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Wed 2nd Feb 2022 - Update: Pret sales up in London’s financial districts, Starbucks, Cineworld and Brakspear
Pret sales up in London’s financial districts, but recovery being dented by inflationary pressures: Sales at Pret A Manger grew faster in London’s financial districts last week than in any other UK area as banks call staff back into the office, according to Bloomberg’s latest Pret Index. It shows transactions are now 68% of pre-pandemic levels in the cluster that includes the City and Canary Wharf, the highest figure in almost two months. That builds on the momentum from a week earlier, when sales rose after the UK government dropped its work-from-home guidance, prompting banks including Goldman Sachs Group Inc and Citigroup Inc to encourage workers to make arrangements to return to their desks. In the coming weeks “you could see those levels of 90% plus Tuesday, Wednesday and Thursday” in London’s financial districts, Pret chief executive Pano Christou said. “I think on Monday and Friday, those levels will be lower,” he said, reflecting a trend Pret saw early in its sales data that pointed to bankers choosing to stay home on days that straddle the weekend. In another sign that life in the UK capital is inching back to normality, sales in the West End entertainment and shopping district shot up and are now almost back to pre-covid-19 levels. However, Pret’s recovery is being dented by inflationary pressures that could hamper its profitability, with the price the company pays for arabica coffee beans having soared 40% since 2020, Christou said.

Variety of vegan-inspired sites added to the sixth edition of The New Openings Database, 26,100-word report included: A variety of vegan-inspired sites have been added to the sixth edition of The New Openings Database, which is produced in association with StarStock. The database will show the details of 495 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday (4 February), at midday. The database, which is published monthly, shows the details of which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location. There will also be a website link to the businesses so you can find out more about them. The sixth edition of the database features Floozie, the all-vegan stuffed cookie concept founded by Kimberly Lin in 2020, which has opened its second London site near Harrods. In addition, vegan Chinese restaurant Mao Chow, which was founded by Julian Denis, has launched its second site, Mao Chow Express, at Boxpark Shoreditch. Also added this month is Veggie Master, which is set to open its 11th site, in Lenton Boulevard, Nottingham, early this year. Meanwhile, vegan doughnut company The Doughnut Whisperer, which also offers nationwide delivery, has opened its debut site, in Chester city centre. Premium subscribers will also receive a 26,100-word report on the new additions to the database. Premium subscribers also receive access to two other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, was sent to Premium subscribers last Friday (28 January). The database contained 87 new companies, bringing the total number of businesses listed up to 2,293. The 918 sites run by those 87 new additions means the entire database of sites has reached 63,489 sites. Premium subscribers also received a 6,500-word report on the new businesses added. 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 also receive the Turnover & Profits Blue Book, which is produced in association with Mapal Group. The Blue Book, which is also updated every month, 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 group 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.

Starbucks reports higher profits, but Omicron adds costs: Global coffee chain Starbucks has reported higher quarterly profits, but said an unexpectedly costly hit from the latest covid-19 wave would lead to further price increases this year. For the quarter, the company said profits jumped 31.1% to $815.9m on a 19.3% rise in revenues to $8.1bn. The coffee chain reported higher comparable store sales in the US in the quarter ending 2 January, but lower sales internationally, with a big drop in China in the wake of that country’s “zero covid policy”. Comparable sales in the US jumped 18%, benefiting from new cold beverages, higher prices and an increase in rewards members. Same-store sales in the international division declined 3%, reflecting a 14% drop in China. In its home market, Starbucks experienced “very strong” consumer demand over the holidays, according to chief executive Kevin Johnson. But he said Omicron weighed on the US results, leading to staffing shortages in its distribution and transportation network and higher covid isolation pay for employees who became sick. He said that the latest virus wave also exacerbated staff turnover issues, a bigger problem throughout the pandemic. In light of the higher costs, Starbucks plans additional price increases “though the balance of the year,” Johnson said. The Seattle-based chain – whose workers in more than 50 of its US stores are seeking to unionise – said it has also paid more to train new employees and for them to isolate after exposure to covid-19. “When the Omicron surge began, inflationary costs and staffing shortages were amplified, well in excess of our expectations,” said Johnson. After raising menu prices in October and January, the chain plans to increase them again in 2022 and will cut spending on marketing and promotions.

Cineworld hopes to delay payments to former Regal shareholders as it struggles under £5bn debt pile: Cineworld is in talks to delay payments to former “dissenting” shareholders of its US Regal Entertainment business as it continues to struggle under a huge pile of debt. In September, the company reached an agreement with disgruntled Regal shareholders to pay them $170m (£126m) in relation to its 2018 takeover of the US company. But Cineworld said on yesterday (1 February) it had obtained undertakings to waive off any default arising from non-payment of dues to creditors, including holders of its guaranteed convertible bond due 2025. The company said it was “hopeful” an agreement with Regal shareholders could be reached “within the period afforded by the waivers’ so that it can ‘maximise its available liquidity”. Despite a recent uptick in sales as cinemas reopened and people flocked to see the new Spider Man movie, Cineworld is struggling under a debt pile of almost £5bn. The Daily Mail reports that a large chunk of that comes from the Regal deal, which left the group heavily indebted just as the pandemic started. Cineworld is in the midst of a legal battle with the Canadian rival over the aborted merger, with the latter filing a new claim for compensation just last week. Russ Mould, investment director at AJ Bell, said: “Cineworld should be a beneficiary of cinema’s revival in the wake of the pandemic but whether the market will recognise this given the mess the company finds itself in is open to question.”

Brakspear moves out of its heartland to acquire West Sussex hotel: Henley-based pub operator Brakspear is adding to its newly-rebranded managed division, Honeycomb Houses, with the purchase of Ghyll Manor, a hotel with a wedding and functions business near Horsham, West Sussex. The acquisition takes Honeycomb Houses up to ten pubs and stretches the estate’s reach beyond its Cotswolds and Oxfordshire heartland. Ghyll Manor is located in the village of Rusper, just seven miles from Gatwick Airport. Built in 1678, the timber-framed building is set in 25 acres of grounds including a lake, landscaped gardens, woodlands and tennis courts. Accommodation is offered in 29 bedrooms within the main house and in cottages in the grounds while weddings for up to 120 people are held in several spaces including the characterful Hunsdon Room. A popular wedding venue and weekend break destination for many years, Ghyll Manor was closed during the 2020 lockdown by previous owners Boundless Breaks, and was bought by Brakspear in December last year. Brakspear chief executive Tom Davies said: “We’re thrilled to bring Ghyll Manor into the Honeycomb Houses family. It’s an outstanding venue with enormous potential and commands huge affection locally which we’re confident we can harness to restore it as the most sought-after wedding venue in the area. Ghyll Manor becomes our first wedding business outside the Cotswolds. In developing it, we will draw on our experience at The Frogmill near Cheltenham, which has thrived since we opened it in 2018, both as a function venue and as a weekend break and dining destination – so we’ll be looking to build the same broad appeal at Ghyll Manor.” Brakspear intends to reopen Ghyll Manor in 2023 and is considering the site’s potential before making firm redevelopment plans, though these will include a major refurbishment and the addition of more bedrooms. Brakspear rebranded its managed division as Honeycomb Houses last November, when it also stated its ambition to acquire new sites that met its brief of larger, rural pubs with bedrooms, in the south east. The estate now comprises ten sites in the Cotswolds and other locations in Brakspear’s heartland around Henley-on-Thames, most of them with luxury accommodation.

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