes: Premium subscribers will exclusively receive the monthly update to the multi-site database on Friday, 30 April, at midday. The exhaustive database of businesses comprised 1,628 companies that oversee 56,034 sites when it was issued to subscribers at the end of March. Alongside the database will be a report detailing the new companies and highlighting the changes seen in the multi-site universe over the past month. The go-to database has the most comprehensive multi-site operator information in the sector – it provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different, and what each business specialises in. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. Premium subscribers already receive access to Propel’s library of lockdown videos and Friday Wrap interviews and will also receive a curated video library of sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel insights editor Mark Wingett. Email to sign up.

Just Eat Q1 orders grew 79% to 200 million; UK fastest-growing segment: Just Eat this morning announced that its quarterly order growth accelerated for the fourth consecutive quarter. The company processed 200 million orders in the first quarter of 2021, representing a 79% increase compared with the same period of 2020. Gross Merchandise Value (GMV) amounted to €4.5 billion in the first quarter of 2021, up 89% on a constant currency basis compared with the first quarter of 2020. The group said that the UK was its fastest-growing segment and main growth driver. Just Eat UK processed 64 million Orders in the first quarter of 2021, up 96% compared with the same period of 2020. New partnerships were signed with household brands such as Leon, Tortilla and Chipotle, as well as coffee chains Starbucks and Costa. Delivery order growth was 695% in the first quarter of 2021 compared with the first quarter of 2020, which it said was “multiple times faster than the growth rate of its UK competitors”. In London, Just Eat achieved triple digit Order growth. Jitse Groen, chief executive of Just Eat, said: “The first quarter of 2021 marks our fourth consecutive quarter of order growth acceleration. Our fastest growing segment was the United Kingdom, and we are especially pleased with the roll-out of our UK Delivery network, which has reached an impressive 695% order growth rate year-on-year. We are also very proud of the acceleration in two of our highly profitable markets, with 77% order growth in Germany and 53% in the Netherlands. Just Eat is in excellent shape and the start of 2021 has been very strong.” The company said that marketplace and delivery contributed almost equally to order growth. Just Eat said: “Marketplace Orders are highly profitable, while the Delivery Orders are priced very competitively following the company’s price leadership strategy, allowing for future adjusted Ebitda gains.” The roll-out of the company’s employed delivery model – Scoober -accelerated throughout Europe, including expanded London coverage and Birmingham roll-out in the UK, and expansion to Lyon, Bordeaux and Toulouse in France. In Italy, Just Eat said it was the first food delivery company to sign a Collective Bargaining Agreement with the largest unions for the employment of its couriers. To capitalise on the strong momentum from its investment programme, the company said it would “continue to invest heavily and prioritise market share over adjusted Ebitda”. As stated in the FY 2020 results press release, management expects further order growth acceleration for 2021 compared with 2020.

Deliveroo downer leaves BrewDog open to US float: BrewDog co-founder James Watt has said that work for the Scottish brewer and bar operator’s mooted stock market listing has picked up pace and advisers at Rothschild are meeting with banks. After Deliveroo’s IPO flop, however, he admitted to The Telegraph that the firm could list in the US. “I don’t think Deliveroo helped anyone looking to list.” He added there is a “strong preference” for it to become public in the UK. When covid hit, pubs closed and demand collapsed, Watt thought that 14 years of work were about to be undone. He said: “I honestly didn’t know if we would make it as a company. I thought the company was going to go and people would lose their jobs.” Watt’s mood became so bleak that he broke down addressing his staff. “I did that in front of everyone, which isn’t my proudest moment as a chief executive of this business,” he said. “It almost felt like back to being a start-up again, from high highs to low lows.” A year on, and his outspoken beer empire is on firmer ground. The retail division is still losing £2m a month, but the group is breaking even, Watt says. BrewDog sold significantly more of its Punk IPA cans through supermarkets and online to make up for lost sales in pubs, with revenues up 10pc to £238m in 2020 from the previous year. Three new bars opened on Monday in Exeter, Plymouth and Ealing. Watt said: “We’re having the strongest growth period as a business at the moment. We’ve had to invest significantly in additional capacity just to keep up with demand, we’ve got some good momentum.” Watts and co-founder Martin Dickie still own 44% of the company, with around 22% owned by more than 200,000 beer aficionados who have bought shares in the company via several crowdfunding campaigns. BrewDog raised £100m from American private equity firm TSG Consumer Partners three years ago, in a deal valuing the brewer at £1bn. Its latest crowdfunding effort, so-called Equity for Punks Tomorrow, has already raised £22m. It might be the last, too, as the firm prepares for a stock market listing.

Revolution Bars Group ready to trial two new concepts: Revolution Bars Group has begun trading from 20 bars from yesterday with the remainder open from 17 May – and has two new concepts ready to trial once trading conditions allow. The company stated: “We have taken advantage of the reduced trade periods to fine tune our brands and strengthen the engagement of our teams. We are ready to take advantage of the reduced competition and bring to life our freshly developed new concepts to the market. Our young guest base is keen to start living again, and we cannot wait to welcome back our guests and teams to create the fun and memorable experience that they know and love us for.” This month, NatWest agreed to waive £2.0 million of amortisation scheduled for September 2021 and approved a further £3.5 million CLBILS, taking total available facilities to £40.3 million. The company reported tickets for summer events selling out in as quick as nine minutes of release, with long waiting lists for some events. Destination cities such as Liverpool, Brighton and Newcastle-upon-Tyne, are fully booked throughout July 2021 for Cocktail Masterclasses. It stated that 11,969 guests booked with us in the first week we reopened the booking system for 17 May 2021 onwards. Total cash rental savings have bee agreed across the estate since the start of covid-19 of £5.7 million. Chief executive Rob Pitcher said: “Prior to the pandemic the business was outperforming our peer group. This year has provided us with the opportunity to advance the business across multiple areas which will allow us to maximise our future performance and capitalise on growth opportunities as we move towards more normalised conditions. With the vaccination programme running ahead of the government’s expectation and all the covid-19 related health data exceeding even the most optimistic of forecasts, I look forward to all restrictions on personal freedoms falling away on the 21st of June and urge the Prime Minister to follow the data, not dates, and bring our ‘national day of freedom’ forward in line with the vastly better outcomes that have been achieved. We are excited and ready to bounce back and as we move on from the pandemic, I look forward to our brilliant teams being able to create amazing memories for our guests as we open our bars and all come back together to celebrate life and each other.”

Pubs and bars face being punished for covid rule-busting queues: Pubs and bars face fines or the removal of their licences over queues on the street after officials threatened to crack down on the most popular venues as they reopened on Monday, reports The Telegraph. Scores of people queued outside pubs around the country as they reopened for business in line with the second step of lockdown easing. Preliminary figures suggest footfall on British high streets rose by more than 140%, with hospitality venues and hairdressers reporting that they are fully booked for weeks. But industry leaders warned against overzealous enforcement of social distancing rules after councils threatened pubs with fines and closure if too many people queue outside on the street. Emma McClarkin, the chief executive of the British Beer and Pubs Association, called on ministers and councils to “show some pragmatism” in the face of huge demand from customers. “We hope that all councils will approach the guidance in the spirit of assisting us to find a way to open, and open safely, not finding ways to use it to shut us down,” she said. The concerns about queues and beer gardens came as scientists predicted that outdoor mixing will have a “relatively modest” impact on the spread of covid in the UK in the next month. Dr Adam Kucharski, a member of the Spi-M modelling group, which advises the government, said a rise in hospitalisations was likely only if people began mixing indoors. A government spokesman said: “We recognise the huge efforts made by pubs and restaurants to be able to reopen for customers safely today, including helping to ensure that people queueing for their premises do so safely.”

Chesser – Yesterday was an enjoyable first step in the right direction, but no more than that: Clive Chesser, chief executive of Punch Pubs & Co has told Propel that yesterday’s reopening of the sector for outdoor drinking and dining was an “enjoyable first step in the right direction, but no more than that”. He said: “After another period of enforced closure, it was wonderful to see our outdoor areas in England bustling with excited guests again on Monday. The positive spirit of our Publicans shone through in pubs right across the country. However, we must not lose sight of the fact that even our pubs that are now partially open (70%) will not be able to trade at a break-even level due to their severely limited capacity, not to mention the unpredictable English weather. It is critical that capacity limitations along with coronavirus restrictions fall away completely from 21 June in line with the roadmap. The data shows that we are on track to achieve this and the government must not deviate from this path. Only a full release of all restrictions will enable businesses to truly start out on the long road to recovery. Yesterday was an enjoyable first step in the right direction, but no more than that.”

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