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Morning Briefing for pub, restaurant and food wervice operators

Mon 8th Mar 2021 - Propel Monday News Briefing

Story of the Day:

Lord – we are sending the government a letter of claim, explaining why the roadmap is unlawful: Sacha Lord, night-time adviser for Greater Manchester, has said early this week he and his legal team are sending the government a letter of claim, which explains why the roadmap, published by the prime minister on 22 February, is unlawful so far as it relates to the reopening of non-essential retail shops in preference to indoor hospitality. Lord said: “The letter invites the prime minister to change the damaging policy now, failing which High Court judicial review proceedings will be issued. We create safe, covid-secure spaces, with many measures in place. We are regulated, licensed and constantly monitored by the local authorities. We are simply asking the government to allow hospitality to reopen fully, the same day as non-essential retail, 12 April. It is safer. With the timeline tight and hospitality needing time to prepare, we will ask the High Court to expediate the case if needed. Throw into the mix the weather. Hospitality is licensed and regulated. It is far safer to open up these safe, secure venues, than allow people to buy as much alcohol as possible from the supermarket, without any questions asked.” Alex Reilley, chairman at Loungers, said: “The support measures announced by Rishi Sunak this week are obviously extremely welcome and will help some, regrettable not all, hospitality businesses survive. However, we’d much rather be allowed to trade our way out of this, be significantly less reliant on government support, and play our part in getting the economy restarted. If we are going to be driven by the ‘data’, hospitality should be allowed to reopen at the same time as non-essential retail – waiting until 17 May date is ridiculous.” At the start of this month, the government was forced to drop its “substantial meal” policy for hospitality following judgement in a legal case brought by Lord. Judges in the case ruled the substantial meal restriction imposed on wet-led pubs during England’s tiered lockdown system was arguably discriminatory towards certain sections of society.

Industry News:

Last chance for operators to book for Propel Multi Club free digital conference, more than 450 registered: Today (Monday, 8 March) is the last chance for multi-site operators to book for the next Propel Multi Club Conference, taking place on Wednesday (10 March), which will take the form of a day-long digital event and will look to help operators to “thrive and survive”. More than 450 people have so far registered for the event, which starts at 10am. It is free for operators, who can claim two places by emailing anne.steele@propelinfo.com. To see the full speaker schedule, click here.

Government set to announce extension to moratorium on evictions this week: The government will announce this week an extension to the moratorium on evictions from commercial property, Propel understands. It is thought the government will extend the moratorium, which was due to run out at the end of this month, for a further three months until the end of June. Last month, the British Property Federation said it estimated total rent unpaid for UK commercial property between late March 2020 and the end of June 2021 will be up to £7bn if the moratorium is extended and the current rate of rent non-payment continues. Dermot King, chief executive of Oakman Inns, said last week’s Budget brought “a sigh of relief in the hospitality industry”, but the sector needs “one last push from government” to design a scheme to address the rent issue. Writing in inews, King said: “The major issue that has not been addressed is rents and landlords. With many landlords watching new Special Purpose Acquisition Companies being funded to acquire distressed assets, tenant businesses are increasingly feeling vulnerable because of not being able to pay their rent or agree a basis for settlement of rent outstanding. We need one last push from the government to design a scheme so these businesses can survive.” Earlier this week, Loungers chairman Alex Reilley tweeted: “Using an extension to the moratoria in order to find a solution is essential.” Serial sector investor Hugh Osmond said for the hospitality industry “unpaid back rent of more than a year is now an existential threat”. He said: “160,000 hospitality venues large and small employing three million people have rent liabilities of about £8bn over the 14 months they have been forced to close by the government or trade with heavy restrictions. The government now needs to provide more than a moratorium to solve this. We have to keep pushing for a government-mandated rent solution. Leaving the back debt to be sorted out as a free-for-all will be awful for landlord tenant relations.” 

Alfresco boost for pubs and restaurants as planning rules waived until September 2022: Red tape must be cut to make it easier for pubs and restaurants to have tables and chairs in the street or put up marquees in their beer gardens, the government has said. With the return of outdoor dining and drinking earmarked for 12 April, communities secretary Robert Jenrick has called on every council leader to help the hospitality industry “in every way possible” after a year of enforced closures due to covid-19. He told them planning rules for alfresco dining and temporary shelters must be waived unless there are exceptional circumstances. And in a further boost for the industry, he has extended the concession until the end of September 2022. Writing in the Sun on Sunday, he said: “I'm determined we don't let red tape get in the way of a great British summer. The planning changes we put in place last year have been a lifeline to many businesses and they're here to stay for the summer of 2021. We will be extending pavement licences for a further 12 months, making it easier and cheaper for pubs, restaurants and cafes to continue to make alfresco dining a reality with outside seating, tables and street stalls to serve food and drinks. I've told council leaders we expect them to grant these licences very swiftly – with no need for businesses to reapply or charge another fee. If the council doesn’t get back to you, there’s a presumption it's okay to proceed.”

Kwarteng – social distancing in retail and hospitality could stay the year: Business minister Kwasi Kwarteng believes social distancing in the retail and hospitality sectors could remain in some capacity for the rest of the year. Last month, Boris Johnson announced almost all covid-19 restrictions could be lifted by 21 June, so long as the battle against the coronavirus continues to go to plan. Despite the planned ease in June, with even nightclubs set to be allowed to open, Kwarteng believes some social distancing could be here for the duration of the year. In an interview with The Times, he said: “When I speak to retailers and people in the hospitality industry they are quite ready to adapt their premises to social distancing. What they can’t stand is the idea of opening up and then plunging back into a lockdown. That’s what they really want to avoid. I think this year there may well be still some social distancing. There’s also that whole thing of consumer behaviour. People will expect a certain degree of safeguards. We don’t know how people are going to react.” UKHospitality chief executive Kate Nicholls tweeted in response: “If this is the case then business rate relief needs to be urgently extended to the same time period. Capacity constraints and social distancing controls post 21 June mean our businesses do not break even and will not be able to pay even part of their sky-high rates bills.”

Foodservice landscape in city centres ‘will never be same again’, demand from locals to become ‘significantly more important’: Sector analyst Peter Backman has argued the foodservice landscape in city centres will “never be the same again” and demand from “locals” will become “significantly more important” to the sector. In a collaborative project with French foodservice market expert Francois Blouin, of Food Service Vision, Backman looked at the impact of covid-19 on large city centres, such as London and Paris. The pair believe there will be changes to demand in different parts of the day while flexible, multi-channel offers will “come to the fore”. They said: “Foodservice demand in city centres will fall in the short term. When it returns, the composition of demand is likely to be very different to how it was pre-covid-19; it will certainly be different to how it looks today while the virus is still very active. More specifically, with a dramatic fall in the number of tourists and fewer commuters, demand from locals will become significantly more important, albeit within a smaller market in the short to medium term. With the ongoing absence of commuters, the functional, breakfast and lunchtime, food-to-go market will also be reduced. High spending international tourists will return but not for a time; mass tourism will also return, but may not reach historic levels for some years. These changes in the structure of demand imply a change in the foodservice ‘heat map’ of each city centre. Yesterday’s red-hot zone will be cooler tomorrow; and former cold zones will turn into tomorrow’s hot ones. Operators and investors must expect a reshuffling of winning and losing areas and concepts. Reduced lunchtime demand from commuters, plus the growing attraction of delivery for locals, will lead to reduced demand for purely functional meal occasions that merely provide an opportunity for refuelling. High-end restaurants, repurposed if necessary, to provide a valued, unique food and beverage experience, will survive. Concepts that are designed specifically to cater for visitors from other countries will suffer.”

Scottish government admits no sector-specific evidence for hospitality shut down: The Scottish government has finally admitted in an FOI response it has not produced or sourced any specific evidence to support the restrictions on Scotland’s hospitality sector. After three and a half months of pursuing its enquiry, the Scottish Hospitality Group (SHG) has now received a reply saying: “Neither the Scottish government, the chief medical officer's advisory group nor SAGE have produced evidence papers on a sectoral basis. Instead we have used scientific evidence on transmission coupled with the social and economic benefits of particular sectors that ministers have used to make decisions.” In its first refusal to provide information, which came well after the 20-day deadline for responding, the government claimed there were potentially 3,000 documents in scope. This was reduced to 2,000 after SHG further restricted the scope of its request. Eventually the government released only one document of no significance to the request. SHG is also appealing a refusal to provide some information on the grounds that is protected by personal data exemptions, asking instead for such information to be redacted. Spokesman Stephen Montgomery said: “After almost four months we have finally secured the truth the government has no specific evidence to justify the restrictions placed on our industry. It’s also deeply disappointing to see no thought given to the knock-on effects of closing hospitality, such as driving people towards house parties, which we know has been a major issue. We completely understand lockdown measures were necessary and remain so. But there’s always been the chance to work a lot smarter by partnering with the industry to have systems in place that protect both public health and people’s jobs. Now we’re approaching an easing of restrictions, there’s still time for the government to listen to businesses and make sensible changes to the levels system to give us a viable trading chance.” 

Welsh hospitality gets business rates suspension extension: The suspension of business rates for the retail, leisure and hospitality sectors in Wales is to be extended for a further 12 months. Welsh government finance minister Rebecca Evans said the £380m package provides Welsh retail, leisure and hospitality businesses with rateable values up to £500,000, and charities, with a year-long rates holiday. The Welsh government said the relief package, in combination with its existing Small Business Rates Relief scheme, would ensure more than 70,000 businesses continue to pay no rates at all in 2021-22. Evans said: “The Welsh government has worked tirelessly to ensure businesses in Wales have access to the most generous business support package anywhere in the UK. Our targeted, responsible approach has allowed us to dedicate more funding for business support than we have received from the UK government. I am pleased to confirm our 100% rates relief package for those hardest hit sectors will continue for a further 12 months, protecting jobs and businesses across Wales.”

Operators see employee numbers reduce to 62% of levels of first lockdown: Operators have seen their employee numbers reduce, on average, to 62% of the levels of the first lockdown in March 2020, with the biggest fall coming in entry-level front of house roles, according to a survey by Flow Learning and COREcruitment. The survey, which represents more than 70 operators and more than 1,000 sites, highlighted the areas operators were most concerned about relating to the onboarding and recruitment of talent after the lifting of current covid-19 restrictions. The biggest concerns for leaders around the mass onboarding of new team members is maintaining product quality and delivery, closely followed by the potential negative impact on guest experience and then concern around the short timescale to prepare teams to relaunch. Also high on the list was the challenge of preserving company culture and a worry about a high churn. To prepare for these challenges, more than 70% of respondents said they were renewing training materials. The survey results showed, on average, companies expect their staffing levels to reach 86% of pre-covid levels by June 2021 and 90% by November 2021. 
Flow Learning and COREcruitment are Propel BeatTheVirus campaign members

Senate approves $1.9tn covid-19 relief package, including increased $28.6bn for small restaurants: The $1.9tn (£1.4tn) covid-19 relief package, which includes an increased $28.6bn for small restaurants, has been approved by the US Senate. The final version – which excludes the Democrat-sought $15 minimum wage and shrinks unemployment benefits from the original $400 to $300 – was passed strictly down party lines by 50 votes to 49. It now heads back to the US House of Representatives, which is expected to vote on the amended bill this week. If it passes, the bill will head to president Joe Biden’s desk for signing. The plan also includes the Restaurant Revitalisation Fund, which now will provide $28.6bn in debt-free relief for small and mid-sized restaurants, an increase on the original $25bn, and is based on the original $109bn Restaurants Act passed by the House last year. The plan would provide up to $5m in grants for individual restaurants, bars, caterers, breweries and tasting rooms or up to $10m for restaurant groups. To qualify, restaurants must not be part of an affiliated restaurant group with more than 20 locations. “Every vote brings us closer to the relief restaurants have needed for the past year,” Sean Kennedy, National Restaurant Association executive vice-president for public affairs, said. “The Senate passage of the American Rescue Plan means we have turned the corner and can see the finish line. We appreciate leadership’s continued support of the Restaurant Revitalisation Fund and the other programmes in this bill that will support restaurants across the industry to put us on the road to recovery.” Senator Bernie Sanders attempted to include an amendment that would feature the $15 minimum wage, but efforts were quashed by Republicans and some Democrats. House Democrats had originally included the wage hike in their version of the bill but was struck down by the Senate parliamentarian, who said the bill did not follow Senate rules.

BBPA strengthens membership as JD Wetherspoon, Loungers, Oakman and Drake & Morgan join: The British Beer & Pub Association (BBPA) has strengthened its membership with the addition of JD Wetherspoon, cafe-bar brand Loungers, Oakman Group and London-based bar operator Drake & Morgan. The trade body said the type of organisations joining were representative of a shift in the beer and pub sector to a “modern, innovative and forward-looking industry, which the trade association champions”. The BBPA said it also continues to campaign for the wider sector as a whole and will continue to campaign for wet-led pubs in the coming months who will need further support in the aftermath of the Budget as they recover in 2021. The BBPA said the growth in membership, combined with its campaigning that helped result in support for pubs and brewers totalling more than £2bn at the Budget, highlighted the value in having a strong voice for the British pub and brewing sector. BBPA chief executive Emma McClarkin said: “We warmly welcome our latest members, many of whom represent a shift we have seen in the sector to that of modern, innovative offer to beer drinkers and pub-goers. This is a very exciting time for the BBPA in its 100-year-plus history and we are continuing to significantly grow our membership.” 

Job of the day: COREcruitment is working with a growing hospitality and leisure group as it searches for a new head of marketing. This established restaurant business is breaking into the leisure sector and will offer an “immersive entertainment experience that pairs good times with amazing food”. The business is in its infancy, with one site opened, but is looking to grow to 30 sites in the next five years. Initially, the head of marketing will be a standalone role and will require accountability for developing and leading the brand projects and retail promotional activity calendar, seeing ideas through from concept generation to implementation before focusing on building and mentoring a team. They will excel in social and digital platforms and have engaged PR agency. This will have a big emphasis on membership and partnerships, and the individual will be expected to be able to analysis data and act upon the insights of customers. This position is based in central London and will pay up to £60,000. Anyone interested can email Kate@corecruitment.com with their CV.

Company News:

Chipotle to open Clapham site: Chipotle is to further add to its UK presence, with an opening in Clapham, as it looks to target further sites in the capital’s “villages”, Propel has learned. The company, which operates more than 2,600 sites across the globe, has secured the former Gourmet Burger Kitchen in Northcote Road for an opening this summer. Chipotle, which operates seven sites in central London, plus a delivery kitchen unit in Collindale, is also thought to be in talks on a site in East Dulwich. On the Clapham site, Fintan Harte, European property and development manager at Chipotle, told Propel: “Chipotle is cultivating a better world by serving responsibly sourced, classically-cooked, real food with wholesome ingredients without artificial colours, flavours or preservatives. We are excited to bring our real food to the Clapham community with our new Northcote Road restaurant opening this summer.” Last month, Brian Niccol, chairman and chief executive of the US brand, said the company was ready to move forward with its UK business. The company, which is led in Europe by ex-Costa Coffee managing director Jim Slater, made its debut in the UK in London Wall in 2015. Paul Tallentyre, at Davis Coffer Lyons, acted on the Northcote Road deal. Meanwhile, Chipotle is to begin tying executive bonuses to larger corporate goals including diversity and sustainability. The goals, which are divided into three categories – people, food and animals, and the environment – include commitments to racial and gender pay equity, increasing the amount of local/organic/sustainably raised food by the end of 2021, and releasing data on its carbon footprint by the end of the year. Chipotle said 10% of executives’ incentive plans will be tied to their progress toward achieving these goals. 

Jollibee to invest £30m on UK expansion play: Jollibee, the Philippines fast food group, plans to invest £30m on expanding in the UK. Adam Parkinson, European vice-president of the fried chicken brand, which operates about 1,200 sites worldwide, told The FT the company wanted to be in “every major city in the UK” with plans to invest £30m, including opening ten new outlets in 2021 and a further 15 to 20 next year. The first will be a flagship site in Leicester Square – on the ex-Bella Italia site, which is set to open as lockdown restrictions on restaurants lift in May. Earlier this year, the brand was granted permission to open a new site in Clumber Street, Nottingham, which will be the brand’s fourth UK site. Late last year, the company announced it had openings planned for Edinburgh, Leeds and Cardiff. Propel revealed last month Jollibee had lined up a further opening in the UK, in Reading, and was set to take over the former Artigiano Espresso & Wine Bar site in the city’s Broad Street. Meanwhile, the brand is thought to have applied to open in the former Argos site in Newcastle city centre.

Twickenham Green Taverns acquires eighth pub: London-based operator Twickenham Green Taverns has acquired its eighth pub. The company has taken on The Magdala in South Hill Park, Hampstead, which is opposite Hampstead Heath station. Twickenham Green Taverns has acquired a new free-of-tie 15-year lease on the ground floor and lower ground floor of The Magdala. The company will be opening The Magdala in the near future after a substantial refurbishment and will look to operate the property as a wet-led pub with a traditional food serving. Twickenham Green Taverns also operates The Lyric in Soho, The Express Tavern in Kew Bridge, The Sussex Arms in Twickenham, The Corner House in Windsor, The Albion in Kingston, The Antelope in Surbiton and The Watermans Arms in Barnes. Davis Coffer Lyons acted on behalf of the landlord Mulberry One Capital on The Magdala deal. The property last operated in 2014 as a traditional public house with a significant food serving and became famous as the pub where Ruth Ellis, the last women to be executed in Britain, shot her partner.

Tokyo Industries to reopen iconic music venue The Welly in May: Tokyo Industries, led by entrepreneur Aaron Mellor, has come to the rescue of iconic Hull music venue The Welly. The Wellington Club was closed in July last year and entered administration but Tokyo Industries, which also saved Manchester venues Gorilla and The Deaf Institute, has announced it will reopen in May when covid-19 restrictions allow it to do so. Mellor said: “The UK needs regional live music venues like The Welly. They are a vital part of a city’s cultural fabric. We must work hard to try to retain these creative gems for future generations to enjoy. Covid has been hugely difficult for live music venues nationally and it will take some time to recover from this lost year. We hope to re-engage the jobs that people lost during the closure. It’s been the worst year ever for hospitality and live music venues, but it feels like the end is sight.” The venue will undergo aesthetic improvements and sound, lighting and visual production upgrades before reopening. The Welly has helped launch the careers of many music acts such as Roland Gift, The Housemartins, The Beautiful South and Everything But The Girl.

Kanada-Ya plans three new openings this year: London-based ramen concept Kanada-Ya has said it plans three new openings in London this year, including two new restaurants. The brand, which is led in the UK by Tony Lam and Aaron Burgess-Smith, will launch a delivery kitchen site in Greenwich on Wednesday (10 March). The group, which currently operates sites in Covent Garden, Haymarket and Angel, will follow this with two further restaurants, although locations of both have yet to be revealed. The dark kitchen site in Greenwich will cater for areas including Deptford, Blackheath, Lewisham and Peckham, and will be available through Deliveroo. Founded in Japan, Kanada-Ya opened its first site in the UK in 2014. It also has locations in Spain and Hong Kong. Lam and Burgess-Smith also operate the Machiya restaurant in Soho.

Deliveroo plans £16m fund for riders, places £50m-worth of shares aside for customers: Deliveroo, which is set to launch a planned $7bn (£5bn) stock market flotation on Monday (8 March), is lining up a £16m “thank you fund” for a quarter of its riders. The delivery firm is also putting aside £50m of shares for customers to back the business. The rider fund will only make payments to those who have worked with Deliveroo for at least a year and completed 2,000 orders. It will cover all 12 of the countries where the firm operates. Payments will be on a sliding scale from a minimum of £200 to a maximum of £10,000, depending on the number of orders that riders have delivered. The average payout per eligible rider is expected to be £440. More than half of those in line to receive the £10,000 sum are in the UK. Deliveroo customers will also be offered up to £50m of shares in the company's initial public offering, with the offer branded “Great food with a side of shares”. Customers will be able to apply for shares via the PrimaryBid website. Each customer will be able to apply for up to £1,000 of shares. The company said loyal customers would be prioritised if the offer were oversubscribed. Sky News reported Deliveroo is expected to make well over £1bn of new and existing shares available to investors as part of its long-awaited float, for which it plans to publish registration documents on Monday. The food delivery app will make its stock market debut at the end of the month.

Star Pubs & Bars publishes action plan following PCA investigation: Heineken-owned Star Pubs & Bars has published its action plan after it was fined £2m for “unreasonable stocking terms in proposed market rent only (MRO) options tenancies” by the pubs code adjudicator (PCA). The plan addresses the eight recommendations contained within the PCA investigation report. The recommendations set out what Star Pubs & Bars had to do “to make good the harm caused to tenants” including carrying out an audit of completed free-of-tie tenancies to identify any non-compliant stocking terms and offering to change them, or change their impact, without cost to the tenant. As well as setting out how Star Pubs & Bars will meet the recommendations, the action plan includes a commitment to review, amend or adjust its processes and procedures as well strengthen its internal checks and balances so the company can demonstrate evidence-based compliance with the pubs code. Star Pubs & Bars will also establish a compliance cabinet within its management system to ensure independent assurance. PCA Fiona Dickie said: “I will continue to monitor Star Pubs & Bars’ compliance with the plan to ensure it is implemented effectively and efficiently. I am currently engaging with Star Pubs & Bars on how the company is putting this plan into practice and will provide a further update on progress in due course.” An investigation by the PCA found Star Pubs & Bars had committed 12 breaches with the result it had “frustrated the principles of the pubs code”. As well as identifying how the company had offered stocking terms that had acted as a deterrent to tenants pursuing a free-of-tie tenancy, the PCA highlighted systemic corporate failures by Star Pubs & Bars in its approach to compliance. Star Pubs & Bars has appealed against the “disproportionate” £2m penalty.

Startle partners with Isolated Talks to launch radio station to support mental health: Music and technology provider Startle has partnered with Isolated Talks to create a radio station designed to help people stay positive, inspired and connected while raising awareness of mental health. Isolated Talks was launched in April 2020 to bring people a series of video talks and interviews with leading creative industry figures, recorded straight from their own living rooms. Isolated Talks Radio now brings together this catalogue of recorded talks with playlists specially curated by Startle to help listeners feel connected and drive positive well-being. Startle chief executive Adam Castleton said: “Launching Isolated Talks Radio is one way Startle can offer support using music and content that brings people together and creates a real sense of community – something that can be critical to people feeling isolated during lockdown.”
Startle is a Propel BeatTheVirus campaign member

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