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Tue 27th Apr 2021 - Whitbread plans £350m investment after 71.4% sales hit during pandemic
Whitbread plans £350m investment after 71.4% sales hit during pandemic: Whitbread has reported total sales in its 2021 financial year were down 71.4% year-on-year reflecting the impact of restrictions and closure of hotels and restaurants for substantial periods of the year. But it is planning to invest more than £350m this year as part of its bounce-back. The company stated: “In the UK, we have significantly outperformed the midscale and economy hotel market since reopening in August, with customer scores also remaining very strong throughout this period, despite the significant disruption. In Germany, the market and our hotels operated at low levels of occupancy due to the pandemic. Despite this, we were able to materially accelerate the growth of our hotel network during the year, with a total open and committed pipeline now standing at 72 hotels, providing a very strong platform from which to increase our brand presence. We are expecting to invest over £350m of capital in this financial year. Commercial initiatives, including the first major above-the-line Premier Inn marketing campaign for three years, are set to help both leisure and business demand recovery. In the UK, currently over 92% of our hotels are open, and we are ready to welcome leisure guests back to our hotels from 17 May, alongside the full reopening of all of our restaurants. Strong demand is expected for ‘staycations’ in UK tourist destinations throughout the summer, with business and event-led leisure demand starting to gradually recover thereafter. Currently 18 of our 30 operational hotels are open in Germany, with six of the temporarily closed hotels being refurbished and rebranded to Premier Inn. Despite the very recent tightening of government restrictions, our significantly enlarged estate puts us in a strong position to win market share when demand returns.” Alison Brittain, Whitbread chief executive, said: “The last financial year was one of the most challenging in our 279 year history, as we operated under significant covid restrictions which had many implications for our businesses, our customers and our people. Our business model enabled us to respond rapidly to the changing restrictions and to quickly adapt our operations as required, prioritising the health and safety of our colleagues and our customers. This response was possible due to the efforts of our colleagues in our hotels, restaurants and support centre, who continue to work tirelessly to maintain our very high operating standards, customer service and health and safety. I am extremely proud of, and grateful for, their incredible hard work and commitment in this most difficult year. Our ability to navigate through this period, with the advantages of our unique operating model, the strength of the Premier Inn brand, and our market-leading direct distribution model, has enabled us to continue to deliver strong market share gains in the UK. Our exposure to the faster recovering budget sector, our resilient customer mix, and the enhanced structural opportunities that the covid crisis has created, positions us well to continue this outperformance. The vaccination programme in the UK means we can look forward to the planned relaxation of government restrictions as we move into Summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from 17 May. We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand. We hold a uniquely advantaged position in the UK market as the largest operator with the strongest brand, and we will continue to invest in our estate to enhance our customer proposition. Our investment in marketing includes the first major above-the-line Premier Inn marketing campaign for three years, branded ‘Rest Easy’. In Germany, we remain confident of the opportunity to replicate our model in the UK and have materially grown our estate from six hotels at the start of the year to 30 operational hotels currently, and a total open and committed pipeline of 72 hotels, representing a nation-wide footprint with a presence in most major towns and cities. We continue to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business, including commencing the next three-year phase of our efficiency programme that will target £100m of cost savings. Combined with our financial flexibility and strong balance sheet, this gives us the ability and the confidence to invest with discipline and focus on strong long-term returns. We are well-placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, capitalising on the enhanced structural growth opportunities that will exist and driving long-term value for all our stakeholders.” Sales were £589.5m and the company mad a statutory loss before tax of £1,007.4m.

Brands with big UK growth plans lead the updated multi-site database, only available to Propel Premium subscribers: The updated Propel Premium multi-site database, which will be sent to Premium subscribers on Friday (30 April) at midday, has gained an additional 84 companies during the past month, many of which have big growth ambitions in the UK. Subscribers will receive a 4,600-word report on the 84 new brands, concepts and growth companies. They include: Popeyes Louisiana Kitchen, founded in the US in 1972, has announced plans to enter the UK this year, as has Japanese udon noodles and tempura restaurant company Marugame Udon, with a July opening planned for Spitalfields and a second site at The O2 to follow. Others include Australia’s largest Mexican quick-service franchise Zambrero and South Korea’s leading fried chicken brand PelicanaDoppio Malto has chosen Glasgow for its first opening in the UK, with the owner citing Italy’s connection with the city for the decision – it is the first of 100 planned sites. Miso Group, co-founded by Canadian chef Adria Wu, is planning a UK rollout of a technology-led Middle Eastern-inspired concept called Operation:Falafel. Hero Brands-operated healthy eating concept Choppaluna has announced a UK rollout, with two London sites being looked at to complement its flagship site in Bloomsbury. The debut site for JiJi’s, a new Israeli-Japanese dining concept, will launch in London’s Islington Square development in June. Meanwhile, Australian entrepreneur Dennis Turner and former Deliveroo global head of restaurant strategy Cengiz Rahmioglu are to launch a Thai-focused concept called Burning Rose. The exhaustive database now holds the details of 1,713 companies – and is only available to Propel Premium subscribers. The go-to database has the most comprehensive multi-site operator information in the sector – it 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. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. Premium subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel insights editor Mark Wingett. Email anne.steele@propelinfo.com to sign up.

Shaftesbury – West End has returned to 86% of December 2020 peak: Shaftesbury, the real estate investment trust which invests exclusively in the liveliest parts of London’s West End, has seen footfall return to 86% of the peak in December in 2020, just before London was placed into lockdown. Footfall has continued to build across the area following the reopening of non-essential shops, restaurants, cafes and bars on Monday 12 April. The company expects this trend to continue in the weeks and months ahead as office workers, a vital part of the West End’s economy begin to return to the area and, with indoor hospitality expected to be permitted from mid-May, increasing numbers of visitors being able to return to the area’s world-famous hospitality offer. To support the reopening, al fresco seating has been introduced across Carnaby, Chinatown, Fitzrovia, Seven Dials and Soho for over 3,000 people to provide safe, comfortable all-day dining opportunities for groups of up to six people, all while observing social distancing guidelines, bringing buzz and activity to the West End as people return to enjoy their favourite restaurant, bar or café. Chief executive Brian Bickell said: “It has been heartening to see people returning in large numbers to our iconic streets over the past week, in a safe and secure manner. The West End is beginning to feel alive once more, which has been made possible by the commitment that our partners and local businesses share with us to kickstart its recovery. Now as we approach the next milestone, it is important that this momentum is maintained to ensure this positive start to the easing of lockdown is sustained.”

Re-opening schedule on track: Boris Johnson has said there is now a ‘very good chance’ of ending coronavirus restrictions completely on 21 June in his most optimistic assessment yet. The Times reported: “The prime minister said that he still expects a third wave of the virus but vaccination had built ‘some pretty robust fortifications’ against it. While cautioning that the virus was not ‘totally licked’, Johnson expressed confidence that legal restrictions on social contact would come to an end as planned. This would mean the return of mass gatherings, nightclubs, conferences and other events that did not reopen last summer. Scientific advisers are also increasingly optimistic that infection rates, hospital admissions and deaths will continue to fall for at least another month, allowing an end to emergency coronavirus laws on Midsummer’s Day. However, debate continues about whether it will be possible to return completely to normal contact without covid status certificates or reduced crowding in public places. A review of social distancing is due to report on whether restrictions such as the ‘one-metre-plus’ rule will need to be maintained beyond the summer. Pressed on claims that he said he would rather see ‘bodies pile high in their thousands’ than impose lockdown, Johnson said that voters actually wanted to know ‘what’s the world going to look like on 21 June? To what extent are we really going to be powering through this?’ He said: ‘As things stand I think we’ve got a very good chance of really opening up totally on 21 June. But we’ve got to be cautious and go on the data, not the dates.’ ”

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