JD Wetherspoon labour costs now £100m a year more than before covid pandemic, ‘older generations are back’: JD Wetherspoon chairman Sir Tim Martin has told Propel that labour costs at the company are now £100m a year more than before the covid pandemic – an increase of 15%. Sir Tim said although inflation is, in general, reducing, labour and energy costs have continued to rise, leading to price increases by the industry that have further raised the differential in prices between the hospitality industry and supermarkets. He said: “Our company labour costs are now £730m a year. In 2019, they were £623m. Low unemployment and high inflation have pushed up wages throughout the economy on top of the national minimum wage and national living wage increases.” Speaking following the company’s trading update, where the business reported like-for-like sales in the 25 weeks to 21 January 2024 were 10.1% higher than the previous year, Sir Tim said the older generations “were back”. He added: “For the first couple of years post-lockdowns, so-called young persons’ drinks were in strong growth, so flavoured spirits, shots and cocktails. In the last year, there has been a noticeable resurgence in real ale, cider, stout and draught products generally. The older generations are back. Cocktails, wine, real ale and Guinness did very well over Christmas. Trendy products, like AU Vodka, have also been popular. Christmas meals were also much stronger this year.” Sir Tim said its two most recent openings – at Heathrow airport and London Euston station – had made a “promising start” while a “handful” of the 30 pubs it put up for sale last year remained on the market. Looking at how 2024 will shape up for the industry, Sir Tim said: “It’s been a slow recovery from the pandemic, so the marathon runners will just have to keep plugging away.”

 

San Carlo MD Marcello Distefano to speak at first Propel Multi-Club Conference of 2024, open for bookings: Marcello Distefano, managing director of restaurant group San Carlo, will be among the speakers at the first Propel Multi-Club Conference of 2024. The conference takes place on Thursday, 21 March, at the Millennium Gloucester Hotel in London’s Kensington, and is open for bookings. Distefano talks to Propel group editor Mark Wingett about building and evolving a premium casual-dining business both in the UK and internationally, combating volatile trading patterns and placing greater trust in his teams. Operators can book up to three free places per company while Premium subscribers who are operators can book up to four free places. To book, email kai.kirkman@propelinfo.com.

 

Propel’s next Multi-Site Database to be released tomorrow with new seven category segmentation: The next Propel Multi-Site Database will be released tomorrow (Friday, 26 January) at midday to Premium members – and in a ground-breaking move, sees companies now searchable in seven main segments. The database, produced in association with Virgate, provides details of more than 3,000 multi-site operators. But following feedback from subscribers, companies will now be searchable in seven main segments – allowing users to search quickly in key categories and allowing them to drill down into the details and updates for these specific areas. The biggest segment is casual dining, which consists of 900 companies, and they make up 28% of the database. There are 758 companies in the pubs and bars segment (25% of the database total), 497 in café bakery (16% of total), 408 quick service restaurant companies (14%), 247 hotel business (8%), 187 experiential leisure operators (7%) and 50 fine dining companies (2%). The database is updated each month – this edition includes 20 new companies and brings the total to 3,047. Premium members also receive access to five other databases: the Turnover & Profits Blue Book, the New Openings Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Food & Beverage. Propel is evolving its Premium subscription offer by launching Premium Club on Thursday, 1 February. All circa 4,000 existing subscribers automatically become members. The launch of Premium Club comes with even more benefits. All subscribers will be offered a 20% discount on tickets to four Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Propel Premium subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

Revolution Bars Group CEO – there is a real danger of there being no-late economy for young people to come back to unless the government takes action: Revolution Bars Group chief executive Rob Pitcher has told Propel there is a “real danger” of there being no late-night economy for young people to come to once the cost-of-living crisis abates – unless the government takes action. Speaking following the company’s trading update, Pitcher said the fact the group is having to close eight of its sites and Rekom was putting parts of its business into administration should act as a wake-up call to those in Downing Street. “Our performance at Christmas showed that we have a good business, but the impact of the cost-of-living crisis on the younger generation is having a real impact on the late-night sector as a whole,” said Pitcher. “We saw after covid, when Generation Z had money in their pockets, that they flooded back. The fact is right now, they simply can’t afford to go out as much as they want to – and our Revolution business in particular is seeing that impact. We’ve seen it too with Rekom, which is one of the best late-night operators around. It’s clear the younger generation will come back when they have money again, but there is a real danger that by then, there won’t be a late-night economy for them to come back to. Inflation might be coming down, but other costs are rising – and fast. Labour and business rates are impacting us by another £4m-£5m and the government has to understand that businesses do not have a bottomless pit of money. On top of that, there’s fresh train strikes this weekend. All this has led to us shutting eight bars and cutting our capital expenditure to the bare minimum. The government has got to step in and do something. It needs to understand this can’t continue and give us a level playing field. It says it can’t afford to give doctors the pay increase they are demanding. Well, we can’t afford the 10%-15% increase in costs it keeps putting on us, especially in those sectors that are seeing their customer base also struggling. We’re told not to put prices up because it will fuel inflation, but what choice do we have? We’ve not done so at Revolution because our core customer is struggling, and we’ve continued with our promotions to show them that we have their backs, but it means margins have been severely eaten into and leads to the decisions we’ve had to make – and ultimately, it’s costing jobs. We urgently need action on business rates, equality on tax with supermarkets and an end to the train strikes. It’s not just bars at risk, it’s also live music venues – we’re in danger of losing out cultural institutions. We know these cost increases are coming but we don’t know exactly when that younger consumer will come back, and by then it could be too late.” Of the eight bars that the group put on the market, Pitcher said Reading had been sold, while another deal was going through this week. He added there had been interest in all but one of the sites, with leisure operators and burger brands among the interested parties. Pitcher said the situation was frustrating because it meant the group was unable to grow its Peach business “as quickly as we want to”. However, he said he was hopeful of adding one or two sites this year, but the business would need to be creative with how it structured the deals. He said it was similar with Revolución de Cuba, which was performing brilliantly in a difficult market.

 

BBPA – 5% beer duty cut could create 13,000 jobs: The British Beer & Pub Association (BBPA) has claimed a government cut to beer duty by 5% would lead to the creation of up to 13,000 jobs, backed by research from Oxford Economics. The study comes following the recent news that more than 500 pubs closed their doors for the final time during 2023 due to a combination of high energy bills, the third highest beer duty in Europe and no VAT relief for hospitality. The industry already supports 936,000 jobs around the UK and contributes £26bn to the wider economy, while generating £15bn in taxes. One in three pounds spent at the pub go in taxes, while 40% of breweries’ turnover are tax, the trade body said. “This new research offers proof that a 5% cut to beer duty can deliver vital economic growth up and down the country,” BBPA chief executive Emma McClarkin said. “The chancellor has stated that he is focusing on cutting taxes at the spring Budget – now he has the proof that cutting beer duty won’t just affect the cost of a pint but will deliver vital economic growth and create jobs.” Alun Cairns MP, chair of the All-Party Parliamentary Beer Group, added: “Britain’s pubs and brewers generate so much value for local economies and communities, and it is clear that a cut to beer duty at the spring Budget can be a driver of economic growth and job creation.”

 

UKHospitality welcomes banning of fake reviews under ‘drip pricing’ legislation while optional extras still allowed: UKHospitality has welcomed the banning of fake reviews under new “drip pricing” legislation while optional extras presented to customers during a booking will still be allowed. The Department of Business and Trade has outlined the forthcoming laws that will form its Digital Markets, Competition and Consumer Bill. Among them will be adding fake reviews to a list of banned business practices and ensuring platforms hosting reviews check their veracity. “Banning fake reviews is a positive step, given the significant reputation damage and financial impact they can have on businesses,” said UKHospitality chief executive Kate Nicholls. “It’s essential that deliberate fake reviews of businesses on third-party platforms are covered by this legislation and we look forward to working with the government as these plans develop.” The government also made clear that additional choices presented to customers during a booking, such as adding breakfast to a hotel stay, have been excluded from measures to ban “drip pricing” – or additional fees added later during the booking or purchasing process. Nicholls added: “The vast majority of additional fees involved in hospitality bookings are optional and designed to offer customers ways to enhance their experience, such as adding breakfast to a hotel stay. We’re pleased the government has taken on board our feedback and excluded optional extras from an outright ban. This means customers will still be able to upgrade and customise their hospitality experience as they see fit.”

 

Government consulting on whether to amend Licensing Act to allow for digital age verification: The government is holding a consultation on whether or not to amend the Licensing Act to allow for digital age verification. The minister for crime, policing and fire, Chris Philp, said it will investigate whether to allow digital identities and technology to play a role in age verification for alcohol sales. It will also look at whether to amend legislation to specify that for alcohol sales that do not take place face to face, age verification should take place at the point of delivery as well as sale. “The government is keen to enable the secure and appropriate use of new technologies that can improve the experience of consumers and retailers,” he said. “However, the current wording of the Act does not allow technology to play a part in the age verification process for alcohol sales.” In terms of digital identities and technology, the options are to do nothing and only allow traditional identity documents; to allow digital identities for age verification for alcohol sales; or to allow age estimation and other technology for age verification for alcohol sales. In terms of remote sales, the options are to do nothing so that age verification checks, checks to establish that an individual is not already intoxicated, and checks that a sale is not a proxy sale must take place at the point of sale; to amend the Licensing Act so that these checks must take place at the point of sale/delivery; or to amend the Section 182 guidance accompanying the Act to advise that these checks must take place at the point of sale and additionally at the point of delivery. The consultation closes at 11.59pm on 30 March 2024.

 

More than half of consumers don’t understand what ‘net zero’ means as study highlights sustainability language barrier: More than half of consumers don’t understand what “net zero” means, a study that highlights the language barrier blocking the road to sustainability has revealed. The survey of 1,000 UK adults – conducted by insights firm Trajectory and communications agency Fleet Street and launched at the Restaurant Marketer & Innovator European Summit – also revealed just 11% of consumers feel they have a thorough understanding of “carbon offsetting”, despite it being one of the primary methods businesses use to hit net zero goals. Furthermore, the term “circular economy” is understood by just 4% of those polled, and only 25% feel they have a thorough understanding of the term “green”, while 26% can confidently define “sustainability” and 32% “organic”. In addition, only 35% were confident of being able to define “environmentally friendly”, 40% “locally grown/seasonal”, 55% “recycling” and 47% “single-use plastics”. Mark Stretton, co-founder of Fleet Street, said: “While many businesses and brands are taking critical action to tackle the environmental crisis, it is clear that much more work needs to be done to engage consumers, starting with the language used, as a significant amount of it doesn’t appear to mean much to them. The lack of understanding around what many businesses would probably consider to be standard terms is striking and indicates a level of disconnect between brands and consumers.” The data also suggested younger age groups and those with higher levels of education have greater confidence in their understanding of key terms. The study concluded that 90% think it’s important that brands talk about their sustainability initiatives; 68% are more likely to buy from a company that has a clear environmental strategy; and 47% think brands have the most responsibility when it comes to delivering action on climate change.

 

‘Scottish hospitality venues up to £110,000 worse off due to lack of business rates support’: Scottish hospitality venues are up to £110,000 worse off than their English counterparts due to the lack of business rates support, according to new analysis. Figures from UKHospitality Scotland highlighted in an evidence session to the Scottish government’s economy committee revealed an average pub in Scotland will be £15,000 worse off than its equivalent in England, with a medium-sized hotel finding themselves £30,000 worse off. Larger businesses have been denied support worth up to £110,000, the payment cap. In December, the Scottish government chose not to introduce any form of business rates relief scheme for hospitality venues. This is in contrast to England, which extended its 75% business rates relief and resulted in millions of pounds being allocated to the Scottish government. According to The Fraser of Allander Institute, at least 10,000 hospitality businesses are now operating without any financial assistance. Leon Thompson, executive director of UKHospitality Scotland, said: “These figures clearly illustrate the real-life consequences of the Scottish government’s decisions. In the current climate, it is almost impossible to fathom a local pub landlord or hotel manager being able to find thousands of pounds to pay a bumper business rates bill in April. As it finalises this year’s Budget, I would urge the Scottish government to use the funds available to it and introduce a 75% business rates relief scheme.”

 

Job of the day: COREcruitment is working with a hospitality group that is looking to grow further and is seeking an experienced finance business partner to join the team. A COREcruitment spokesperson said: “Previous quick service restaurant or multi-site hospitality experience is essential. You will be required to be a qualified accountant (CIMA/ACCA/ACA) or near qualified as a minimum, with a proven track record in the hospitality/retail industry. You will be highly analytical, have advanced knowledge of Excel, and excellent oral and presentation skills.” The salary is up to £50,000 and the position is based in London. For more information, email fabian@corecruitment.com.

 

Wright Brothers back on the expansion trail following ‘robust sales’ in 2023, appoints Mark Derry as chairman: Wright Brothers, the oyster specialist and seafood wholesaler which operates three London restaurants, has told Propel it is back on the expansion trail restaurant-wise following “robust sales” in 2023, and is approaching 2024 “with cautious optimism”. Ben Wright, who founded the business with brother-in-law Robin Hancock in 2002, said: “Our wholesale business has grown 106% from pre-covid and I’m delighted that we are finally back on the expansion trail in terms of new restaurant sites. We ended 2023 with robust sales, especially at Battersea Power Station, and approach 2024 with cautious optimism. This year, we are also launching our Shell to Shore oyster reef project with the Blue Marine Foundation as well as our own Wright Brothers SeaChange Foundation, focused on supporting life in the sea, on the sea and by the sea.” The business has also appointed Mark Derry, who is also chairman of Heartwood Collection, as its new chairman. Derry, who led Loch Fyne’s growth to 50 seafood restaurants before they were sold to Greene King in 2007, said: “I remain fascinated by the seafood market and was delighted to discover the team at Wright Brothers share common values. It is a unique business with a great following, and I am hugely looking forward to getting involved.” Wright added: “Mark has opened almost as many restaurants as we have opened oysters over the years, but more importantly, he is as passionate about great seafood and great teams as we are. Celebrating our £30m turnover milestone seemed like a great time to get Mark on board and it’s a privilege to be sharing the next stage of our seafood journey with him.”

 

Yori to add Oxford site to regional estate: Korean barbecue brand Yori is to further increase its regional presence with an opening in Oxford, Propel has learned. Yori, which made its regional debut at the start of 2022 in Cambridge, has taken a new lease on the former Byron site at 33-35 George Street in the city, for an opening this spring. The premise extends to 3,190 square feet spread across ground floor and basement. The site will be Yori’s 13th restaurant, following the opening on the former Hache site in Curtain Road, Shoreditch, last summer. The brand also operates regional sites in Brighton and Staines. Yori, which means “cooked food” in Korean, was founded in 2016 by Jong Soon Kim, who is also behind Japanese restaurant Nori and Korean dessert cafe Cake & Bingsoo – both in New Malden, Surrey – and Japanese dessert parlour Cafe Mori in Wimbledon. Tom Richards, of ARC, acted on behalf of Yori on the Oxford deal, while Megan Orr, of Colliers, represented the landlord. 

 

The Real Greek set to launch in Liverpool ONE for first 2024 opening: The Real Greek, the Fulham Shore-owned brand, will launch a new restaurant in Liverpool ONE next month – its first opening of 2024. Opening on Sunday, 11 February in the 3,900 square-foot former Byron Burgers unit in Paradise Street, the new 162-cover site includes 38 covers of outdoor seating, with plans to offer a delivery service in the coming months. The Real Greek’s 26th site, it will offer a “kids eat free” initiative every Sunday, whenever an accompanying adult spends £10. Sandro Spahiu, managing director at The Real Greek, said: “We have always been keen to expand to Liverpool, as it is renowned for its diverse and high-quality hospitality scene, so securing a home for our new restaurant right in the heart of Liverpool ONE is a hugely exciting announcement for us. We are thrilled to be making our debut in this vibrant city.” Earlier this month, Marcel Khan, the new chief executive of Fulham Shore, the Toridoll Holdings and Capdesia-backed owner of Franco Manca and The Real Greek, told Propel there is still a lot of white space for both brands to grow into.

 

Dodo Pub Company sees trading return to pre-covid levels, looking to add two sites a year: Dodo Pub Company co-founder Leo Johnson has told Propel the business has seen trading return to pre-covid levels and is aiming to add two sites a year to its portfolio. Earlier this week, the company revealed it has acquired its eighth site and second in Cheltenham. The group has added The Sudeley Arms to its portfolio, which will be renamed Airs & Graces in a nod to Cheltenham’s world-famous races. Johnson said: “We are really happy to have found a second site in Cheltenham following the success of The Bottle of Sauce, which we opened in December 2016. We’ve started refurbishments and the newly named Airs & Graces should be opening around March. We have hit the ground running in 2024, following a good Christmas, and our trading remains positive across the estate, amidst the pressures of inflation and rising costs, and we are pleased to report that we have returned to pre-covid levels. Our current expansion plans are set at two pubs a year. We’re in discussions with a number of other potential premises.”

 

Paddy & Scott’s in management buyout: Independent coffee shop operator and wholesaler Paddy & Scott’s has been bought by its management team. Scott Russell – the remaining co-founder and sole owner – has sold the company to a team led by chief executive Jonathan Reed and operations director Zoe Hill. Russell told the East Anglian Daily Times: “It really works for all parties. I have grown the business to where I want it. It’s my name over the front door and I want to make sure the business is in the right hands – and it is.” He previously received a slightly higher offer from a public limited company but is delighted the business would stay in local hands after its two managers secured “significant” funding. Reed and Hill are being supported by three backers – two business people from Suffolk and one from elsewhere. “About 18 months ago we were approached by a private business that wanted to buy Paddy & Scott’s,” said Reed. “We felt – me and Zoe – that we had worked too hard and too long to become part of a big, global plc, and therefore we would try and find another option for Scott.” The bulk of the business is its wholesale arm that is geared towards supplying its coffee products to a range of hospitality and leisure businesses. There are also three further Paddy & Scott's cafés – in Lichfield, Colchester and Durham – operated under licence and an e-commerce business. The company – which enjoyed 28% growth last year – was started on a shoestring in 2007 by Russell and Paddy Bishop, who exited the business in 2016. Russell said he now wants to pursue other opportunities and work with local charities.

 

Swiss hospitality group set to launch Japanese and Peruvian fusion restaurant in its debut London hotel: Swiss hospitality group, Michel Reybier Hospitality, is set to launch a new Japanese and Peruvian fusion restaurant in its debut London hotel. It will this spring open La Muña within L’oscar London, the boutique hotel it opened in the former Baptist Church headquarters in Holborn in 2018. It will be led by executive chef Arturas Kondratjevas, formerly the head chef of Home House, the private members’ club in nearby Marylebone. “Following the success of La Muña at our other Michel Reybier Hospitality hotels, we are delighted to bring the restaurant to London and introduce it to both locals and hotel guests,” Kondratjevas said. “While the menu showcases vibrant Japanese and loud Peruvian flavours, provenance and local ingredients remain at La Muña’s core.” A selection of crudo, caliente and ceviche dishes will include the likes of beef steak teriyaki and truffle sauce; red tuna ceviche with sesame; and black cod marinated in saikyo miso. As well as L’Oscar London, Michel Reybier Hospitality operates 12 other hotels, spas and resorts in Switzerland and France.

Sweden-based Mexican fast-food franchise makes Irish debut and eyes further openings in country: Sweden-based Mexican fast-food franchise chain Zócalo has opened its first restaurant in the Republic of Ireland. Franchisee Robert O’Donaghue has opened at Unit 3 Village Green in Church Road, Douglas, Cork, and is eyeing further sites in the country. Einar Örn Einarsson, chief executive at Zócalo, said: “Last week I was in the city of Cork in Ireland for the opening of the first Zócalo restaurant in Ireland. The restaurant will be operated by Robert O’Donaghue, who is the master franchisee for Zócalo in Ireland. Robert and I have big plans for Ireland and believe there are a lot of opportunities for Zócalo in the market. Our plan is to follow up the opening in Cork with a number of further openings in the coming months and years. Robert is also looking for sub-franchisees. We’ve had a fantastic opening weekend, and we believe there are a lot of opportunities in Ireland for Zócalo.” It follows Zócalo opening its first UK restaurant last year, at 21 Great Windmill Street in London’s Soho. Master franchisees Pritesh and Shivum Amlanu partnered with chef Andre Martin and former Premier League footballer Jose Fonte for the opening in October. Zócalo was founded in 2002 and has grown to 25 restaurants in Sweden, Denmark and Iceland.

 

Scottish hotel operator sees profit fall due to cost pressures and lack of government support: Lanarkshire-based Lisini Pub Company has reported a fall in profit in the year to 31 March 2023 due to cost pressures and a lack of government support. Its turnover rose from £8,853,134 in 2022 to £12,128,420 but its pre-tax profit dropped from £1,629,619 to £396,424. Costs rose by more than £1m while administrative expenses grew by more than £2m. The company – which operates Angels Hotel and The Castle Rooms in Uddington, Dalziel Park Hotel in Motherwell, The Parkville Hotel in Blantyre and The Croft restaurant in Glasgow – received £5,679 in government grants compared with £451,093 in 2022. Dividends of £100,00 were paid (2022: £197,300). Director Siobhan Edwards said it has been a “challenging year for the company” and the “operating environment and operating profit remains exceptionally challenging”. She added that the reduction in profit before tax was “due to the return of 100% business rates; no government funding, grants or financial support; increases in national minimum wage; VAT; increases in interest rates; the cost-of-living crisis; supply changes; inflation; and massive increases in utilities that lack any form of governance in the UK”. Edwards said: “The company is experiencing continued external pressure from the above with no governmental support in sight. Industry-wide staffing shortages and significant inflationary factors with diminishing levels of consumer disposable income is a cause for concern. An increased focus on cost base and increasing margin and overall profitability is a key focus for the next trading year. Overall, the board is content with the company’s performance against unprecedented pressures, and in particular, the management of costs and cash flow during this period.”

 

Burrito franchise set to open in Gillingham: Burrito franchise Plan Burrito is set to open in Gillingham for its 11th site. It will open at 146 High Street in the Medway town, although an exact opening date has not yet been set. Founded by Stephen Hopper in 2015, Plan Burrito more than tripled in size from three sites to ten last year. It opened in Hitchin, Guildford, Leamington Spa, Ramsgate, Norwich, Shrewsbury and Canterbury – adding to existing locations in Loughborough, Whitburn and London’s Southampton Row. “We are so excited to be opening in Gillingham,” Hopper told Kent Live. “We will be offering both dine-in and delivery services. We’ve looked at our other stores and what has worked well, and so opening in Kent is like a cluster-effect.” 

 

Morley’s partners with Gymbox: Morley’s, which owns more than 100 chicken shops across the UK, has partnered with London gym operator Gymbox, which operates nine gyms in the capital. It will mean Gymbox members can claim free wings when they buy a meal at Morley’s sites across London, when they show their Gymbox app and say “bossmangymbox101”. It will also see Morley’s Brick Lane site host a “Big Chicken Shop Challenge” on Thursday, 1 February, in which guests can take on an assault bike challenge in a bid to win a free year’s Gymbox membership, with a day pass and free wings also up for grabs. Shan Selvendran, managing director at Morley’s, said: “This partnership helps celebrate the unique lifestyles Londoners lead every day – from treating themselves to our wings through to hitting it hard in the gym.” Rory McEntee, brand and marketing director at Gymbox, added: “We’re thrilled to be partnering with Morley’s as the collaboration represents a celebration of balance in everyday life.” Morley’s chief executive Shan Selvendran told Propel last year that having passed the 100-store landmark, it is looking to ramp up its expansion through franchising and explore possible global growth.