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Morning Briefing for pub, restaurant and food wervice operators

Thu 22nd Oct 2020 - Update: More support, customer ID, Langan’s Brasserie and Chipotle
More support for the sector planned by Sunak: Rishi Sunak is poised to announce extra help for pubs and restaurants struggling to survive in areas under Tier two coronavirus restrictions, The Daily Telegraph has reported. The newspaper stated: “The Chancellor is understood to be working on a compensation package for thousands of businesses whose trade is restricted by government regulations after they complained of being left in limbo without support. While firms such as pubs in Tier three that are forced to close by law can access business grants and the two-thirds wage subsidy, those in the next tier down cannot because the law does not force them to close. It means hospitality venues across large areas of the country in which the 10pm curfew remains in force and indoor mixing between households is banned can only access the less generous part-time subsidy, which still requires them to contribute 55% of wages. The mismatch has led to warnings from senior business leaders and MPs that thousands of companies are ‘stuck between a rock and a hard place’, with hundreds of thousands of jobs in hospitality now at risk in the run-up to Christmas. Sunak is expected to announce more funding for businesses in a statement to the Commons on Thursday. The UK’s national debt hit a record £2.06 trillion at the end of September, the Office for National Statistics announced on Wednesday. Borrowing now stands at 103.5% of gross domestic product, a level not seen since 1960. One option believed to be under consideration would involve widening the eligibility of the Job Support Scheme to include firms required to shut by ‘circumstance’ rather than by law. This could also be applied to the cash grants, meaning firms that choose to shut because they are no longer commercially viable could receive up to £3,000 a month. Alternatively, business groups have suggested Mr Sunak increase the generosity of the part-time wage subsidy and remove the hefty employer contributions. The Chancellor will meet leaders of the UK hospitality industry in a London restaurant at 8am this morning (Thursday) to brief them on the details of the new economic plan before announcing it in the Commons.”

Police withdraw advice urging pubs and restaurants to ask customers for ID: Scotland Yard has made a u-turn on urging pubs and restaurants to snoop on customers to ensure they stick to lock-down rules. The Metropolitan Police faced a backlash and even the threat of legal action from hospitality industry chiefs after sending letters asking struggling operators in London to ask for the names, addresses and photo IDs of their customers. Officers had hoped such a move would discourage households from mixing in the capital’s pubs and bars, after Tier two restrictions were introduced last weekend. But now Scotland Yard says it has withdrawn the letter – saying “it does not reflect the force’s policy”. In a statement seen by the Daily Mail, a Metropolitan Police spokesperson said: “Yes, we have withdrawn the letter. The force will be in contact with the recipients of the letter to clarify that the advice, although well-intentioned, does not reflect our policy.”

Langan’s Brasserie facing administration: Langan’s Brasserie, the London-based restaurant once co-owned by the actor Michael Caine and famous as a 1980s celebrity haunt, is teetering on the brink of administration. Up to 100 jobs are at risk at the brasserie, which was opened in 1976 by Caine and the restaurateur Peter Langan. According to The Guardian, the company behind the restaurant, in Stratton Street, Mayfair, has filed a notice of intention to appoint administrators. The financial advisory firm Begbies Traynor has been lined up as potential administrator and is understood to be in talks with a number of possible rescuers, thought to include Richard Caring, owner of The Ivy restaurant.

Chipotle reports digital sales triple year-on-year and now account for almost half of sales: Chipotle’s US revenue in the third quarter to 30 September was $1.6 billion, an increase of 14.1% compared to the third quarter of 2019 and includes an 8.3% increase in like-for-like restaurant sales. The company stated: “Comparable restaurant sales were strong in each month of the third quarter with August being the high point. Sales trends remained strong in September even though beginning mid-month we rolled over the successful 2019 Carne Asada program. Beginning mid-September comparable restaurant sales impressively delivered mid-single digits and this trend has continued in October. Digital sales grew 202.5% year over year to $776.4 million and represented 48.8% of sales. About half of the digital sales were via delivery, benefiting from our expanded partnerships, with the remainder coming from order ahead transactions as guests better understand the value offered by this channel, as well as the convenience of more Chipotlanes.” Brian Niccol, chairman and chief executive, said: “I have never been more confident that Chipotle is a powerful brand committed to fostering a culture that values and champions our diversity, while leveraging the individual talents of all team members. As a result of a strong brand, committed employees, and broad financial strength, we remain excited about Chipotle’s powerful economic model and our long-term potential.”

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