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Morning Briefing for pub, restaurant and food wervice operators

Wed 13th Jan 2021 - Propel Wednesday News Briefing

Story of the Day: 

US restaurants and bars able to apply for loans that convert to grants under revamped Paycheck Protection Programme: US restaurants and bars are able to apply for loans that will convert into grants under the revamped Paycheck Protection Programme (PPP) – provided certain requirements are met. Operators can apply for a “second-draw” PPP loan if they meet all of the following criteria – their gross receipts declined by 25%; they were open for business by 15 February 2020, except for seasonal employers; they have fewer than 300 employees per location (first-time borrowers can have up to 500 employees per location); and they are not a publicly traded company. The forgivable loan is calculated at 3.5 times their monthly payroll, up to $2m. First-time borrowers can receive up to $10m. Those loans will convert to grants if businesses abide by a variety of strict requirements. These include spending at least 60% of the funds on payroll and maintaining their employee headcount. Loans under $150,000 will have shortened forgiveness applications, in an effort to attract borrowers who can’t afford to employ professional accountants. Restaurants will also be able to use non-payroll funds to pay their suppliers for current or previous orders of “perishable goods” or “worker protection measures” such as drive-thru windows, air ventilators, health screening, and even outdoor dining build-outs. Businesses can elect to use the PPP funds over either an eight-week period, or stretch it out over a longer 24-week period. Any non-forgivable portions of the loan carry an interest rate of 1% and must be repaid within five years. Congress has made $284bn available through the revamped PPP, specifically targeting the hospitality industry for extra help – and setting aside aid for low-income communities and first-time borrowers who were shut out from funding last year. The debut $350bn round of funding last April was exhausted in under two weeks.

Industry News: 

Supreme Court reveals date for FCA business interruption insurance judgement: The Supreme Court has revealed its judgement for the appeal of the Financial Conduct Authority (FCA)’s test case on business interruption insurance relating to the covid-19 pandemic lockdown will be handed down on Friday (15 January). An update on the court website said a judgment will be handed down at 9.45am. The judgement will be available to view live via the Supreme Court website. This judgement is the result of the four-day hearing that started on 16 November after six insurers – Arch Insurance, Argenta, Hiscox, MS Amlin, RSA, and QBE UK – and a policyholder action group joined the FCA on the appeal, which seeks to clarify whether policy wordings cover the business interruption caused by the nationwide coronavirus lockdown last March. The decision upheld by the Supreme Court will be the final say in the matter and could potentially impact 700 types of policies, 60 insurers, and 370,000 policyholders, including thousands of hospitality businesses whose insurers declined to pay out following the enforced closure of premises, resulting in billions in claims.

Hospitality sales fall more than 50% in 2020: Hospitality sales fell 51.38% in 2020, characterised mainly by a 98.3% decline in the second quarter driven by the first lockdown, according to analysis from S4labour, the online labour-scheduling management system from Catton Hospitality. In the first two months of the year, prior to the effects of the pandemic, revenue growth was 6.6%. As pubs and restaurants opened up from 4 July, consumers were hesitant leading to low demand levels, and revenue was down 50.9%. Overall, London was more affected, with a revenue decline of 56.0%, with sales outside the capital performing better, at a decline of 50.2%.
S4labour is a Propel BeatTheVirus campaign member

UKHospitality to press Welsh government for further support amid trading restrictions as £180m fund for covid-hit firms opens: UKHospitality Cymru has said it will continue to press the Welsh government for further support while trading restrictions remain as a £180m fund to support tourism, hospitality and leisure businesses launches. The Economic Resilience Fund package will open for applications at noon on Wednesday (13 January). The fund will remain open for two weeks or until funds are fully committed. The funding, announced in December, is part of a live £450m package of support the hospitality, leisure and tourism sectors as well as their supply chains can access and will provide vital support to thousands of firms impacted by level three and four restrictions. The £180m is in addition to a £270m support package for businesses that pay non-domestic rates, which includes non-essential retail businesses, and is being delivered via local authorities. Welsh government estimates under the package of support a typical hospitality business in the country with the equivalent of six full-time staff could be eligible to receive between £12,000 and £14,000 in total. Economy minister Ken Skates said: “Our package of support is the most generous in the UK and since the beginning of the pandemic more than £1.6bn of Welsh government financial assistance has reached businesses. Many hospitality, tourism, leisure and non-essential retail businesses have already received payments of £3,000 or £5,000 in the past month and this additional funding will be absolutely crucial in supporting eligible businesses through the difficult weeks ahead.” UKHospitality Cymru executive director David Chapman said: “We will continue to press for additional funds to help with extended lockdown. After almost a year of little or no trading we now need additional help to carry the companies and their workforces through to the better days we hope will be ahead soon. We call on Welsh government to put together a further package to operate from the end of the month if severe restrictions on trade are to continue.”

Virtual events firm Feast It raises £1.7m: Feast It, the event booking market place that has previously been funded by Ascension Ventures and Guy Berryman of Coldplay, has raised £1.7m in a funding round led by MAHR Projects; former Co-op chief executive Richard Pennycook; and Tim Score, ex-chief financial officer of Arm Holdings. Feast It has seen explosive growth in virtual events towards the end of 2020, when the company received £2m of enquiries in its first month of operating in the space in November. Launched in 2017 by childhood best friends Digby Vollrath and Hugo Campbell, Feast It is known as a platform through which customers can book caterers and mobile bars for events and has been described as the “Airbnb of catering” by the Financial Times. Feast It has now expanded into virtual events, including cooking lessons, cocktail classes and escape room challenges and will use the funds to further grow its virtual event product. Further, the company has built out its product for in-person events such as weddings, large birthday parties and corporate events, and has added new types of hand-picked event suppliers, including photographers, videographers, marquees, staffing companies and florists. Vollrath said: “There was a big shift in people’s attitudes towards virtual events in the latter half of 2020, as people realised interactive activities such as cooking classes, escape rooms or cocktail making lessons can be engaging and great fun. As we go into another lockdown and the continuation of remote working, virtual events are here to stay and we’re going to make sure the very best experiences are available on Feast It.”

CAMRA – particularly encouraging to hear government minister say hospitality industry should not be scapegoated: The Campaign for Real Ale (CAMRA) has said it is “particularly encouraging” to hear the government say the hospitality industry should not be scapegoated during the ongoing covid-19 pandemic. It comes after small business minister Paul Scully highlighted the work done to make venues covid-secure and stated, despite lockdown restrictions, “that is not to say that hospitality in itself is the vector for transmission”. Scully made the comments as MPs debated public petitions on Monday (11 January) on support for the industry and whether to create a minister for hospitality to represent the sector in government. He said he believed the value of the industry came not only to the economy – but also in supporting mental health and well-being, social cohesion and cultural integration. CAMRA national chairman Nik Antona said: “It was particularly encouraging to hear the government’s small business minister recognise all the hard work and investment that has gone into making pubs and hospitality businesses covid-secure, and his belief the sector shouldn’t be scapegoated. It’s important to make sure the government encourages and allows everyone to socialise safely in our pubs, clubs and taprooms once restrictions are lifted.”

PCA approves pubs code declaration and publishes open letter reminding tied tenants of their rights: The pubs code adjudicator (PCA) has approved a declaration that pauses and preserves key code rights during this latest period of restrictions and has written an open letter to tied tenants to remind them of their rights. The declaration is on identical terms to and has the same effect as the previous two declarations that were agreed by regulated pub companies. The declaration period will run from 6 January to 31 March inclusive, subject to review. The declaration effectively “stops the clock” on some significant pubs code deadlines that apply to tenants making arbitration referrals during this emergency period, and provides safeguards relating to specific Market Rent Only rights. This does not however prevent a tenant from taking code steps during this period if they so wish. The pubs code is not suspended during the emergency period and the PCA has published an open letter to tenants to help them find out more about how the code can support them, particularly during this time. The PCA said it has engaged with some tenant representative groups to verify these measures and would continue to engage with the regulated pub companies “to ensure they return to usual processes as soon as possible, and tenants can continue to benefit from their code rights”. The PCA said tied tenants should direct any queries to their code compliance officer in the first instance.

Hospitality suppliers urged to complete latest lockdown survey to form basis of next message to government: The UKHospitality Supplier Alliance has urged businesses to complete their latest supplier survey ahead of it closing at midnight on Monday (18 January). The alliance was formed to push for government support to help hospitality supplier businesses alongside any steps it takes for venue operators. The survey seeks to quantify and crystallise the ongoing impact of the covid-19 crisis on the wider hospitality industry with a particular focus on the challenges suppliers face in accessing government support. The alliance said the greater the number and range of completions received, the stronger and more credible the message to government. To access the survey, click here.

London hotel market sees performance improve in December: The London hotel market saw performance improve in December compared with the previous month, according to the latest data from STR. Occupancy stood at 24%, which was down 70.3 percentage points on the previous year, while average daily rate fell 46.2 percentage points, to £85.58, and revpar dropped 84 percentage points, to £20.57. STR said each of the three key performance metrics were up from November, thanks to higher performance towards the beginning of December. However, with a new variant of the covid-19 virus and stricter lockdown rules, daily occupancy remained under 20% during the last half of the month. 

Michelin to announce UK and Ireland stars on 25 January: Michelin has confirmed the ceremony announcing the UK and Ireland’s latest additions to the guide will be held on Monday, 25 January. The ceremony, which usually takes place in October, will be streamed online from France due to the travel restrictions. As previously reported, the guide will also be a digital-only publication for the first time in its history. For the first time in years, the date change means the Great Britain and Ireland guide will be published in the same year it is representing.

Company News:

Creams to open debut Wales site this month: Dessert parlour operator Creams is to open its first site in Wales, and 91st in total. Set to open in Cardiff’s Queen Street on Monday, 25 January, the company-owned store will initially offer takeaway and delivery only via Just Eat, Deliveroo and UberEats, opening for dine-in when restrictions allow. Creams chief executive Adam Mani said: “Despite the challenges of 2020, I am immensely proud the brand has been able to continue with its expansion plans.” Creams successfully pivoted its business in 2020 through the introduction of an online experience for delivery and click and collect. In October, the group reported a record-breaking October with sales of more than £4m across the estate. The brand has also opened three new stores since March 2020 with another five or six planned for the first quarter of 2021. Creams was founded in 2008 by Balal Aqil and Mani. The brand employs more than 1,400 staff and works with a variety of franchise partners across the UK.

Wadworth hires executive development chef to relaunch and manage food offer within managed estate: Devizes-based brewer and retailer Wadworth has hired Andrew Scott as executive development chef to relaunch and manage the food offer within its managed pub estate. Scott has spent his entire chef career in Michelin-starred kitchens, initially training at Mallory Court, Lords of the Manor and L'Enclume, before moving to the Curlew restaurant in East Sussex where he achieved a Michelin star in the 2014 guide. He represented the central region on BBC2's Great British Menu in 2016 and then moved into the world of food development and customer experience at Miele, a global appliance brand as head development chef. Scott will work across Wadworth’s managed pubs to create menus that offer British pub favourites alongside innovative new dishes and will be supporting business partners on their menus and food offer. He said: “People will be eager to get out and eat with family and friends so it’s key we get some fresh new dishes as well as those firm favourites customers always love ready in time for when we can all come back together.” Wadworth operations director Nick Young added: “This is great news for Wadworth and shows our conviction for the future. Having Andrew on board, with his expertise, background and passion for food will enable us to make pub food more exciting and take our menus to a new level.”

Korean barbecue brand Yori to open in Battersea for fourth London site: Korean barbecue brand Yori is to open a fourth site in London, this time in Battersea, Propel has learned. The restaurant will launch on the former Ginger Kiss site in Lavender Hill, joining the brand’s other sites in Covent Garden, Piccadilly and Wimbledon. 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 Café Mori in Wimbledon. Yori opened its latest site last month in Catherine Street, Covent Garden. Daniel Rogers, surveyor at Restaurant Property, secured the Battersea site for Yori, while Marc Rogers at MKR Property acted for the existing tenant. Yori’s other sites are in Panton Street near Piccadilly Circus and The Broadway in Wimbledon.

Chipotle commits to recruiting 15,000 US employees in national hiring event: Chipotle is hosting a national hiring event on Thursday (14 January) – “Coast to Coast Career Day” – with the goal of recruiting 15,000 employees in the US. The company has confirmed it will be mainly looking to fill both full and part-time store-level, hourly crew member roles. The hiring spree expands upon the company’s focus on internal growth last year, ending 2020 with 11,000 internal promotions. Marissa Andrada, chief diversity, inclusion and people officer, said: “We are fortunate to be experiencing growth during this time and want to safely provide an opportunity for purpose-driven individuals to join us on our mission of cultivating a better world.” In accordance with covid-19 safety precautions, the company is requiring advance registration. Prospective applicants have to secure an interview time online and both masks and social distancing are required during the interview process, which will take place at participating restaurants. According to Chipotle, more than 70% of general managers are hired through internal promotions.

Team behind Hackney restaurant Nest to launch site in Fulham: The team behind Hackney restaurant Nest is to launch a seasonal British restaurant in Fulham. Luke Wasserman, Toby Neill and Johnnie Crowe will open Fenn in Wandsworth Bridge Road in late March. Inspired by Fulham’s proximity to the Thames, Fenn takes its name from the old English word for “low-lying wetland”, symbolising the restaurants commitment to serving locally sourced, British seasonal dishes. Continuing the approach taken in its sister site, the restaurant will focus on “creative produce-driven cooking that celebrates the very best this country has to offer”. The main dining room is centred around a single hand carved ash wood table that seats up to eight guests with additional tables surrounding it. In the warmer months doors will be thrown open to create a broader terrace area, accommodating 14 diners while Fenn’s wine cellar will also double up as a private dining space, which seats up to 16 guests. Neill said: “I’m looking forward to opening the doors to Fenn and bringing a taste of what we do at Nest to west London. It’s been a tough few months but we’re excited to be opening and getting back to what we do best.”

Flower Burger confirms UK debut site set for London’s Fitzrovia: Milan-based vegan burger brand Flower Burger, which last year signed a master franchise agreement with London-based multi-brand multi-unit food and beverage operator Gerry’s Group to develop the brand across the UK, has confirmed it will open its debut UK site in London’s Fitzrovia. Propel revealed in November, the brand, which already operates 14 sites across Italy, France and the Netherlands, had secured the former Herman Ze German site in Charlotte Street. Flower Burger will launch on Thursday, 21 January for takeaway and collection only, with plans in place for full delivery service by early February. The company is on the hunt for further sites in central London. The partnership with Gerry’s, which was brokered by food and beverage business developer and franchise consultant Seeds Consulting, involves 45 openings in key cities over the next ten years. Founded in 2015 in Milan by Matteo Toto, Flower Burger is an “innovative vegan burger concept”. All burgers are produced from raw ingredients and without the use of additives in its central production facility and they are cooked in store to order. Gerry’s Group is a multinational company operating more than 30 Costa Coffee locations in the UK, as well as Wok To Walk franchises in the UK and IHOP restaurants in Pakistan. Toto said: “People do not always associate vegan food with fun and enjoyment. Flower Burger is about changing this perception, with a psychedelic brand and restaurant décor that fits a natural, great tasting and unique product that we produce ourselves. We have an ambitious and strong opening plan with the mission to bring a year-long summer atmosphere in all our future locations with passion and love. An inclusive, universal, colourful and playful love that spreads like music and brings cheer.” Kit Alexander at Etch acted on the Fitzrovia deal on behalf of the vendor, while Adam Bowers, of Stonebrook London, acted on behalf of Flower Burger.

Nerf laser combat attraction to open in Manchester: Rocafella Leisure Group, in conjunction with Hasbro, plans to open Europe's first Nerf Action Xperience, in Manchester. The company plans to open a £4.5m, 25,000 square foot venue in the Trafford Centre later this year. The site, which will feature laser tag-style entertainment, will become the second Nerf Action Xperience in the world, with the first opening in Singapore in 2019. Under the plans, three first-floor units at the recently revamped Barton Square at the shopping mall would be amalgamated to accommodate the laser combat entertainment venue. A 4,000 square foot mezzanine floor would also be constructed within the combined units. Consisting of 18,000 square feet, the brand’s Singapore site comprises a “high-octane” laser battle zone (including a zombie-infested city), a physical course combining the laser game with challenging obstacles and landscapes, and a “Create” zone where kids can shoot paint at merchandise such as t-shirts and bags.

Paul to offer free tea and coffee for NHS workers again: Artisan bakery Paul will be bringing back its free coffee and tea for NHS and emergency service workers from Wednesday (13 January). Paul first launched its “free hot drinks for NHS staff” initiative last year from March to July – and has so far supplied more than 5,500 free takeaway coffees and teas to those on the front-line. Paul UK chief executive Mark Hilton said: “The NHS and emergency services are working around the clock to get the nation through this pandemic, and by offering a free coffee or tea to help them get through a long shift is the least we can do to show our huge appreciation.” The bakery also continues to donate food to those in needs across London, as well as unsold bread and freshly baked bread pudding to London-based charity, The Felix Project, which distributes surplus fresh food to those that need it most.

Cornwall hotel sells off £3.5m guide price amid increasing staycation popularity: Meudon Country House Hotel and Bream House in Cornwall have been sold to Kingfisher Resorts Meudon, off a guide price of £3.5m, in a deal supported by property consultancy Savills. The freehold, four-star Manor House Hotel provides 30 en-suite bedrooms in eight acres of subtropical gardens that date to the 1800s. The hotel’s facilities include an AA Rosette restaurant, bar, lounge, tapestry room and studio. Harry and Val Pilgrim bought Meudon in 1964 and built the hotel, which opened in 1966. The sale encompassed Bream House, a substantial five-bedroom house in a private position on the headland with views over Falmouth Bay. James Greenslade, associate director in the hotels team at Savills Exeter, said: “With staycations rising in popularity, locations that can provide that right mix of experiences close to tourist destinations will continue to perform well and we expect demand for these assets to remain strong in 2021.”
Branston Hall owes creditors £1.36m: The company that owned Lincoln-based country house hotel and weddings venue Branston Hall has been wound up, owing almost £1.4m to creditors. Administrators from RSM were called in to South Springs at the end of November. The owners of Branston Hall called the decision to call in administrators a “devastating blow” and said they were “heartbroken”. Documents drawn up by administrators show South Springs owed £1.36m to creditors. However, on 14 December a resolution was passed to wind up the firm with a liquidator now appointed. Branston Hall Hotel, once a stately home for the Melville family, has 53 guest bedrooms and is three miles south of Lincoln. It sits within 88 acres of parkland and lakes.

Frankie & Benny’s and Iberica launch Veganuary options: Frankie & Benny’s, which is owned by The Restaurant Group, and Spanish restaurant group Iberica are among operators to have launched Veganuary options. Frankie & Benny’s Veganuary menu focuses on Italian-American dishes and has one new starter – BBQ Jackfruit Bites – as well as three mains – Plantball Hero Sandwich, the Tower Beet Burger and Pepperoni Pizza – and two desserts – Red Velvet Hot Cookie Dough and Creamy Oreo Cake. Meanwhile, Iberica has created a range of healthy vegan options to be enjoyed at home. The group have launched its Vegan Cook At Home DIY kit and Vegan Hamper, which are both available for nationwide delivery. Iberica have also added its vegan dishes on Deliveroo and its online shop. 

Startle grows bottom line and customer base: Interactive music provider Startle has reported its second profitable year after just four years of operation, growing Ebitda in 2020 by 44% to £720,000. The year also saw the beta launch of Studio, Startle’s new platform for managing and synchronising music, digital signage, lighting and other integrations. Studio gives operators “the power to replicate a perfectly curated atmosphere across an entire estate”. Startle founder and chief executive Adam Castleton said: “After an extremely challenging year for the hospitality and retail industries, like many suppliers we’ve had to make changes to our strategy, often taking a much more short-term view. With many of our customers closed throughout much of the year, we diverted much of our annual revenue into supporting those customers and securing the jobs of our team. Despite such a difficult year, I’m extremely proud we were still able to grow, supporting more operators in delivering exceptional customer experiences at scale. While safety has, of course, been the top priority for operators, our ‘Mind The Gap’ research has illustrated how increasingly important atmosphere is to the overall customer experience, in ensuring that customers want to return in the current climate. Our growth over the past 12 months comes from operators that are in-tune with this, and are investing in music and technology to provide a welcome escape from the four walls of customers’ homes. We look forward to supporting the industry further throughout the continued highs and lows of 2021 in any way we can.” 
Startle is a Propel BeatTheVirus campaign member

Tomos Parry turns Brat at Climpson’s Arch pop-up into permanent fixture: Michelin-starred chef Tomos Parry has turned his temporary Brat at Climpson’s Arch site into a permanent fixture. The Hackney site was brought online after the first lockdown to offer alfresco dining and was due to end in September. However, an extension until January has been hailed a success and now the site that serves Basque-style food will be a full-time operation. Parry said on Instagram: “In just under a month, we turned the empty courtyard at Climpson’s Arch into our new Brat restaurant. I have been so inspired seeing what our team (and many new additions) can do in the face of adversity. With the massive uncertainty of our restaurants being able to open or not, we immediately moved to open an safe outdoor space to hopefully keep jobs for the team, support our suppliers and bring the community together. We managed to turn it around with blistering energy, desire and efficiency. I am very proud of what we achieved with this brilliant project.”

West Wales hotel and spa on the market for £2.95m: A West Wales country hotel has been brought to market. Agent Christie & Co is marketing Lamphey Court Hotel & Spa, a Best Western hotel with spa and leisure facilities. Set in Pembrokeshire countryside, the restored Georgian mansion is located in Lamphey on the edge of Pembrokeshire National Park. The hotel comprises 39 en-suite bedrooms, with 27 of the rooms located in the main house and the remaining 12 in the adjacent stables known as The Coach House. Also located within the Coach House is a manager's apartment comprising a lounge, kitchenette, double bedroom and bathroom. Spa and leisure facilities are situated in a purpose-built building developed by the current owners. Amenities include a 14-metre swimming pool, sauna and steam room, fitness suite, hairdressing salon, sun terrace and spa that offers a range of Elemis treatments. The hotel is currently managed by Bespoke Hotels and trades under the Best Western branding. However, there is an opportunity for the new owner to rebrand. Richard Thomas, business agent in Christie & Co, said: “The hotel is currently fully managed, providing an ideal investment. Alternatively a new owner could assume management duties and imprint their own style and business acumen into the hotel.” Lamphey Court Hotel & Spa is on the market with a guide price of £2.95m for the freehold.

Heineken and Beerwulf to share ownership of Blade: Heineken UK has split the ownership of its Blade business with online beer delivery company, All direct-to-consumer activity and smaller business-to-business activity will be managed by Beerwulf, while Heineken UK will maintain ownership of all business-to-business on-trade outreach. The split will help put the Blade business in a better position to attract more customers and increase its market share across all sectors. Blade is a beer system that allows users to serve a freshly poured pint of draught beer without the need for a cellar and traditional equipment. All consumer data currently held by Heineken UK will be transferred to Beerwulf, with customers informed of the change and given the option to opt-out four weeks prior to the transfer of data. To facilitate the change of business and ensure customer service levels are maintained, the Blade UK shop will close in three stages over the course of 2021. Otto Esser, head of Blade at Heineken UK, said: “We are confident Beerwulf is best placed to further promote the Blade business. With its extensive product range, knowledge of home draught and professional set-up, Beerwulf offers a lot of potential to further accelerate the success of Blade in the UK market.”

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