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Morning Briefing for pub, restaurant and food wervice operators

Fri 22nd Oct 2021 - Update: Sector’s ‘plan B’ fears, delivery and takeaway sales continue growth
Hospitality sector fears going under if government imposes new covid ‘plan B’: Pubs, bars, restaurants and hotels could not survive a second Christmas lost to covid-19 restrictions, hospitality bosses have warned, as the government faces growing pressure to impose “plan B” measures to curb the rise in coronavirus cases. Health secretary Sajid Javid said on Wednesday (20 October) that while new infections could hit a record 100,000 a day, he would not be reintroducing measures such as working from home or compulsory mask-wearing “at this time”. But the British Medical Association said later that day it would be “wilful negligence” not to enact the government’s plan B in England to prevent the NHS being overwhelmed. Mitchells & Butlers chief executive Phil Urban said ministers had left it too late to address rising case numbers and any action now could devastate the hospitality industry. He told The Guardian: “People are very nervous and if you move to plan B, it puts Christmas at risk. The industry is not out of the woods and just as we get our momentum back, we’d have the rug pulled out from under us.” He said some restrictions, such as mask-wearing, would be tolerable as long as tougher curbs that could put festive trade at risk were avoided. Hospitality businesses typically earn 40% of their annual profit between Halloween and New Year’s Eve, according to UKHospitality chief executive Kate Nicholls. She said: “We lost Christmas in its entirety last year, so it’s desperately important for survivability, getting you through the bleak months of January and February when people don’t come out as much. A lot of businesses are still fragile. Any knock at this point in time could have an impact on viability. People will just go to the wall.” Nicholls said customers were already cautious about booking ahead for the festive period as covid-19 cases rise, with the UK this week recording the highest number of deaths since March. Advance bookings for the festive period would usually be 90% complete by the August bank holiday, she said, but were running at much lower levels this year. On Thursday (21 October), the government denied it was weighing up a “plan C” option, under which any household mixing at Christmas could be banned in England. Night Time Industries Association chief executive Michael Kill warned restrictions on that scale would be “catastrophic”. “We don’t want to end up being the scapegoat for an issue that isn’t around our industry,” he said, adding evidence suggested the biggest rise in cases was in secondary schools.

67 multi-site companies set to join updated Premium Database of Multi-Site Companies: At least 67 new multi-site companies, operating 493 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday, 29 October, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, will feature a number of multi-site pub operators, including Wear Inns, which was founded in 2006 and has a portfolio of 25 pubs across the north east and Yorkshire; and Tiere Group, which is looking to build a ten-strong estate. The business recently acquired its second site with Heineken-owned Star Pubs & Bars, in Shirley, with a reopening planned for December. Also added this month is Advocate Group, which has recently secured The Country Park Inn, in Hessle, to its 30-strong estate. In addition, north west-based operators Jamie Whittaker and Kelly Vickers, who have taken on their second Star Pubs & Bars site, are planning to establish a portfolio of five “top quality family-friendly pubs” in the region in the next three years. Premium subscribers will also receive a 5,200-word report on the new additions to the database. The comprehensive database is updated monthly and 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. The database features more than 2,000 companies. Alongside this, Premium subscribers will also receive the fourth edition of the New Openings Database, which is produced in association with StarStock, on Wednesday, 3 November, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The fourth edition will include a 11,000-word report on the new additions to the database. Premium subscribers also receive access to another database – the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group. The Blue Book, which is also updated monthly, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. 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 plus regular video content and regular exclusive columns from Propel insights editor Mark Wingett. In this week’s Premium Opinion, which will be sent to subscribers on Friday (22 October) at 5pm, he looks at how the sector is meeting the sustainability challenges and if, as the industry comes under increasing cost pressures, values are jettisoned for value. He also looks at possible new investment for Brasserie Bar Co. Meanwhile, John Barnes, non-executive director of Rockfish, writes about some of the findings from his new book Altering Course, which chronicles some amazing stories that came out of the crisis. 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. To subscribe, email

Delivery and takeaway sales more than double on pre-pandemic levels for managed pubs and restaurants in September, not cannibalising eating-out spend: Britain’s leading managed restaurant and pub groups more than doubled their delivery and takeaway sales from pre-pandemic levels in September, the latest edition of the CGA & Slerp Hospitality at Home Tracker shows. Combined sales were 130% higher than in September 2019, when businesses were trading as normal; and 35% higher than in September 2020, when they were operating under covid restrictions. Deliveries and takeaways were worth 29% of the total sales of all businesses contributing data to the Tracker. September’s growth in delivery sales was more than five times higher than takeaways, reflecting the popularity of third-party delivery platforms. Drinks accounted for just under 10% of all sales. CGA data suggests delivery and takeaway sales are not compromising consumers’ spending on eating and drinking out. The September edition of the separate CGA Coffer Business Tracker, with a different cohort of contributing companies, indicated managed restaurants, pubs and bars grew their sales by 8% on September 2019. “Delivery and takeaway sales have dipped from the heights of lockdown, but September’s figures show they will stay a crucial part of restaurant and pub operations,” said Karl Chessell, director at CGA. “It’s particularly pleasing to see that at-home sales seem to be complementing rather than cannibalising eat-out spending, even as restaurants and pubs settle back towards normality.” Slerp founder JP Then said: “The businesses that are thriving with off-premise sales are keeping things interesting for their customers. They are offering unique menu items that are exclusive through their own online channels, which are often only available for a limited time. As we move into the last quarter of the year, the festive online offering can be a significant revenue contributor while the landscape remains uncertain.”

Scottish hospitality staff ‘losing up to £200 a week’ due to covid passport scheme: Hospitality staff in Scotland could be losing up to £200 a week due to venues being forced to close early because of vaccine passport regulations, the Scottish Hospitality Group (SHG) has warned. The trade body said the sector is in the midst of a “recruitment pandemic” and leaving businesses unable to implement the scheme. Under the regulations to enforce vaccine passport checks, venues must be closed by midnight. SHG believes this has left many hospitality workers missing out on up to three hours of wages each night – the equivalent of £200 per week. The definition of a nightclub has affected approximately 2,000 Scottish businesses, but SHG said only about 120 of these would traditionally be viewed as nightclubs by the public. Spokesman Stephen Montgomery said he had written to cabinet secretary for finance and economy, Kate Forbes, and minister for business, Ivan McKee, about his concerns last week, but had yet to receive a reply. He wrote: “We are in the midst of a recruitment pandemic within the hospitality sector, where we are frantically trying to recruit staff for our primary positions within the business to allow them to function properly. The introduction of the covid certification has now added further recruitment issues, as we now need to have door staff on to check these on the customers entry to the premises. This now means for the larger percentage of those now captured, who would have previously operated to 2am or 1am without the need for door staff as a condition of licence, now find themselves shipwrecked or hung out to dry because they are now unable to recruit for that position to enable them to remain open. This has now meant by default they are being forced to close at midnight, and not only does the business suffer financially, but staff are now having their hours cut, in some cases by three hours per night. This is leaving them at a financial loss of on average £150 to £200 per week, without any financial help from the Scottish government.” SHG is calling on the government to scrap the vaccine passport scheme.

Groen – Grubhub to play a part in the consolidation of US market: The boss of Just Eat said he expected its recently acquired Grubhub business to play a part in the consolidation of the American food delivery market, but he rejected the idea of selling it, reports The Times. “Over time there will inevitably be consolidation in the wider US on-demand delivery market, as various players combine to optimise the last mile,” Jitse Groen said, adding the company “expects Grubhub to be involved in this consolidation when it comes and intends to do so from a position of strength”. The company acquired Grubhub in June for $7.3bn, creating the biggest food delivery operator outside China. When asked whether he would consider selling or merging the entire Grubhub business, the Just Eat Takeaway chief executive played down the notion. However, Groen said he was “always open” to mergers and acquisitions activity and “anything that makes Grubhub a much stronger player, we’ll look at it”. Investors have been calling on the business to address its position in the US, where Grubhub is up against rivals including UberEats and DoorDash, suggesting it should consider selling parts of its operations. They also have demanded clarification about its strategy on grocery delivery in Europe, where the Amazon-backed Deliveroo has stolen a march. Groen said Just Eat Takeaway was taking long-term decisions rather than seeking short-term gains. He said 2021 had been “a period of peak losses” amid heavy investment across the business and he argued there was “a huge amount of growth to come”.

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