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Wed 3rd Mar 2021 - Propel Wednesday News Briefing

Story of the Day:

‘Heed political and public appetite’ and deliver package of support to help hardest hit, says UKHospitality: UKHospitality is urging the chancellor “to heed political and public appetite” for a package of support for sector businesses and communities devastated by the covid crisis. A wide-ranging package of financial support would be backed by the majority of Britons, according to new data, and would provide a much-needed boost in Red Wall constituencies, where hospitality venue closures have been the highest in the country. Data released by analysts CGA showed the number of licensed venues in the UK fell from 123,200 in December 2015 to 107,775 in January 2021, with 7,659 of those closures occurring in 2020. Red Wall constituencies experienced, proportionately, the highest rate of closures, with 17.2% of venues closing since 2015, 9.3% since December 2019. Nationally, the fall was 12.5% between December 2015 and January 2021 with a 6.6% decrease between December 2019 and January 2021. Additionally, national polling data showed a majority of people in the UK (55%) believe the hospitality sector should receive more financial support from the government throughout 2021. UKHospitality chief executive Kate Nicholls said: “A bold and decisive package of support for the hospitality sector is a must at the Budget. It would be a rational step to bolster businesses that have struggled nationally, but most acutely in the newly Conservative constituencies of the so called ‘Red Wall’. It would be a pragmatic step publicly as well as politically. The figures give a clear indication of the kind of challenge hospitality has faced over the past five years. The steady increase in costs has seen too many businesses become unsustainable and the result has been closures across the UK. The speed with which closures have increased over the past year is horrifying. That closures have been most acutely felt in Red Wall constituencies should give the government pause for thought. These areas have lost vital social and economic hubs, yet are the very places where government is looking to ‘level up’. This is an open goal for the government and a rare gift that does not come along often.”

Industry News:

Updated 1,600-strong multi-site operators list available for Propel Premium subscribers at end of March, biggest churn ever: During the pandemic, many businesses have failed and are no longer trading but a host of new operators have appeared in recent times. The updated Propel multi-site operators list is the most comprehensive guide that shows which operators are trading in the UK hospitality industry. The guide of circa 1,600 companies provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different, and what each business specialises in. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. Propel managing director Paul Charity said: “The anticipation for this list has been phenomenal. Each and every day we have people asking when it will be ready. We’ve seen a lot of companies hit by the pandemic and no longer trading but there are many new operators with multiple branches or plans to go multiple that have been added to the Propel multi-site operators list. This is the most comprehensive list for UK companies with lots of useful information. It has taken three months to research and this list shows the biggest churn of companies we’ve ever seen – hundreds out of the list and hundreds in.” The updated list will be available to all Propel Premium subscribers at the end of March. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from Propel insights editor Mark Wingett. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email

Almost eight in ten night-time economy businesses solely relying on Budget to survive: Almost eight in ten (78.8%) of night-time economy and events businesses are solely relying on the Budget to survive until they were able to open under the government roadmap, according to a flash survey. The survey of more than 200 businesses by the Night Time Industries Association (NTIA) also revealed 85% believe the Budget was fundamental to retaining their workforce. NTIA chief executive Michael Kill said: “We are extremely concerned the chancellor's announcement will fall short of what businesses and workers in the night-time economy need to survive. Nothing that has been briefed to the media ahead of the Budget indicates the chancellor understands the scale of the catastrophe facing UK nightlife. We urge the chancellor to recognise night-time economy businesses have been among the hardest hit by covid, with many having been closed entirely for the duration of the pandemic. This Budget really is the last chance saloon to save the livelihoods of workers and freelancers in the sector. Without this support, there will be much financial hardship and the wider economic recovery will be held back.”

Sturgeon – lockdown may end sooner than planned: Scotland’s lockdown could end sooner than ministers thought possible as coronavirus cases and hospital admissions continue to plummet, first minister Nicola Sturgeon has said. She said: “We have every reason now to believe the exit from lockdown might be quicker and come sooner than we believed would be the case just a few weeks ago.” Sturgeon published a cautious exit plan on 23 February that offered very few indicative dates for limited reopening of some services and forecast tough measures would continue until the end of April. Non-essential shops, pubs, gyms, hairdressers and other leisure and beauty services were expected to stay closed until at least 26 April. Vacations in Scotland were deemed “unlikely” until well after the Easter holidays. 

Sector urges government ministers to protect apprenticeship funding: Sector leaders have urged the government to throw a protective ring around apprenticeships funding and youth employment in order to make training and the development of the future hospitality workforce a cornerstone of the recovery. Bosses from a cross-section of the industry – including charities, trade bodies, training companies, chefs, and business leaders – have written to government ministers urging them to work with them to secure funding and ensure the sector can play a key part in rebuilding career pathways and emerge once again as a major employer and trainer of young adults. Sector leaders warned there was a risk funding from the Apprenticeship Levy will time out and be lost. They want government to ensure existing apprenticeships, suspended due to the pandemic, can be completed and allow companies to continue to access the funding. They have called for a 12-month freeze on the expiry of all Apprenticeship Levy funding for businesses in the hospitality and tourism sector, to reflect the limitations the sector has faced over the past year. The letter stated: “As we look forward to rebuilding our businesses, our people, including apprentices, will be at the heart of our plans, and we have a track record on increasing apprenticeship starts each year since 2015. However, for us to be able to do this fully we need maximum access to the funds we have continued to pay through the Apprenticeship Levy. Over the past year of lockdowns and restrictions we have simply been unable to spend the levy funds on our apprenticeship programmes. These funds are now at risk of expiring and being lost to the purpose for which they were intended – upskilling the UK workforce.” The calls come as unemployment across the economy nudges up to 1.74 million people, 5.1% of the workforce and up 454,000 in a year. Unemployment is expected to peak at about 2.6 million, meaning a further 900,000 people will become unemployed. A significant number of job losses have come from hospitality and more than one million workers from the sector remain furloughed via the government’s Coronavirus Jobs Retention Scheme. Prior to the pandemic, the wider hospitality sector employed about 10% of the workforce and was responsible for creating one in eight new jobs.

Jobs in UK tourist destinations hit hardest by covid-19: Jobs in areas of the UK reliant on tourism have been hit hardest by the pandemic, according to the BBC Shared Data Unit. It found in some areas, about three out of five people who began claiming Universal Credit (UC) at the outset of covid-19 were still doing so six months later. Experts said areas with seasonal employment were more likely to see furloughed workers, those in low-wage jobs or on zero-hours contracts. The data, which has been compiled after analysis of figures from the Department for Work and Pensions, found about 2.4 million fresh UC claims began last April and May during the first lockdown – a sevenfold increase on the number made in the same two months in 2019; at least three in every five of those claims – circa 1.4 million – remained open six months later; areas with the highest proportion of claims open six months later include London, north and west Wales, north east Yorkshire, Scotland and parts of Cumbria. Resolution Foundation think-tank senior economist Nye Cominetti said: “The general consistent pattern is places that rely on people travelling to them have been the hardest hit.” Economist Emma Congreve, of the Fraser of Allander Institute at the University of Strathclyde, added: “The pandemic has exposed a number of underlying inequalities in the labour market.” The research showed the tourism industry accounts for one in seven jobs in London and contributes almost 12% of London’s GDP, while tourism spending in the capital is set to fall by £10.9bn this year. Richard Burge, chief executive of London Chamber of Commerce and Industry, said businesses in the capital had “suffered the perfect storm of losing revenue usually provided by international and domestic visitors, commuters, and business travellers”. Areas of Wales – such as Gwynedd in north Wales and Snowdonia National Park – that are “over-dependent” on tourism have seen a 60% drop in the value of tourism in 2020.

Murdoch – business rates system needs to be rebalanced, addressed rent with ‘significant proportion’ of landlords: The current business rates system needs to be rebalanced, Alasdair Murdoch, chief executive of Burger King UK, has said and the circa 530-strong business has addressed its rent with a “significant proportion” of its landlords. Speaking to Sky News ahead of the Budget, Murdoch said: “The vast majority of our restaurants have been open, and when we have opened, we have been in conversations and negotiations with our landlords to pay those rents, and with a significant proportion we have addressed that. There is still an outstanding balance, but we are in a much better and healthier place than we were. There is a problem between landlords and tenants, such as ourselves and if there is some kind of framework the government could help us with that would be a positive step forward but I am not hopeful for that.” On business rates, Murdoch said it had been “very encouraging what we are seeing in Scotland in terms of an extension to the rates holiday for a year that would make me believe there might be a similar kind of extension here”. He said: “I think long-term the business rates system is outmoded, it is overtly penial to those businesses on the high street, it needs to be rebalanced. I know the review has been kicked down the road to the autumn, but everyone knows something needs to be redone to it, to redress the balance and keep our high streets, which is what we all want and that will benefit landlords and tenants. Right now, we need an extension of the business rates holiday.”

Lunya owners fear ‘losing small fortune’ by reopening for outdoor-only dining: Restaurateurs Peter and Elaine Kinsella have said they will not reopen their Catalan restaurant concept Lunya for outside dining in April over fears they could “lose a small fortune”. But the duo said they “don’t intend to falter at the final hurdle” as lockdown restrictions in England prepare to be lifted. In a newsletter to customers, the Kinsellas said they plan to reopen from 17 May, the date prime minister Boris Johnson said would be the earliest the hospitality industry can open fully, indoors and outdoors. They said: “Reopening on 17 May means we can return to being able to just pop in for a drink, sitting at the bar, and eventually by summer, larger groups of family and friends, and (dare we mention) by Christmas, large work parties back. The unpredictable weather in April, which means that we have high staffing costs, rotting food and people not coming out means we could lose a small fortune. We intend to still carry on with all of the new innovations we developed during the pandemic: cook-at-home packs; deli treat packs; Zoom-based events (we think these will continue to be popular for people who can’t travel, get baby-sitters, live the other side of the country or just want to enjoy social events at home); takeaway menu; and importantly for us, our free meals for carers who we want to support all year round. They’ve all proved too popular to stop now. In the meantime, we have lots going on. Our big aim, now, is to make it to 17 May. This lockdown is particularly tough. There is very little government financial support, the early part of the year is always a quiet time for sales, and yet the huge overhead bills are still there. But, we have made it this far and don’t intend to falter at the final hurdle.” Lunya operates two sites in Liverpool having closed its Manchester venue last summer to “protect the business”.
Leicester mayor mulls ‘low-cost Boxpark’ to boost city hit by more covid restrictions than most: Leicester \mayor Sir Peter Soulsby is considering setting up a “low-cost Boxpark” in the form of shipping containers that would be home to businesses such as food and drink traders on a low-rent basis to kick-start trade in the city. Due to a higher number of positive covid-19 cases, Leicester has been under more severe restrictions than most of England during the pandemic and the city centre also faces competition from a £168m extension to the out-of-town Fosse Park shopping centre. Sir Peter said the St Martin’s area of the city could potentially host such a development as the council intends to demolish two shops and create more space. He told Leicestershire Live: “It is one but not the only possible location for a Boxpark. I am very interested in this concept as a way of bringing new life and regeneration to the city. You could get a number of units in there for food and drink and other small businesses. You can put these units in for a few thousand pounds and that allows you to offer lower rent that reflects that and is attractive to smaller independent businesses. The council could be the landlord but that is not the only model. Leicester, in the post-covid era, needs to offer something that a large soulless shopping park on the edge of town cannot.”

UK footfall down almost 80% on pre-covid levels: UK footfall is currently down almost 80% on pre-covid levels amid the latest lockdown, according to data from Wi-Fi solutions provider Wireless Social. London was the busiest city, although still way down on that seen in February 2020, with footfall on Saturday (27 February) at minus 72% and minus 70% on Sunday (28 February). The city with the quietest footfall was York, where on Saturday it was down 94% on the level seen before the pandemic and by 92% on Sunday.
Wireless Social is a Propel BeatTheVirus campaign member

Company News:

Turquoise adds five former branded sites to estate, eyes further expansion: Turquoise Kitchen, the Turkish concept from the group behind The Real China, has added five sites formerly operated by national restaurant brands to its estate, as its eyes further expansion, Propel has learned. Over the past few months, the now 11-strong group has secured the former Carluccio’s in Pinner, the former ASK in Saffron Walden, the former Cote in Harpenden, the ex-Bill’s site in Marlow, and the ex-Wildwood site in Letchworth. Propel understands Turquoise Kitchen is in the process of securing sites in towns such as Welwyn Garden City, Kingston and Dorking. The company is backed by HJ Tenger Holdings, which operates The Real China buffet brand, pan-Asian buffet concept Kungfu, and Tang’s, an even larger Chinese buffet format. Turquoise, which offers charcoal-grilled meat, mezze, salad and Turkish pizza, is aiming to capitalise on a lack of mass-market national operators specialising in Turkish cuisine. The business is working with property adviser DMR to find sites in affluent towns across the UK.

You Me Sushi appoints Peter Cossar as managing director: You Me Sushi, the London-based restaurant and takeaway concept, has appointed Peter Cossar, formerly of Starbucks and Papa John’s, as its new managing director, Propel has learned. Cossar was previously UK operations director at Papa John’s International for almost two years. Previous to that he spent almost four years as a regional operations director at Starbucks UK. Founded in 2008, You Me Sushi opened its first site in Marylebone, with a second branch opening two years later at the Westfield shopping centre in Shepherd’s Bush. It has since opened a further five sites across the capital in Gray’s Inn, Tottenham Court Road, Earl’s Court, Chiswick and Brent Cross. It is understood to have lined up a further opening in Twickenham. 

Yard Sale Pizza lines up Balham opening: Yard Sale Pizza, the restaurant and delivery concept that includes sector investor Paul Campbell as non-executive director, has lined up its seventh opening in the capital, after securing a site in Balham, Propel has learned. The Johnnie Tate-led business has secured the former The Crust Co site at 63 Bedford Hill, for an opening later this year. The company opened its debut restaurant in Clapton in 2014. It also has branches in East Dulwich, Hackney Road, Leytonstone, Walthamstow, and Finsbury Park.

McDonald’s orders review into workplace-safety policies after TV report about sexual harassment allegations: McDonald’s has ordered a review of its workplace-safety policies and programmes following a US television report about sexual harassment allegations at a number of restaurants. Chief executive Chris Kempczinski said he had asked for a review across the global system by four members of the brand’s executive team – Joe Erlinger, president of McDonald’s USA; Ian Borden, president of McDonald’s international; Heidi Capozzi, global chief people officer; and Katie Fallon, chief global impact officer. In an open letter on the company’s website, Kempczinski said: “We intend to understand current best practices, solicit the input of franchisees and crew, and define a set of global brand standards that we can communicate later this year.” It comes after a “CBS Sunday Morning” programme chronicled women who had either filed discrimination charges or sued McDonald’s corporate restaurants or those of franchisees after “persistent and unwanted harassment from male co-workers”. Kempczinski said: “Far from shying away from them, in the case of the sexual harassment allegations detailed in the ‘CBS Sunday Morning’ story, I want to recognise these individuals and acknowledge their courage. Any person who steps forward to report concerns or issues deserves our utmost respect. Let me say plainly: every single person working under the Arches must have a safe and respectful work environment. Sexual harassment in the workplace is an affront to everything we stand for as a system. It has no place in any McDonald’s restaurant, and it will not be tolerated.” In 2019, McDonald’s expanded its policies for dealing with sexual harassment in its corporate stores, adding a hotline for employees to call to file anonymous reports.

Ex-Pret chief customer officer joins Cote board: Barnaby Dawe, the former global chief marketing officer for Just Eat and ex-chief customer officer at Pret A Manger, has joined the board of Cote, the circa 90-strong French brasserie chain backed by the Partners Group. Dawe, who left Pret at the end of 2019, joins Cote as an “operating partner”/non-executive director. He joined Pret in 2018, in the newly created role for the brand of chief customer officer. He has previously held senior positions at Sky, The Sun, The Times, Heart and Channel 4 before joining Just Eat in 2015. On Tuesday (2 March), Propel revealed Cote had further strengthened its management team with a number of new appointments, including James Sherrington as its new chief financial officer. 

FB Holdings to open Indo-Persian restaurant concept: FB Holdings, which is behind the rapidly growing Dirty Wild Wings concept, is to launch an Indo-Persian, fine-dining concept called Qavali, in Birmingham, later this year. Named after a style of Sufi devotional singing and originating from the Arabic word “qual”, meaning “to speak”, Qavali, which will open on the former Coast to Coast site in Brindleyplace, will offer a range of dishes inspired by Turkish, Arabic, Persian and Indian cuisine. The 8,479 square foot site will provide seating for up to 250 people once complete. Deni Sharankova, marketing director at FB Holdings, said: “Birmingham has an extremely varied culinary scene, and we feel Qavali will be able to bring something different and new to foodies throughout the city. Our menu will be full of rich new dishes that have been inspired by a diverse region, which for many remains relatively unexplored in terms of cuisine. Qavali will provide a high-dining experience within an environment to match and will help further broaden the horizons of our future guests.” Other brands within the FB Holdings portfolio include Indian street food establishment Indico, which currently operates in The Mailbox in Birmingham and Shirley; JAQKS Chicken & Chips, with sites across the Midlands; Jamaya, a Caribbean/jerk chicken concept at the Touchwood Shopping Centre in Solihull; Bulls Street Burgers, serving-up classic burgers and sides; and recently launched Japanese fried chicken concept Karaage.

Former Grind operations director to launch multi-experiential site in One Marylebone next month: Restaurateur Alex Ghalleb, a former operations director at coffee and cocktail brand Grind, is set to open a multi-experiential offer called Chameleon in the grade I-listed One Marylebone venue next month. The site, which was previously a church built in the 1820s, will include a Tel Avivian sharing-style outdoor restaurant and tented lounge when it launches on Friday, 23 April. Other experiences set to launch later in the year include a silent cinema, magical wellness sessions, a futuristic fitness experience, dance classes and a private members’ space at basement level. Ghalleb, who is also a former managing partner of Gold in Notting Hill and an ex-general manager at Soho House, said: “We’re excited to be bringing something new to London. Chameleon is a space that offers a vibrant assortment of experiences, all to be enjoyed under one roof.” The restaurant will comprise nine greenhouses offering seated tables for up to 30 people. Israeli chef Elior Balbul will come from Tel Aviv to head the kitchen. There will also be a cocktail and mezze offer and live performances will take place in the evenings when restrictions are lifted. The private members’ club is set to open in the autumn with capacity for 400 people and will include a restaurant, cocktail bar and private dining rooms that can be opened up to create a nightclub.

Wing Wing to open third site next week: London-based Korean crispy chicken specialist Wing Wing will open its third site on Monday (8 March), in Charing Cross Road, Chinatown. The site will be the company’s flagship branch and will serve Korean-style fried chicken, draught beer and have karaoke rooms to use when permitted. The initial opening date means Wing Wing will only be open for takeaways and deliveries. Wing Wing takes inspiration from Korean food and popular culture, with a dining offer focused on “Chimaek” – a combination of chicken and maekju, the Korean word for beer. Wings come in a variety of flavours – each piece cooked to order and hand-brushed with a signature glaze – and sit alongside burgers, wraps, rice boxes, and salads on the brand’s menu. Wing Wing was also the first UK brand to have “bottoms-up” beer dispensers that allow customers to serve themselves beer at the table. The Chinatown London restaurant, spanning 2,500 square foot across three floors, joins its sister operations in Hammersmith and Tavistock Square.
Camberwell Arms team to open ‘London-style’ pizzeria Mike’s in April: The team behind The Camberwell Arms pub and Frank’s Cafe is launching “London-style” pizzeria Mike’s in Peckham, south London. Headed by chef Michael Davies, Mike’s pledge is to add anything to a pizza “to make it delicious with no taboos attached”. The pizzeria, which opens in the Copeland Park/Bussey Building complex in April, said it would take the various styles of making pizza across the world but add a London twist. The team said: “If the only rule is making the most delicious thing you can think of then who says what should or shouldn’t be on a pizza.” The restaurant will have room for inside and outside dining with takeaway and deliveries available too. Mike’s will also offer a selection of small plates, a weekend brunch menu and a seasonally changing range of natural wine and locally brewed beer.

Online delivery marketplace offering home-cooked food from trained chefs launches £300,000 crowdfunding campaign to expand: Online food delivery marketplace Cook My Grub, which offers home-cooked food from trained chefs, has launched a £300,000 fund-raise on crowdfunding platform Crowdcube to expand. The company is offering 9.09% equity in return for the investment, giving a pre-money valuation of £3m. Cook My Grub is operating in Berkshire, serving customers in Maidenhead, Marlow, Slough and Windsor. Further roll out of the service is planned with launches in Reading, Swindon, west London and parts of the Home Counties through 2021. The pitch states: “Finding time to cook is a luxury many people don't have! As a result, many people end up resorting to frozen meals. We believed a digital platform was needed to help those people connect with qualified home chefs. Cook My Grub was conceived to provide a healthy and sustainable alternative for people unable to cook wholesome meals at home. Each customer is presented with a wide selection of cuisines to choose from. These meals can be ordered on the day or pre-ordered several days or even weeks in advance. For home chefs, we set up their own ‘virtual restaurant’, which gives them the flexibility to decide when, what and how much they cook. The funds raised will be used to support further growth by increasing marketing, scaling-up operations and growing the technology teams. The company's goal is to grow and consolidate the home-cooked food market by organising a currently unorganised sector.”

Prezzo owner Cain International exploring $250m SPAC: Cain International, which last month acquired Prezzo from its administrators through a pre-pack arrangement, is reportedly exploring raising about $250m for its debut special purpose acquisition company (SPAC). According to Bloomberg, the investment firm, led by Jonathan Goldstein, is set to pursue a New York listing for the blank-check company. A spokeswoman for Cain declined to comment. Cain, which operates in Europe and the US, is focused on investments in the real estate, hospitality, lifestyle and leisure sectors. In October, the firm hired former Walt Disney Co executive Nick Franklin as a Los Angeles-based senior managing director. Last month, the Karen Jones-chaired Prezzo announced 22 of its 178 restaurants would not reopen, resulting in 216 people leaving the business as part of the administration process. Cain acquired the debt and equity of Prezzo in December last year.

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