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Morning Briefing for pub, restaurant and food wervice operators

Mon 26th Feb 2018 - Update: Caffè Nero results, Starbucks trials 5p paper cup charge
Caffè Nero reports 2.8% like-for-like sales growth: Caffè Nero has announced its UK results for the period from June 1 2016 to May 31 2017, showing sales up 8% and like-for-like sales growth of 2.8%. In the period from June 1 2017 to December 31 2017, its global like for like sales also grew by 3.7%. The business has achieved 80 consecutive quarters of positive like-for-like sales growth since its inception in 1997. Caffè Nero plans to open a further 85 stores worldwide and to create a further 650 jobs in 2018. Gerry Ford, chief executive and chairman, said: “This year we have continued to focus on expanding our store base and delivering exceptional quality across our coffee products, our new and improved food options, and our service throughout our estate. We have also introduced a new app for rapid payment and loyalty rewards that has been particularly successful with our customers. It’s also an exciting time with the introduction of new products like Cortado and more customer offerings like our new Caffè Nero app. Our goal remains to be the highest quality coffee brand in all the communities we serve throughout the UK. I have every confidence in our product innovations and the potential of our people to day in and day out provide UK customers with a great experience.” The company added: “Caffè Nero’s growth began in 2007 and has seen all funds reinvested back into the business, totalling more than £200 million over the last ten years. In the last three years alone, Caffè Nero UK has invested more than £55m in funds for capital expenditure. During the same three year period, Caffè Nero has also made more than £160m in payments to the UK government. This reinvestment, over the last three years, has created more than 1,000 jobs.”

Starbucks trials 5p charge on paper cups at 35 London sites: Starbucks is to start charging five pence for coffee cups as part of a drive to reduce waste and encourage the use of reusable cups. The levy will be trialled at 35 London stores. Starbucks says the trial will also look at how to change consumer behaviour after half of consumers surveyed said they would start to carry a reusable cup. The proceeds from the 5p charge will be donated to an environmental charity. Behaviour change experts Hubbub will help to track the impact on customer habits. Since 2014, Starbucks has offered a £1 reusable cup to make it as easy as possible for customers to reuse at an accessible price. During the trial, five pence will be added automatically on to any paper cup. To further reduce waste, Starbucks said its baristas will also ensure all customers drinking in store are offered their drink in a ceramic cup. Simon Redfern of Starbucks Europe said: “We’re hoping that this charge will remind customers to rethink their use of single-use plastic-lined cups, as it has with plastic bags. We’ve offered a reusable cup discount for 20 years, with only 1.8% of customers currently taking up this offer, so we’re really interested in working with Hubbub to see how this charge could help to change behaviour and help to reduce waste.’ Gavin Ellis, co-founder of Hubbub, said: ‘Our early conversations with customers have shown an increased awareness of the need to reduce waste from single-use cups. Previous studies have shown that adding a charge on single-use cups is more effective than money off a reusable cup. We’re excited to be working on this initiative with Starbucks to find out if this is the case on the high street and to discover what else will encourage people to use reusable cups.” MPs have called for a 25p ‘latte levy’ to curb the mountain of up to five billion disposable coffee cups dumped each year, almost none of which are recycled. Experts estimated the levy could raise £438 million and lead to a 30% reduction in the number of cups as more people carry their own. Government sources have said ministers are ‘open’ to the idea of a coffee cup charge if evidence shows it would change behaviour.

Boxpark founder – ‘there is a correction in the market going on’: Boxpark founder Roger Wade, has dismissed claims that eating out is in trouble is “ridiculous”. “It’s like when they said we’d get rid of physical retail five years ago, and it would all be Amazon and drones,” he told City AM. “There’s a correction in the market, sure. But in both cases, they underwent quite rapid expansion, and they took on high rents. The lesson that future guys have to learn is they have to grow organically. It’s been a chase to the top, to expand rapidly without really thinking about how to expand. I do see a move away from globalisation into specialisation, and localisation. In my home town of Brighton, when I go to where my local coffee shop [is], there’s a Starbucks 50 yards away but the local small coffee operator is twice as busy. People like the idea of a more local operation. The customer doesn’t want to go to the same places. This is what the internet is bringing us. It’s led to more knowledge and specialisation.” Wade had a warning, though, for those who think they can replicate Boxpark. “There’s guys who think they’re going to turn up, call it a food hall, and the money comes rushing in,” he said. “Maybe the thing that separates us from the rest is we realise it’s not just about the eating and drinking, it’s about how you operate the space.” This is something that could also be translated across to dining chains, where consumers are increasingly looking for beautiful surroundings, excellent service, or a social element to get their money’s worth. “There’s fallout from the customer looking for an all-encompassing dining experience,” added Wade. “They want to eat, drink and play.”

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