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Morning Briefing for pub, restaurant and food wervice operators

Mon 4th Mar 2024 - CGA Prestige Foodservice Price Index shows inflation slowing but challenges lie ahead
CGA Prestige Foodservice Price Index shows inflation slowing but challenges lie ahead: The CGA Prestige Foodservice Price Index recorded year-on-year inflation of 12.6% in January – a drop of 1.2 percentage points from December's rate of 13.8%. It is the seventh successive month-on-month fall in inflation as markets adjust to falling commodity pricing. Foodservice Price Index inflation has now moved down by an average of 1.4% a month since June 2023, with expectations of further falls ahead. However, year-on-year inflation remains high in most categories, with only the dairy and oils and fats segments below double digits. There is some relief month-on-month however, with four categories falling in price and only two reporting a rise of more than 1% versus December 2023. While continued falls in inflation are a positive sign for the industry, concerns remain for pricing over the coming months as farmer protests on the continent and border checks in the UK threaten to add further cost to supply. The British government’s proposal mandating the labelling of all meat and dairy products for exclusive consumption within the UK, and not for consumption within the EU, has been criticised by industry bodies, as it will result in increased food expenses, negatively impact exports and discourage investments in domestic food manufacturing, all of which are expected to increase food and beverage pricing in the UK. Shaun Allen, Prestige Purchasing chief executive, said: “The current falls in inflation are a positive sign for operators; however, it is worth noting that prices are still rising compared to last year, and while inflation is easing, we remain in a period of unprecedented foodservice price increases. It is more pressing than ever for businesses to remain vigilant and assess price changes in their supply chain using good data and market insight.” James Ashurst, client director at CGA by NIQ, said: “While it’s encouraging to see a slowdown, proper respite on foodservice price inflation remains a long way off. Supply issues are causing widespread frustration at a time when commodity prices are relaxing and businesses and consumers should be finding the going a little easier. More government support, including a rethink on import and admin issues, would be welcome.”

Premium subscribers to receive two databases this week: Premium subscribers will receive two databases this week. The next edition of the UK Food & Beverage Franchisee Database will be sent on Wednesday (6 March), featuring ten new entries and updates to existing entries. The database is updated every two months, and the latest version features 130 businesses and more than 55,000 words of content. Among the new entries are three McDonald’s franchisees – CJ Rach, which operates six restaurants in Liverpool; Lewco Holdings, which runs three restaurants in Weymouth and Dorset; and Rookery Foods, which has disposed of nine of its 16 restaurants in Cheshire. Following this, the next Turnover & Profits Blue Book will be sent out on Friday (8 March). A further 18 companies have been added, while 37 have been updated. The database now features 889 companies, with 583 in profit and 306 in loss. Premium Club members also receive access to four other databases: the Multi-Site Database, produced in association with Virgate; the New Openings Database; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Hospitality. All members will be offered a 20% discount on tickets to five 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 Premium Club 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 Premium Club for a year for £995 plus VAT – whether they are an operator or supplier. Email kai.kirkman@propelinfo.com today to sign up.

Further national insurance reductions being considered as Hunt hints at tax cuts: Jeremy Hunt has hinted that he will introduce tax cuts when he delivers the Budget on Wednesday – with a further cut to national insurance among the options the chancellor is considering. Hunt has been under growing pressure from Tory MPs to lower taxes and told the BBC he wanted to “show a path” towards a lower-tax economy but in a “responsible” way. Among the measures he is believed to be considering is a further cut to national insurance, already reduced from 12% to 10% in last year’s autumn statement. In an interview with the BBC’s Sunday with Laura Kuenssberg programme, Hunt said: “When we look around the world, the economies that are growing fastest, whether it’s North America or Asia, tend to be the ones with lower taxes.” He suggested the government has always said it would only cut taxes in a way that was “responsible and prudent”. He continued: “The most unconservative thing I could do would be to cut taxes by increasing borrowing. But I do want, where it's possible to do so responsibly, to move towards a lower-tax economy, and I hope to show a path in that direction.” Despite last year’s national insurance cuts, and with a general election due by the end of January, the overall amount of tax people pay is on course to reach record levels. Meanwhile, the Telegraph reports that Hunt is drafting plans for up to £9bn worth of tax rises and spending reductions in an effort to balance the books and pay for a potential 2p cut in national insurance. Hunt is not expected to cut income tax as he focuses instead on further reductions in national insurance. Government sources said a 2p cut in national insurance that would cost £9bn was still “on the table” but that an income tax cut was not. They pointed out that a 2p cut in income tax would cost £14 bn, leaving no room for other measures. A Treasury source said: “With little room for manoeuvre, we are having to look at everything to make this work.”
 
Patel demands Hunt scraps ‘tourism tax’: Dame Priti Patel has demanded Jeremy Hunt scrap the “tourism tax” in this week’s Budget. The former home secretary said the government should reintroduce VAT-free shopping for tourists to inject fresh momentum into the economy. In an article for The Telegraph, she said such a move would “give businesses a real boost” and help them compete with European rivals. A wide range of groups, including the British Chambers of Commerce, the Federation of Small Businesses and Heathrow airport have joined the campaign to axe the tourist tax. Dame Priti said: “Our country now needs more pro-business measures to secure future growth and with the Budget approaching, the chancellor must consider scrapping the tourism tax and reintroducing VAT-free shopping for foreign visitors. Making this decision will give businesses a real boost as the current tourism tax has made us less attractive for overseas visitors and tourists and it is widely opposed by a broad coalition of businesses. From local tourism boards and councils, to high street favourites and our airports, there are growing calls for tax free shopping to be reintroduced.” She pointed to data from Visit Britain showing that spending by overseas visitors was down 10% in real terms in the third quarter of 2023 compared to the same period four years earlier, just before the pandemic. Patel said axeing the tourist tax to help the UK’s retail, hospitality and tourism sectors to thrive. “Unless tax-free shopping is reintroduced, British businesses will continue to lose out to their European competitors, where tax free shopping continues,” she said. “Our competitors in Europe have already taken advantage, with France experiencing record levels of tourism spend in 2022 and 2023 as they attract high spending tourists. That’s why the Chancellor needs to get Britain back on a competitive footing as reintroducing tax-free shopping will boost the economy, support job creation and help our retail, hospitality and tourism sectors to thrive.”
 
Labour to unveil plans to get young people on the dole back into work: Labour will today warn unemployed youngsters there should be “no option of a life on benefits” for those fit and able to work. Shadow work and pensions secretary Liz Kendall will say that a future government would not allow young people to languish on the dole when they could be working. Kendall will pledge investment in improving skills and mental health support, along with a new army of employment advisers to help get young people into work. But, in return, she will demand that those able to work look for a job. “This is our commitment to young people,” she will say. “We value you. You are important. We will invest in you and help you build a better future with all the chances and choices this brings. But in return for these new opportunities, you will have a responsibility to take up the work or training that's on offer. Under our changed Labour party, if you can work there will be no option of a life on benefits.” She will warn that “being unemployed or lacking basic qualifications when you’re young can harm your job prospects and wages for the rest of your life”. Today’s speech comes as new figures reveal that more than 850,000 young people aged 16-24 are not in education, employment or training, an increase of 20,000 in a year. Separate figures released by the Liberal Democrats reveal that the soaring number of people on long-term sickness benefits is costing the government £3bn a year. The research, compiled by the House of Commons library, reveals that the figure has risen by 625,000 since 2019. The study found that each person out of work because of sickness results in an average loss of £5,200 a year in tax revenue.
 
King ‘feeling slightly apprehensive’ ahead of official Arlington launch: Jeremy King ‘has admitted he is “feeling slightly apprehensive” ahead of the official launch of his new Arlington restaurant today. Arlington will open in the former Le Caprice site in London’s West End, one of three new restaurant launches this year from co-founder of Corbin & King and doyenne of London’s dining scene, along with a New York-inspired “Grand Café” called The Park in Bayswater and a relaunch of Simpson’s in the Strand. “I’m feeling appropriately apprehensive,” King told Jan Moir in a pre-launch piece for the Daily Mail. Moir wrote: “As always, god is in the detail in Jeremy-land, where staff are being trained, glassware is polished and celebrated maitre'd Jesus Adorno is answering phones and gearing up once more to welcome the old regulars.” King said of the man he first hired back in 1981: “I couldn't have contemplated doing it without Jesus.” Moir writes that “the very precise ambition is to launch Arlington as a restaurant that is the same but different from Le Caprice”. King said: “Nostalgia is terrific but one has to guard against pastiche.” Indeed, writes Moir, the menu boasts many old favourites – but there will be new additions such as a hokey pokey honeycomb ice cream, a “very reasonably priced lobster souffle” and even something called panacalty, a dish from the north east of corned beef hash made with bacon and onions. “Something a bit fun, something to get people talking,” said King. “Geordie hash in St James’s? Only he would dare.” Moir added. The big question, said Moir, is can Arlington reclaim the crown it wore as Le Caprice as the haunt every A-lister must be seen in? “Will Arlington rise to the same giddy heights as its new lobster souffle?” she adds. “I don’t doubt it for a second.”

C&C Group opens new distribution depot: C&C Group, owners of the Tennent’s, Magners and Bulmers Ireland brands, and Matthew Clark, Bibendum Wine and Walker & Wodehouse, has unveiled its new London distribution depot, Orbital West, in Heathrow. The new flagship facility underlines C&C’s significant investment in increased capacity and commitment to industry-leading customer service. The move to Orbital West also significantly contributes to the group’s wider carbon reduction programme and sustainability agenda. The move to the 113,600 square-foot facility, which is 40% bigger than the previous London depot, forms a key part of C&C’s extensive network of depots across the UK and Ireland, and is set to create a number of local job opportunities. Andrea Pozzi, chief operating officer at C&C Group, said: “The opening of Orbital West is an important milestone for our distribution platform in the UK. Our new depot is crucial for our growth plans, allowing us to streamline our operations through advanced technology which will enable us to service our customers in and around London more effectively. We are proud of the environmental initiatives we have invested in at Orbital West, which highlight the central role our depots play in our journey to become a carbon neutral business and C&C’s ongoing commitment to minimise our impact on the environment and the communities in which we operate.”

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