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Thu 18th Mar 2021 - Propel Thursday News Briefing

Story of the Day:

Lord to take High Court action after government fails to provide any new roadmap evidence: Sacha Lord, night-time economy adviser for Greater Manchester, is to take High Court action to force a judicial review of the reopening roadmap after the government failed to provide any new evidence why indoor hospitality cannot open the same day as non-essential retail. Lord is demanding pubs and restaurants be allowed to have customers indoors from Monday, 12 April – the same date as non-essential shops reopen. Tweeting earlier on Wednesday (17 March), Lord said: “The whole legal team now have everything prepped and ready. The government has until the end of today to show us the evidence. Hospitality, with measures in place, should open the same day as non-essential retail.” Just after 6pm, he followed up saying: “We've just received the government's response. It has failed to introduce any new evidence as to why indoor hospitality cannot open the same day as non-essential retail. We'll now be working through the night to take our case to the High Court for a judicial review.” Over the weekend, serial sector investor Hugh Osmond joined Lord in backing his legal action to force a judicial review of the roadmap. A report published earlier this week by the House of Commons Public Administration and Constitutional Affairs Select Committee, looking into how well the government has used and shared data during the pandemic, stated “the hospitality and entertainment sectors have not seen sufficient data to underpin decisions relating to their industry”. The report entitled “Covid-19 and data driven decision making”, stated: “When speaking to business owners, a key frustration was that measures they had put in place in order to reopen after the first national lockdown, had not been taken into account when local lockdowns and tiering were brought in later in the year. They also raised concerns there would be unintended consequences to the tiering decisions, such as people meeting in private households rather than at their covid-secure venues. The hospitality and entertainment sectors have not seen sufficient data to underpin decisions relating to their industry. Building trust with these sectors is absolutely essential and the level of transparency has been insufficient. The government should publish the data that underpins the restrictions that will remain in place on businesses at each step of the roadmap as a matter of urgency.” At the start of this month, it was revealed the government was forced to drop its “substantial meal” policy for hospitality following judgement in the separate legal case brought by Lord. 

Industry News:

Sponsored message – Yumpingo publishes whitepaper revealing how top hospitality brands are experiencing double-digit NPS gains: Yumpingo, the complete guest experience management platform, has published an in-depth whitepaper titled “Recovery Through the Eyes of Your Guests”, revealing the adoption and demonstrated success of modern guest experience management. The piece breaks down how the key metric of measuring customer sentiment, a brand’s Net Promoter Score (NPS), directly and indirectly correlates with service execution and sales growth. Leading hospitality brands – 7 Bone Burger Co, Bistrot Pierre, Bone Daddies, Rosa Mexicano, Hickory's Smokehouse, Olive Tree Brasserie, YO! and New World Trading Company – illustrate their NPS success stories throughout the paper, sharing their strategic approach to leveraging customer satisfaction insights to improve service and dish performance and produce more happy guests across every venue, every shift. Gary Goodman, founder and chief executive of Yumpingo, said: “As the hospitality industry prepares to stir from hibernation, leading companies are using the crisis as an opportunity to improve everything they do, with a determination to emerge better and stronger – connecting teams and performance around the voice of the guest across every channel, in store, off premise and online.” To find out how to transition your brand into a data-driven, customer-centric business, download a free copy of the whitepaper here. 
Yumpingo is a Propel BeatTheVirus campaign member

Propel and Startle to host free webinar on curating magical in-store experiences featuring Leon and Bear: Propel and music and technology provider Startle are to host a free one-hour webinar around curating magical in-store experiences with the help of music, technology and behavioural science. The “Are you ready for love?” webinar will cover a myriad of timely questions including tackling the atmosphere change of smaller crowds, delivering safe experiences that don’t lack personality and much more. Startle will be joined by Richard Shotton, author of the best-selling book The Choice Factory; Shereen Ritchie, managing director of natural fast food brand Leon; and Craig Bunting, director of independent coffee brand Bear. Over the past year, consumer’s choices were dramatically reduced but when lockdown lifts, choice will once again open up. The webinar presents a unique moment to recapture customers and will build on Startle’s “Mind The Gap” report findings. The webinar will be sent out at 9am this morning (Thursday, 18 March).
Startle is a Propel BeatTheVirus campaign member

One in four consumers intending to eat and drink out more than before pandemic, third likely to join loyalty scheme: One in four (39%) consumers are intending to eat and drink out more often when the lockdown restrictions are lifted, compared with before the pandemic, new research has revealed. The figure rises to two-thirds (66%) among 18 to 24-year-olds and 55% among 25 to 34-year-olds. This pent-up demand is strongest in the north east region, with 55% of residents intending to eat and drink out more frequently, followed by Yorkshire (45%) and London (44%). The findings are drawn from a new consumer loyalty insights report by hospitality CRM provider Airship and hospitality gift card platform Toggle, in collaboration with academics from Sheffield Hallam University. While alternative revenue streams for hospitality businesses emerged throughout 2020, two-fifths (41%) of consumers said they were unlikely to continue to subscribe to at-home experiences after covid-19. The data also revealed almost a third (30%) are now more inclined to join a loyalty scheme with a hospitality operator compared with before the pandemic. This rises to 52% among 18 to 24-year-olds. Almost half (47%) indicated they would be interested in joining a loyalty scheme with their local pub. A third (33%) said the minimum free cash value that would incentivise them to visit a hospitality venue to redeem an offer was only £5, followed by £2.50 (18%). 
Airship and Toggle are Propel BeatTheVirus campaign members

‘Start-Up’ funding for Scottish hospitality business not an adequate substitute for those still unable to trade, warns NTIA: The “Start-Up” funding for hospitality businesses in Scotland is not an “adequate substitute” for those companies that will still be unable to trade, the Night Time Industries Association Scotland (NTIA) has warned. As part of the lifting of lockdown, grants of up to £19,500 for hospitality and leisure businesses will be paid in April to help businesses reopen progressively. These one-off grants will replace ongoing Strategic Framework Business Fund (SFBF) payments. Eligible businesses must have applied to the SFBF by Monday (22 March) in order to receive them. The last four-weekly SFBF payment of up to £3,000 will be paid on Monday, as scheduled. NTIA Scotland chairman Mike Grieve said: “We would highlight the need for ongoing support for the late-night economy with the withdrawal of the SFBF funding for closed businesses. The ‘Start-Up’ funding is not an adequate substitute for those businesses that will still be unable to trade, many of which have now been completely closed for a full year. The funding for many businesses thus far has been erratic and inadequate, and has left many businesses with huge debt burdens they will find very difficult if not impossible to manage over the recovery period. If nightlife can’t reopen this summer there is a serious risk this vibrant cultural contributor to Scottish life may be irreparably damaged.”

Coca-Cola Great Britain launches 'open' programme to help high street recovery: Coca-Cola Great Britain has announced it will help its small, independent customers “find the secret to business success” under a new “Open” accelerator programme designed to help cafes, pubs and restaurants recover from the covid-19 pandemic. The company said a handful of entrepreneurs from across the UK will get exclusive access to senior experts at Coca-Cola GB, Coca-Cola European Partners, Costa Coffee and Innocent, to gain a rare look under the bonnet of these brands and discuss how their own business can respond to the challenge presented by three national lockdowns. They will also have dedicated one-to-one consultations with behavioural scientists Influence at Work. Jon Woods, general manager at Coca-Cola Great Britain, said: “The past year has been the toughest in memory for hospitality businesses and we know it’s our smallest customers who have the biggest challenge ahead. That’s why our senior leaders have committed their time and expertise to helping these businesses get back on their feet. Through this programme we will help some of our valued high street partners survive and thrive in the post-covid era.”

JD Wetherspoon and IHG Hotels & Resorts join Zero Carbon Forum: JD Wetherspoon and IHG Hotels & Resorts are the latest operators to join the Zero Carbon Forum. The forum is a non-profit collaboration joining forces to build an ambitious industry roadmap to reach net zero at pace. Both Wetherspoon and IHG Hotels & Resorts have committed to decarbonise their operations and demonstrate what’s possible when it comes to cutting emissions. The work of Zero Carbon Forum members will serve as examples both within and outside of the industry. Leaders from across the sector are working together with industry experts to drive collaborative initiatives and share best practice and insights. The forum will publish its net zero roadmap and establish an official sector position to government this summer, ahead of the United Nations Climate Change Conference in November. Mark Chapman, founder and chief executive of Zero Carbon Forum, said: “I’m delighted to welcome these two leading forces within the hotel and pub sectors as our newest members. Their respective knowledge and resources will help facilitate our goal to devise and implement a credible, ambitious decarbonisation plan across the entire industry.”

Job of the day: COREcruitment is looking to recruit a managing director for a European region of a growing international brand. This position will support dedicated teams across ten countries, driving both brand excellence and new business growth. The company has had recent, considerable growth. The position would suit a senior leader with considerable corporate experience in large, multinational brands. It would also be beneficial to have franchise, partnership or account management experience alongside leading a brand operation. European operating experience is preferred. A salary between £120,000 and £150,000 plus bonus and benefits is being considered. Anyone interested can email for a confidential chat.
COREcruitment is a Propel BeatTheVirus campaign member

Company News:

Holmes – we will come out of this a lot more purpose-driven business: Azzurri Group will come out of the crisis a more purposeful and value-driven business, chief executive Steve Holmes has said. Speaking at the Propel Multi Club conference, Holmes said the TowerBrook Capital-backed company’s online meetings had resulted in broader topics being discussed including around the environment, carbon reduction and mental health support, which he expects the company to invest more heavily on and move the agenda on. He said: “We’ve become a lot closer as a business, which is ironic as no one has been able to meet up. In times like this, you can’t over-communicate but you can under-communicate so we have been talking a lot to our teams. Borne out of the fact we are having a lot more conversations with everybody across the whole organisation, it feels a lot flatter than it was before and we are having real conversations with our people across all our brands about the things that really matter. When you have them face-to-face regularly, it seems easier to make a positive difference. There has been a real sense of community, the teams have rallied, supported each other, and supported local communities, fed the NHS and helped local charities, and it has been wonderful to see how many people have pulled together in that way. We want to capture that spirit and continue to build on that as the business reopens. Clearly, we will be serving people great food and will innovate around food and design and all those other bits and pieces, but I don’t want us to forget what we are doing it for and the greater good as well.” Propel Premium subscribers can now receive access to the video of the Propel Multi Club conference featuring Holmes and other industry leaders. They should email to receive an access code to view the conference. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. To sign up, email

Young’s expects to deliver positive cash flow by May if reopening schedule proceeds, updates on financing arrangements: Young’s, the Patrick Dardis-led pub company, has said it expects to deliver positive cash flow in May if the reopening schedule proceeds as planned. The company plans to reopen about 140 of its managed pubs with outdoor spaces on or around 12 April with the remainder following on or around 17 May as per the government’s reopening roadmap. Young’s has also updated on its finance arrangements. It stated: “The noteholders and the company's banks have agreed to extend the company's monthly available liquidity test up to and including March 2022, with a headroom requirement of £25m. The company will shortly be seeking an extension, through to November, of its £20m bilateral revolving credit facility with NatWest. In May, the company will repay the £30m borrowed through the Covid Corporate Financing Facility from existing facilities. On the basis of the above, the company will have committed available facilities of £255m (inclusive of the £25m required to meet the available liquidity test).” In view of the extensive period of closure of the company's pubs in the current financial year and the expected lower levels of trade during the first three months of the new financial year starting on 30 March 2021, Young’s said it would not be paying any dividend for the current financial year. The company said it intends to resume dividend payments “as soon as is appropriate”. Young’s has, however, agreed with NatWest and the holders of its senior secured notes any dividend payments during FY2021-22 will not exceed £5m in aggregate, “but there is no restriction on the company recommending a final dividend with its results for FY2021-22, payable in the following financial year, as normal”.

Wilkinson – operating between 12 April and 17 May will be the biggest challenge for our front-line teams: Operating between 12 April and 17 May for the brand’s front-line teams will be the biggest challenge in terms of reopening, Simon Wilkinson, chief executive of Byron has said. From 12 April hospitality companies in England can trade from outdoor areas, with indoor hospitality reopening on 17 May, under restrictions. Talking at the Propel Multi Club conference, Wilkinson said: “We have been doing delivery across the majority of the estate throughout the lockdown. Even though that is with a reduced team, we have still been training and getting new initiatives ready to launch from April and May onwards. It is the third lockdown, so unfortunately, we have got quite used to closing and reopening – the team has become pretty adept at that. I’m fairly optimistic there will be a lot of pent-up demand. But I potentially see us being less efficient from 12 April to 17 May in terms of profit and loss than we have been up to 12 April, because you could have one day of great sunshine, then one day of rain, and you have to have a really flexible workforce who want to work with you and adapt to that. Also managing customer expectations – if they book a table and it rains you are then dealing with a situation that you have let people down. So, I think the operation between 12 April and 17 May for our front-line teams will be the biggest challenge in terms of reopening.” Wilkinson said the business, which was acquired via pre-pack administration by Calveton UK under newly formed company Famously Proper for £4m in August last year, had benefited from having time to reflect and pause over the past year. He added: “It’s allowed a lot of clarity and we’ve focused on things like technology and delivery. Our structure has also become flatter and without the pause and re-evaluation this would not have happened.” Propel Premium subscribers can now receive access to the video of the Propel Multi Club conference featuring Wilkinson and other industry leaders. They should email to receive an access code to view the conference. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. To sign up, email

Punch to invest £1m on outdoor spaces to prepare for April reopening: Punch is to invest £1m on supporting its pubs prepare for outdoor reopening in April. The company said Inside/Outside is an investment programme specifically designed to help its publicans to “maximise the opportunity of trading safely outside” while complying with government guidance. The company said the scheme will allow many pubs to open outdoors on 12 April, including plenty that previously would have not had the capacity. Punch said 662 of its sites (72%) in England are set to welcome guests back to their local next month. The group said: “Punch and their publicans have been working in tandem to create solutions from new furniture to stretch tents, festoon lighting, cosy huts, and all-important outdoor heating. The scheme has already seen hundreds of projects completed across the country, with many more currently underway.” Punch managing director Andy Spencer said: “It remains vitally important to remember pubs will be operating at a significantly reduced capacity. We need restrictions to continue to be relaxed during the reopening period to ensure the long-term survival of the British pub.”

PizzaExpress to open a third of its estate for outdoor dining: PizzaExpress will reopen a third of its restaurants for outdoor dining from 12 April. The David Campbell-led business said it is planning to open 118 of its sites in England, for what it is calling “Al Fresco April”. The circa 370-strong chain is yet to confirm when its restaurants in Wales, Scotland or Northern Ireland will welcome back customers. Zoe Bowley, managing director at PizzaExpress, said: “We’ve really missed buzz and bustle and seeing our customers enjoying their favourite pizza. Our cook at home range and click and collect and delivery services have been immensely popular during the past few months, but we can’t wait to fire up our ovens and swing open our doors again. Of course, we’re set to reopen all of our restaurants in England in May for both indoor and outdoor dining.”

KFC UK & Ireland expands Deliveroo partnership: KFC UK & Ireland has revealed a major expansion of its partnership with Deliveroo, with the launch of up to 200 new restaurants across the UK this year to the platform. The companies have also signed a new, multi-year partnership with exclusive offers only on Deliveroo. It comes following the the launch of KFC on Deliveroo at 130 sites in 2020. The expansion means KFC will be available to Deliveroo customers from even more sites, including in towns such as Corby, Dorchester and King’s Lynn. To mark the expansion, KFC and Deliveroo are re-running the 20% discount offer on “Wings Wednesday”, available to order from all restaurants via the Deliveroo platform. Stephen Goldstein, European vice-president of restaurants at Deliveroo, said: “We are proud, at this critical moment in KFC’s growth trajectory, it has chosen to expand with Deliveroo. We are honoured to be able to offer some amazing exclusive deals, such as the 20% off ‘Wings Wednesday’, and are excited to delight an ever-growing number of KFC’s fans across the UK in the year ahead.”

Wingstop eyes Manchester opening: Lemon Pepper Holdings, which is rolling out US chicken brand Wingstop across the UK, is in talks to open a site in Manchester, Propel understands. The company, which recently signed on five new sites, is believed to be in talks to take the former Bella Italia in the city’s Piccadilly Gardens. At the start of this month, Propel revealed Wingstop had agreed a “trilogy” deal with landlord Hammerson to open three new regional locations at its Bullring (Birmingham), the Oracle (Reading) and Cabot Circus (Bristol) schemes. Following the opening of its tenth UK location in Gloucester Road, South Kensington, late last year, Wingstop UK is now set to open sites in the former EAT at the Bullring, the former Chick-Fil-A at the Oracle, and the former Dorothy Perkins in Bristol’s Cabot Circus. With plans to reach 20 locations in the UK by the end of 2021, Wingstop is also set to open this year in Canary Wharf and Kingston-upon-Thames, where the brand will be occupying the former Pizza Hut. The brand, which operates more than 1,500 locations worldwide, is expected to announce further regional openings in the coming months.

JD Wetherspoon to reopen 60 Scottish pubs on 26 April: JD Wetherspoon is to reopen 60 of its 61 pubs in Scotland from 26 April. The only one not reopening is The Blacksmith's Forge in Dalkbeith, Midlothian, which is closing permanently. In accordance with Scottish government rules, the reopened pubs will serve food and non-alcoholic drinks inside and will also be able to serve alcohol – without the requirement for a meal – in external areas. Wetherspoon will also open seven of its hotels within its pubs on the same date. They are the King's Highway, Inverness; Saltoun Inn, Fraserburgh; Cross Keys, Peebles; White Lady, Corstorphine; Golden Acorn, Glenrothes; Guildhall and Linen Exchange, Dunfermline; and the Jollys Hotel, Broughty Ferry. Helen Dumbreck, Wetherspoon regional manager for Scotland, said: “We are looking forward to welcoming both customers and staff back to our pubs. Our pubs play an important part in the social life of their respective towns and cities and it is great news they will be able to reopen soon. Each of our pubs will observe all the necessary safety rules around covid-19.”

Ramsay lines up a second ex-Byron site for Street Burger opening: Chef Gordon Ramsay has lined up a second London-based ex-Byron site for his fledgling Street Burger concept. Propel understands the chef is to take the ex-Byron in Kensington High Street for an opening later this summer. As previously flagged up in Propel Premium, Ramsay has confirmed he had secured the ex-Byron site in London’s Charing Cross Road for an opening under the new burger concept, which he launched at the start of December last year in the One New Change development in St Paul’s. It is thought the chef is also in talks to take the ex-Gourmet Burger Kitchen site in Maiden Lane, Covent Garden, for another Street Burger site. Ramsay is also believed to have made the highest offer to take the former Giraffe site in The Oracle in Reading. Ramsay currently has 35 restaurants around the world and plans to open a fourth site under his Street Pizza concept at the Battersea Power Station development where Mother Pizza previously traded. 

Cattle Grid founder secures former Foxlow in Chiswick site for next opening: Steve Novak, founder of steakhouse concept Cattle Grid, will add to his London estate of bars and restaurants with a new opening on the former Foxlow site in Chiswick. The new site in Barley Mow Passage will be called Betty, and according to Novak will be modelled on his Hannah bar in Lavender Hill, Battersea. Novak also operates wine bar Heidi in Balham, The Earlsfield in south west London, and The Charlotte in Southwark. He also operates the last remaining Cattle Grid site in Windsor.

Intermediate Capital Group acquires majority stake in bingo operator Buzz: Caledonia Investments has announced it has sold its majority shareholding in Nottingham-based bingo club operator Buzz Bingo to Intermediate Capital Group (ICG) for a nominal fee. ICG, which is already a long-term investor in Buzz, is injecting £18m into the business, which restructured via a company voluntary arrangement (CVA) last summer. Buzz, which rebranded from Gala Leisure in May 2018, said it had also managed to secure a new £10m credit facility from Barclays, which will support further investment into the company, including the growth of its online site. Caledonia Investments said its investment in Buzz was valued at nil as of 28 February 2021, compared with £22m as of 30 September last year. Buzz refinanced in the summer of 2020 via the aforementioned CVA, in which Caledonia injected £22m. The process saw the business close 26 bingo halls, leaving it with 91 sites. Buzz Bingo chief executive Chris Matthews said: “This agreement provides us with the financing we need to ensure our success when covid-19 restrictions ease. Prior to covid-19, we were in a strong position – and growing. But lockdowns meant we have only been able to fully trade for about six weeks since March 2020. The new funding ensures we will continue to thrive.”

Douglas Jack – SSP’s £475m rights issue is sensible strategy to reflect tough market backdrop: Peel Hunt leisure analyst Douglas Jack has argued the £475m rights issue by UK-based travel hub foodservice company SSP Group is a sensible strategy to reflect a tough market backdrop. Issuing a “Hold” note on the shares with a target price of 300p, Jack said: “The £475m rights issue should enable SSP to repay its £300m Covid Corporate Financing Facility in February 2022 and extend its bank facilities (from July 2022 to January 2024) with no increase in the cost of debt. Able to cover the company's reasonable worst-case scenario, it could bring net debt/Ebitda to below 1.5 times in 2023E. Our revenue forecasts reflect SSP’s assumptions of passenger volumes being down circa 73% in 2021E, down circa 27% in 2022E and down circa 7% in 2023E, all versus 2019. By 2024, growth in leisure travel (60% of SSP’s business) is expected to broadly offset business travel not fully recovering. For 2021E and 2023E, our Ebitda downgrades assume a 25% drop-through from lower sales. We assume slightly faster expansion, but nothing significant, which leaves potential revenue upside for 2023E and beyond. Some recent cost savings should apply post-covid-19, possibly enabling 2019’s margin levels to be reached in 2024E despite rising costs in some parts of the world. Net debt should currently be close to £840m (pre-rights issue) by our estimates, with cash burn continuing at £25m to £30m per month. Revenue needs to improve beyond minus 50% (versus 2019) to stop the cash burn. Based on the new revenue projections, £300m of net debt versus £350m of Ebitda (IAS 17), providing £400m of headroom for expansion (based on two times net debt/Ebitda) is possible in 2024E. As expected, the international travel market is not recovering quickly, with the ongoing risk covid-free countries restrict in-bound travel. Also, there is a multitude of reasons why business travel may not fully recover. Against this backdrop, SSP is right to raise more equity. Although the shares may consolidate under current market conditions, the additional firepower could be the source of an attractive catalyst in due course.”

Wing Shack founder to launch pop-up store for yolk-based delivery concept: Josh Jarvis, founder of wings-based concept Wing Shack, is to open a pop-up store for his yolk-based delivery concept, Egg ’n’ Stuff. The outlet will open in Holloway Road, Islington, on Saturday (20 March). Jarvis initially developed the concept during lockdown last year initially launching on Deliveroo and the new pop-up store will be open for collection and delivery. The menu includes The Sausage, Egg and Cheese – British sausage patty, free-range Clarence Court egg, American cheese and house sauce served in a warm brioche bun; and The Hash Brown, Egg and Cheese – crispy fried hash brown, free-range Clarence Court egg, American cheese served in a warm brioche bun. Sides come in the form of salad, fries, slaw and hash browns. During the evenings, Wing Shack and its plant-based sister concept Vegan Shack will be available for delivery from the outlet. 

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