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Morning Briefing for pub, restaurant and food wervice operators

Tue 17th Aug 2021 - Fulham Shore – we have identified 150 new sites for our medium term plan
Fulham Shore – we have identified 150 new sites for our medium term plan: Franco Manca operator Fulham Shore has identified 150 sites for its medium term plans – and has 12 sites in legals. It also reported a big disparity in performance between regional and suburban sites and central London venues – some sites outside major conurbations are 30% ahead of 2019 figures. Meanwhile, the company reported revenue decreased 41.3% to £40.3m (2020: £68.6m) in the year ended 28 March, driven by trading restrictions implemented by the UK  government due to the covid-19 pandemic, which were in place throughout most of the financial year. It had a loss before tax of £7.5m (2020: £0.8m). Two new Franco Manca pizzeria and one new The Real Greek restaurant opened during the year ended 28 March 2021 in the UK (2020: seven Franco Manca pizzeria and two The Real Greek restaurants). As of August 2021, all of Fulham Shore’s 74 restaurants were fully open and trading, supported by additional safety precautions and training for restaurant staff across both brands. Two new Franco Manca pizzeria opened in High Holborn, London and in Glasgow, totalling 55 Franco Manca and 19 The Real Greek operated by the group in the UK. One new The Real Greek is under construction in Norwich and one lease contract has been exchanged for Franco Manca in Baker Street, London. A further 12 sites are in solicitors’ hands to strengthen the group’s opening pipeline. It also announced the creation of new team to explore and progress the international development of both businesses. David Page, executive chairman at The Fulham Shore, said: “During an unprecedented year, we are pleased to have navigated through the very challenging trading conditions to deliver this good performance. This is testament to the popularity and relevance of our Franco Manca and The Real Greek brands, the adaptability of our propositions, and the agility of our teams who I would like to take this opportunity to thank for their hard work and commitment during the year. Since the beginning of the current financial year commencing 29 March 2021, The group has continued to trade profitably and ahead of management expectations, driven by strong performances across our suburban restaurants. We have also added a further two Franco Manca pizzeria to our estate, taking the total number of restaurants to 74. From July 2021 all restaurants have been open and operating without restrictions, welcoming increasing numbers of customers as the UK’s vaccination programme progresses. Momentum has also been maintained across our take away and delivery channels, which continue to outperform 2019 levels. In line with our long-term expansion strategy we have developed a strong pipeline of new locations, supported by favourable rental terms and the group’s strong cash position. We plan to open ten locations during the current financial year and have identified more than 150 additional sites in line with our medium-term plans. Having navigated the impact of the covid-19 pandemic, the group is well-positioned to capitalise on emerging opportunities. We are confident that this current financial year will be the start of another exciting period of growth for The Fulham Shore.” Of current performance the company added: “Total group revenues for the eight weeks from 21 June 2021 to 15 August 2021 averaged over £1.5m per week. This performance represents an increase of over 8% in revenues compared to the equivalent period in 2019 calendar year. This includes a period where dine in and capacity restrictions were in place until 19 July 2021 and a continued subdued performance by our restaurants in the West End of London and other city centre restaurants around the UK. Our restaurants in these locations are not yet performing at the levels seen during the 2019 calendar year as office workers and tourists have yet to return. Our city centre restaurants are, however, being loyally supported by the geographical spread of our restaurants across the UK. The disparity of performance between these city centre locations and our other restaurants is stark. The group’s 17 West End of London and city centre office locations saw revenues down 41% on a two year like for like basis for the 8 weeks from 21 June 2021 to 15 August 2021. We believe revenues will recover in the medium term as tourism recovers and the move back to offices recommences after the summer. For the same reason, some of the group’s restaurant locations outside the major conurbations are over 30% ahead of 2019 figures because of the UK  government’s working from home requirement and the rise in coastal town staycations due to restrictions on international travel. Some of our regional and suburban restaurants are currently breaking trading records on a weekly basis. The sites in coastal towns and university cities are especially busy. We believe there will be sales growth to come from all of our city centre sites from now until June 2022 driven by a return to office working, greater public confidence due to the completion of the vaccination programme and a return of tourists over Winter 2021 and Spring 2022. In effect we expect that the disparity between the two different types of location (suburban and regional towns versus city centre/office locations) will return to something like normal comparative patterns over the next 12 months. In addition, we expect that the substantial growth of delivery and take out services we achieved during the financial year covered in this report will remain at higher than historic levels.”

Food-led businesses dominate new entries on updated Propel Premium database of multi-site companies this month: Food-led businesses are dominating the make-up of the new companies being added to the next edition of The Propel Multi-Site Database, which is produced in association with Virgate. It will be sent to Premium subscribers at midday on Friday, 27 August, and will contain at least 56 new companies – and is updated every month. The 56 new companies operate 393 sites between them. New additions with a food-led bias include north west-based concept The Firepit Bar & Grill, which has opened its fourth site and plans further expansion in the region. Sania is a franchise business that operates sites for German Doner Kebab, KFC, Pizza Hut, You Me Sushi and Café Barbera, which opened its first German Doner Kebab recently. Meanwhile, Santo Remedio, the Mexican restaurant brand founded by Edson and Natalie Diaz-Fuentes, is opening a second site in east London next month. The go-to database 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. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. Premium subscribers will also receive the second edition of The New Openings Database at exactly the same time on Friday, 27 August. It focuses on newly announced openings and upcoming launches in the sector and will be updated every month. Meanwhile, subscribers also have access to another database called Turnover & Profits Blue Book. The Blue Book, which is also updated every month, with the latest version having been sent out on Friday (13 August), provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. 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. 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. Email to sign up.

Nando’s lends suppliers 70 staff after labour shortages close restaurants: Nando’s has had to shut several restaurants after running out of food with other branches forced to open with reduced hours. The company said the problem was due to staff shortages with its suppliers. Nando’s has not stated how many outlets are affected. The firm’s Twitter account has however confirmed branches at Braintree, Camberley, Coventry Arena, Eltham, Enfield, Shrewsbury and Telford were all closed today. Nando’s spokesperson said: “The UK food industry has been experiencing disruption across its supply chain in recent weeks due to staff shortages, and a number of our restaurants have been impacted. However, we can confirm that from today Nando’s will be lending seventy of our brilliant team members to support our key suppliers – working in partnership to help get things moving again.” The spokesperson added this should have “a positive impact on the affected restaurants very soon”. Last week fried chicken restaurant KFC warned customers that there may be food shortages in some of its restaurants following weeks of “disruption”.

Just Eat reports 76% increase in UK orders: Just Eat processed 135 million orders in the UK in the first six months of 2021, representing a growth rate of 76% compared with the same period last year. Delivery orders for the first six months of 2021 grew more than 700% compared with the same period last year. The company stated: “The Just Eat brand gained online share in the UK, including a significant inflection in London with triple-digit order growth in the first half of 2021 compared with the first six months of 2020. This significant growth was driven by our investment programme in marketing and delivery, increasing brand visibility and targeting a period of aggressive price leadership and the expansion of restaurant supply, including our partnership with household brands such as McDonald’s, Greggs, Pret A Manger, Itsu and Chipotle. We added further choice to our platform in the first half of 2021, where we were proud to welcome more than 90 new brands including Leon and Le Pain Quotidien, as well as successful roll-out and activation of national coffee brands Costa Coffee and Starbucks. At the end of June 2021, the number of restaurants in the UK increased to more than 58,000 from 50,000 at the beginning of the year. Also in the first half of 2021, we further increased brand coverage both nationally and in London by leveraging our Global campaign, local activations of new restaurant supply, and sponsorship of UEFA EURO 2020. In the first six months of 2021, GTV increased by 63% year-on-year, 13 percentage points below order growth mainly driven by the step change in quick service restaurant supply, whose orders typically carry a lower basket value. Revenue grew by 82% to €552 million in the first half year 2021 from €303 million in the same period last year. The revenue growth rate was higher than both the order and GTV growth rates, following the rapid increase in Delivery orders. Adjusted Ebitda  was minus €71 million in the first six months of 2021 compared with €127 million in the first half of 2020. The lower adjusted Ebitda  reflected our continued investments to win online share, including increased restaurant selection, marketing, and our price leadership strategy.” Jitse Groen, chief executive of Just Eat, said: “In the first six months of this year, Just Eat continued to invest significantly, predominantly in the historically underinvested legacy Just Eat countries. Our consumer base, restaurant selection and order frequency have strongly increased, which will lead to improved profitability going forward.”

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