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Morning Briefing for pub, restaurant and food wervice operators

Thu 17th Sep 2020 - Propel Thursday News Briefing

Story of the Day:

Loungers reports order at table now accounts for 42% of sales – from standing start: Loungers has reported customer orders using a web-based order-at-table app have reached 42% of sales since lock-down – from a standing start. Chief executive Nick Collins told Propel the company has resisted using an order-at-table app before lock-down because it would reduce interaction with staff. Instead, interaction is happening at the table rather than the bar. “Covid forced our hand on this,” he said. On Wednesday (16 September), Loungers reported like-for-like sales up 29.8% in the ten weeks since reopening on 4 July, boosted by the VAT cut and Eat Out To Help Out. Of the latter, Collins said it has produced “one of the most astonishing periods we have ever witnessed in our careers”. He paid tribute to Loungers staff who “flogged their guts out” to cope with volumes of business generated. Collins added the company had also seen no reduction in business over the remainder of the week during August. A note from sector analyst Liberum stated: “Loungers removed a lot of soft furnishings to increase table spacing without a dramatic reduction in covers – a circa 10% to 15% reduction. It has also introduced bespoke timber partition screens to separate ‘social bubbles’ and introduced other covid-secure protocols to keep staff and customers safe without damaging (and in some ways improving) the levels of hospitality and atmosphere. Loungers reopened with a streamlined menu easing pressures back of house and on supply chains. A decision that also helped deal with the surge in volumes during the Eat Out To Help Out campaign.” Collins said the company had reduced Lounge menus by circa 15% and Cosy Club menus by circa 20% and is now “starting to gradually increase” item numbers. Collins told Propel the company had circa 170 different property landlords and had engaged in discussions at the start of lock-down over how to “share the pain”. He said: “The majority have engaged in conversation and reached agreement with us. Some haven't and we would urge them to do so.” It is an area that still requires government intervention, he added.

Industry News:

CACI research highlights a tale of two cities in the capital: The full extent of the disparity between central London and the rest of the capital as the UK gets to grips with the “rule of six” has been highlighted in new research by CACI, the marketing, technology and data company. Since lock-down was lifted on 15 June, CACI, in partnership with Location Sciences, has been tracking how consumers in the UK are moving, and data from the week ending 6 September, showed marked contrasts in the capital. In the key worker hubs of Holborn and the City, movement levels are just 24% and 20% respectively compared with pre-covid levels. While parts of the West End now exceed more than 50% of pre-covid movements, the cause of the issue appears to be an unwillingness to use public transport, CACI said. Four of London’s busiest stations – King’s Cross, Euston, Victoria and Waterloo – are at an average 25% of movements versus pre-covid. By contrast, local retail destinations throughout London are thriving, with consumer movements in many locations back to 100% of pre-covid levels. Due to this, movements in London, overall, are now within seven percentage points of the national average, which stands at 78% compared with pre-covid levels for the third consecutive week. The focus on local destinations in the capital is reflected in patterns nationally as well, with movements in a local areas now the same as movements out of communities. This indicates a re-balancing of consumer activity as the holiday season ends and consumers return to making shorter, more local journeys, CACI said. Director Alex McCulloch said: “Much is being said by a number of leading figures and industry bodies about the plight of central London, which is indicative of the situation in most cities in the UK. These latest numbers, however, which record consumer movements in the week schools returned and Eat Out To Help Out finished, show the stark reality. While the capital’s local neighbourhoods are clearly thriving in the new term-time reality, central London is a shadow of its former self.” The research follows previous analysis by CACI of the value of workers to retailers, restaurants, cafes and bars. London accounts for 18% of all retail and food and beverage spend in the UK – 33% of worker spend in the country is from people working in London locations. This equates to more than £3bn annually. Further, six of the top ten locations for worker spend in the UK are in the capital, while more than half of the top 50 worker spend locations are in London. The London locations in the top 50 are also more heavily reliant on worker spend than their counterparts across the country. The average worker spend per location outside London is £64m, or 24% of total spend. In the capital, the figures rise to £73m and 41% respectively.
CACI is a Propel BeatTheVirus campaign member

UKHospitality – 9pm curfew would cause serious harm and damage: An arbitrary 9pm curfew for hospitality business would cause serious harm and damage for the sector, UKHospitality chief executive Kate Nicholls has said. Nicholls was responding to a report in The Sun, which said pubs could be forced to shut at that time if the government’s new “rule of six” initiative fails to stop the recent rise in coronavirus infections. A source told the newspaper: “Curfew is hurtling up the agenda.” Pubs closing early was also “a tool in the armoury actively under consideration”, another added, though it was not “imminent”. Nicholls told Propel: “Pubs and restaurants are working extremely hard and taking every precaution to keep everyone safe, ensure social distancing is maintained and deliver effective test-and-trace data capture, in venues. Our sector is very willingly taking these important steps to help tackle covid, and is doing so at great expense. It is difficult to see how an arbitrary 9pm curfew could help. What is more certain is the very serious harm and damage it will do to businesses that have already taken a battering, and the impact on jobs, which, again, is already very significant.”
UKHospitality is a Propel BeatTheVirus campaign member

Saxo – deflationary pressures are hitting UK, Eat Out To Help Out pushes CPI to 0.2%: Deflationary forces are intensifying in the UK, following the slump in inflation last month to a near five-year low, Christopher Dembik, head of macro analysis at Saxo Bank, has argued. He claimed it was a serious worry, given the problems building across the UK economy. Dembik said: “The direct consequence of low inflation is it adds pressure for the Bank of England to widen its support to the economy as the risks of a hard Brexit or thin deal (which is currently our best-case scenario) are looming. In July, the official UK Consumer Price Index (CPI) figures surprised on the upside with the biggest driver being a strong rise in fuel prices (petrol and diesel) following a significant increase in demand as the UK and many other countries began to reopen their economies. In August, the UK CPI was down again, confirming deflationary forces are intensifying in most countries in the wake of the pandemic. The CPI is down to 0.2%, which is the lowest level since the end of 2015, from 1% in the previous month, while core inflation is also down to 0.9% from 1.8% in July. The Eat Out To Help Out scheme implemented by the government to incentivise customers to eat in restaurants and other eating establishments by pushing down the cost of dining out remains the most important deflationary driver (it reduced the CPI by 0.5% on its own) along with air fares that fell for the first time on record in August.” Dembik also predicted a sharp surge in unemployment will keep prices low, as some families simply won’t be able to afford as much: He added: “In the short term, inflation will likely stay subdued as the pandemic scars remain. Rising unemployment, which will probably increase much further in coming months as the furlough [scheme] is coming to an end in October, will push households to cut their spending, thus putting increased downward pressure on prices. The lowest point for inflation in covid-19 times has certainly been reached, but we are not getting out from prolonged low inflation anytime soon.”

NTIA – ‘impending collapse’ of night-time economy will double ONS job losses total: The “impending collapse” of the night-time economy is set to add hundreds of thousands of job losses to the Office of National Statistics total, the Night Time Industries Association has warned. ONS figures show a sharp drop in employment of 695,000 jobs since March 2020, but the NTIA warned more than 700,000 more jobs in the sector could be lost within weeks without urgent government intervention. A recent survey of NTIA members found 71% of businesses are set to make more than half of their workforce redundant in a matter of weeks and almost 60% felt they would be unable to survive longer than two months without further government support. The NTIA said, without action, the end of the furlough scheme will act as the final blow for the industry. NTIA chief executive Michael Kill said: “While these unemployment figures are harrowing, they come as no surprise. The night-time economy alone has been hugely damaged by the coronavirus pandemic and is on the brink collapse and an onslaught of redundancies. The end of the furlough scheme is fast approaching, and our industry is one of few without a ‘roadmap’ to reopening or sector-specific support. The end of the Coronavirus Job Retention Scheme will come as the final blow to thousands of businesses struggling for survival. We are reaching a critical point and without decisive and comprehensive action from the government, businesses will be forced to make tough decisions about their futures and those of their staff.”

Bibendum – 32.5 million Brits visited the on-trade during August, ten million more than in July: Drinks distributor Bibendum Wine and owner C&C Group has claimed 32.5 million people have visited UK pubs, bars and restaurants – a ten million rise from July. Its research also said 42% of survey respondents are planning to visit again within a fortnight, which includes 2.4 million adults who have not ventured out since lock-down began in March. Research highlighted that 25 to 34-year-olds had driven much of the on-trade business in August with the Eat Out To Help Out scheme undoubtedly bolstering those numbers (71%), but 20% more 35 to 44-year-olds and over-55s ventured out in August versus July. Over-55s, being the least discount-minded age group, are likely to have been tempted out by the reassurance that it is safe to do so. Some 39% of over-55s now feel comfortable dining in venues indoors when in pubs, bars and restaurants, up from 27% at end of July. As consumers get used to dining out in the new normal, more are planning to go out again (42% up from 33% in July), possibly thought to be driven by increased confidence (44%) and also laziness when it comes to cooking at home (25%). A fact that is likely to benefit community pubs and restaurants in suburban areas as consumers continue to avoid public transport (65%). Bibendum also claimed on-trade health and safety restrictions may have helped with upselling drinks because the shift towards table service means there are more opportunities for staff recommendations as the back bar becomes less important. As more operators use table service apps, there are also chances to add descriptors and images to encourage consumers to try something new.
Bibendum is a Propel BeatTheVirus campaign member

Eat Out To Help Out scheme may have had lasting effect on UK diners says TripAdvisor: TripAdvisor has said online searches for places to eat in the first two weeks of September is in line with the same period in 2019. Comparing year-on-year traffic volumes on TripAdvisor, traffic to UK restaurant pages in the first two weeks of September dipped slightly compared with the August peak, when Eat Out To Help Out was in full swing, but still gained 38 percentage points compared with the first two weeks of July and 67 percentage points compared with the first two weeks of June. Martin Verdon-Roe, general manager, Hospitality Solutions at TripAdvisor, said: “The early signs are that Eat Out To Help Out may have had a lasting impact on diner confidence, with people returning to their favourite restaurants even after the government scheme ended. Some of that may be down to restaurants voluntarily extending the discount, but it is also likely a sign that once diners feel comfortable enough to take that first step back into a restaurant, they will keep coming back.” TripAdvisor research also discovered four UK locations had made it onto its Top Ten Inbound European Destinations for Autumn 2020. Bowness-on Windemere in Cumbria was second – only Belek, Turkey, was searched for more. While Scarborough, North Yorkshire; Llandudno, north Wales; and Windemere, Cumbria; placed eighth to tenth respectively.
Consumers still looking to celebrate Christmas, even in smaller teams: Four out of five consumers are still either definitely (27%) or probably (52%) looking to go out for a Christmas meal or drink – even if it has to be in smaller teams, according to research by guest experience management expert HGEM. The findings showed men are more confident than women in doing so, as 85% and 77% respectively would either definitely or probably take part in a small team Christmas party. In terms of age, that percentage increases to 92% among 18 to 25-year-olds. There is little deviation from the group median (79%) in other age groups – the only exception being the 56 to 65 age category, which is slightly more cautious (71%). HGEM managing director Steven Pike said: “December is a key time for hospitality businesses, and bookings would normally be in full flow by now. This year is clearly different but, as our research suggests, celebrating Christmas hasn’t been cancelled. In some respects it may even be easier to manage than normal since group sizes are all likely to be six or fewer.”

Pubs and restaurants in Welsh borough subject to 11pm curfew after coronavirus cases rise: Pubs and restaurants in the Welsh borough of Rhondda Cynon Taf have been ordered to shut at 11pm from Thursday (17 September) and people will be banned from meeting other households. Restaurants, bars and other licensed venues will have to shut early to stop the spread of the virus after a spike in cases, but they will be allowed to remain open in the day for now. The area now has the highest rate of infection across Wales – with a rate of 82.1 per 100,000 people testing positive in the past week. People will only be able to meet with others outside. Health minister Vaughan Gething said: “We have seen a rapid rise in cases in Rhondda Cynon Taf in a very short space of time, linked to people socialising indoors and not following social distancing guidelines. We now have evidence of wider community transmission in the borough, which means we need to take urgent action to control and, ultimately, reduce the spread of the virus and protect people’s health.”
Job of the day: COREcruitment is seeking a general manager for a leading restaurant group. The company is well regarded in the industry and offers fresh food and a creative dining experience. This is an excellent opportunity to lead a high-volume site covering three floors in central London. The restaurant group is ideally looking for a candidate at operations manager level and understands the importance of leadership, with the individual having up to seven direct reports. The company is looking to attract a candidate from a business where people and culture is at the heart of its values. The position is paying up to £80,000 base with a good package. Anyone interested can email
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Itsu opens ‘Store of the Future’ concept, ‘we will lead and many will follow’ says Metcalfe: Itsu, the healthy Asian food chain, created by Pret A Manger co-founder Julian Metcalfe, has opened its first site under its “Store of the Future” concept using the latest robot technology, which it believes sets a template for high street and fast food dining to spark a post-covid recovery. As revealed by Propel last month, the first site under the new concept has opened in London’s Great Portland Street, and the company said there are more to follow across the UK. It said the new store design was completely reimagined in secret during lock-down, specifically for today’s post-covid world. “Leaner and healthier than any Itsu store before it”, the store is the brainchild of Metcalfe and was designed to limit touchpoints in part thanks to the use of sushi robots and digital ordering technology. Unlike any other Itsu, the Great Portland Street store is completely digital. There is a single customer collection point and no front-of-house fridge so multi handling is reduced. The new order-and-pay screens use the latest technology with card only payments, and enable customers’ orders to be placed in under 40 seconds, and allow diners to customise their favourite Itsu hot dishes. The company said further developments to future-proof its on-site kitchen include new maki and nigiri sushi robots from Japan, designed to “guarantee consistency, productivity, and perfect results every time”. Traditionally, sushi chefs mould nigiri by hand, but Itsu said its “advanced robot technology removes unnecessary handling, decreases food wastage and increases speed time for production, as one Nigiri robot can make 4,800 pieces in an hour”. At the same time, the company said its latest and healthiest menu “heroes the anti-fried food solution now being promoted by the government to combat obesity and help the nation become more resilient to the risks of covid-19”. It includes more than 70% of dishes under 500 calories, with more than a third of the menu now plant-based. Metcalfe said: “I’ll put in whatever it takes to continue Itsu’s success despite the obstacles posed by covid. Little expense has been spared on this store of the future – it’s top-class stuff that would not look out of place in Kyoto. It’s far more than a business, it’s an absolute crusade. Not since the 1950s has fast food caught up with changing tastes and nutrition needs. It’s a start. We will lead and many will follow.” Earlier this month, the company told Propel it was looking to, and investing in the future, after its company voluntary arrangement was approved.

Oakman Inns secures £2.75m CBILS: Oakman Inns, which manages 28 pubs and restaurants across the Midlands and Home Counties, secured £2.75m as part of the Coronavirus Business Interruption Loan Scheme (CBILS) during lockdown. The company secured the additional finance from Santander UK. Oakman’s chief investment officer Steven Kenee said: “While the enforced closure was incredibly tough for all our team, we are delighted to have secured the funding from Santander. When combined with the ongoing support from our shareholders, the recent government initiatives and an excellent start to trade, it has put the business in a very strong position from which to both weather any future shocks and, importantly, to continue to grow. I would like to thank both Paul Ray at Browne Jacobson and Paul O’Reilly at Santander for their collaborative approach during the closure period.” Paul O’Reilly, portfolio management at Santander UK, said: “The hospitality sector, more than most, has felt the damaging economic effects of covid-19. We are delighted to support Oakman Inns & Restaurants with this much-needed cash flow facility to ensure the business remains on a strong financial footing and can continue to grow.”

PizzaExpress reopens redesigned Bankside site with dedicated cocktail and espresso bar: PizzaExpress has relaunched its site in London’s Bankside following an extensive refurbishment, under its new-look design. The site becomes the brand’s second to include a dedicated cocktail and espresso bar, after the group’s restaurant in Langham Place, Oxford Circus. The Zoe Bowley-led company said the renovation took five months to complete and is the latest in several new-look restaurants opening across London for the business, alongside The Strand and Abbey Road. The open kitchen now takes centre stage at the heart of the Bankside restaurant, which originally opened in 2003, with a choice of different dining experiences offering across two floors and a terrace for up to 167 diners. In addition, a dedicated bar and lounge area has been developed to offer an alternative space for occasions outside of mealtime. Bowley, managing director at PizzaExpress, said: “The refurbishment of our Bankside pizzeria is one of our biggest yet, and we’re absolutely thrilled with the final look. With such a great destination on our doorstep, our design team has maximised the space so that we can best serve customers whether they’re visiting to enjoy their menu favourites, or a more relaxed visit for a drink with a friend. Feedback from customers and the team has been wonderful so far, so we’re looking forward to welcoming more customers back.”

Island Poké using Little Yellow Door site for dark kitchen in Notting Hill: Island Poké, the London-based, White Rabbit Fund-backed business, has teamed up with Little Yellow Door to launch a dark kitchen from its site in Notting Hill. The James Porter-founded business offers click and collect and delivery on Wednesdays to Sundays out of the site in All Saints Road. It is the second dark kitchen site for Island Poké, which currently has seven of its eight stand-alone sites back open. It also operates a dark kitchen site with Jacuna in Battersea. The company also plans to further expand its delivery reach across London, with other dark kitchens in more residential areas such as Camden, which is thought to be in the pipeline.

Bettys & Taylors ‘fares well’ during covid-19, registers record-high full-year turnover figures: Family-owned Bettys & Taylors Group has said it has “fared well” during the coronavirus pandemic as it reported turnover growth of 9% – up to £227.4m – for the year ending 31 October 2019. Operating profit was also up by £4.6m to £15.8m. The Harrogate business comprises six tea rooms, a cookery school, tea and coffee merchant Taylors of Harrogate and an online operation. Director Clare Morrow said in the company’s signed statement the business has invested £13.4m in plant, machinery and IT systems in the latest financial year. She added Bettys & Taylors has fared well during covid-19 because, as an “essential business”, demand has remained high despite the closure of its face-to-face businesses. Morrow added: “We have made many changes at our factory and distribution warehouse as we adapt to government advice. These changes have enabled us to maintain an uninterrupted supply of our products to supermarkets and, through the plans we put in pace, we will ensure this continues.” Profit before tax was £13.9m, up from £10.6m the previous year. The company had 1,598 employees at the end of its financial year – a rise of 136 from 2018. It also stated its eco-friendly outlook and said its long-term Trees for Life campaign has helped plant three million trees while it has also signed up to UK Plastics Pact to eliminate unnecessary plastic use and increase recycled and reusable plastics.
Star Pubs & Bars sees return to record-high pub application numbers: Heineken-owned Star Pubs & Bars has registered a return to record-high applications to run its pubs – signalling a boost to post-lock-down confidence in leased and tenanted (L&T) sector. The numbers of people applying to run Star Pubs & Bars sites have reached the highs of 2019 levels. Even during lock-down, the company was receiving around 30 applications a week. It is also claimed the quality of applicant is higher too with a greater proportion being experienced in the licensed trade. Additionally, confidence in the market has been compounded by the fact that of the 29 L&T pubs where Star Pubs & Bars had joint refurbishments under way pre lock-down or planned for later in the year, all but one operator has chosen to proceed. Star Pubs & Bars recruitment manager Hance McPherson said: “Our estate is primarily suburban community locals and drive-to destination pubs, which is where operators see the opportunities. People are working from home more and travelling less on public transport, and so are opting to stay local. This is great news for pubs in these locations, which are premiumising their offers, and for the refurbishment projects we are undertaking as they meet this demand and so are encouraging licensees to invest. Applicants are mindful of the immediate challenges that pubs face but have confidence in the long term. During lock-down, they were able to research the market thoroughly and put together well-thought-through business plans. The result is pent-up demand from quality applicants.” Michael Thomas, managing director of The Rosecare Pub Company, which recently opened The Beacon Hotel in Burton-upon-Trent, Staffordshire, added: “Knowing that The Beacon would be the type of pub that would flourish post-pandemic gave me the confidence to proceed with my investment in the refurbishment with Star Pubs & Bars. The Beacon has proved very popular with the community since reopening as it provides great quality on the doorstep, which is what people want.” Since lock-down, Star Pubs & Bars has invested £25m supporting its 2,300 leased and tenanted pubs.
Deliveroo for Business launches a new ‘special events’ range: Deliveroo for Business, the corporate arm of Deliveroo, has unveiled an exclusive special events range, in collaboration with leading partners including Patty & Bun, Pizza Pilgrims and Owen Brothers. The company said the launch of the new range follows a 10% surge of orders in corporate home delivery since February, as businesses seek new ways to “provide food perks to their employees while they work from home”. A recent poll by Deliveroo for Business showed 27% of its clients who took part in the survey will not return to the office for at least three months, and 51% will stagger a reduced workforce. It also found that 32% of respondents have started returning to the office, and 29% are planning to do so this month. Juan Diego Farah, global head of Deliveroo for Business, said: “We are delighted to announce a new ‘special events’ range with leading restaurant partners. The new range is in response to corporate demand and will ensure that we play our role to help businesses support their employees as they continue to work from home. Deliveroo for Business has seen huge growth during the covid-19 pandemic and we are focused on working with as many businesses as possible to ensure they can help their staff feel valued and boost morale, especially as many traditional office events have been cancelled.”
Mindful Chef reports 424% year-on-year sales increase: Healthy recipe box service Mindful Chef has reported sales are up 424% year-on-year so far in September. The company said in the first week of the month, sales of its frozen ready meals tripled and sales of its new “speedy” range of recipes also spiked as the government’s Eat Out To Help Out scheme ended and children returned to school. Mindful Chef added 69% of new customers cited they had joined for health reasons, as well as the “quality of ingredients” and the “convenience of the service”. Co-founder Giles Humphries said: “While the importance of a healthy diet is widely recognised, it is clear a huge proportion of us have re-evaluated our health and lifestyle during lock-down and we are now actively prioritising this and making positive steps forward.”
Young’s makes directorate change: Pub operator Young’s has announced information resources director Torquil Sligo-Young is retiring as an executive director on Wednesday, 30 September 2020, and will become a non-executive director. He will also be joining the company’s audit and remuneration committees. Chairman Stephen Goodyear said: “I am delighted Torquil has agreed to remain on the board as a non-executive director and continue as chairman of the trustee company that manages our final salary pension scheme. He will also remain as chairman of the long-established charitable trust set up by one of the founders of the business and, importantly, will continue to liaise with members of the Young’s family who, as major shareholders, are so supportive.”
Suburban Green restaurant and bar signs for second site in north west: North west-based restaurant and bar operator Suburban Green has taken its second site, promising to bring a “premium hospitality experience”. Suburban Green, which was launched in 2017 by Martin Lowe and Cal Gregg-Williams, has signed on a venue in Beech Road, Chorlton, Greater Manchester, to join its sibling in Wilmslow, Cheshire. The new space is a 10,420 square foot property, taken a 15-year lease through international real estate adviser Savills. Suburban Green co-founder Martin Lowe said: “Acquiring what we feel is one of the most prominent properties on Beech Road, this site is exactly the location we want to continue the growth of Suburban Green. Our mission is to deliver a premium hospitality experience to our customers on their doorstep.” Savills Manchester licensed leisure and hotels director Tom Cunningham added: “In spite of the challenges brought about by covid-19, Chorlton remains a sought-after location for bar and restaurant operators with its high-quality offering and affluent residential neighbourhood. Beech Road is the perfect location for Suburban Green’s second site, complementing its existing restaurant in Wilmslow, and will add further to the high calibre of independent operators already in the area.” The original site in Wilmslow is a small plates restaurant, cocktail and wine bar.

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