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Morning Briefing for pub, restaurant and food wervice operators

Thu 18th Nov 2021 - Harden’s – Pandemic causes record closures and churn amongst London restaurants
Harden’s – Pandemic causes record closures and churn amongst London restaurants: London restaurants have suffered record closures and churn. That’s the conclusion of the 30th edition of Harden’s London Restaurants – the 2022 publication – and its associated restaurant-finder app, which go on sale next week. The guide’s analysis is based on two years of averaged data, because covid-19 prevented the publication of its 2021 edition, causing the guide to skip a year. By averaging two years of data, the results potentially understate the severity of the restaurant market’s low point, as it spreads the effect of closures evenly over the two-year period. But – in showing two years of identical data – the data series emphasises the prolonged nature of the downturn. The guide records a rate of 149 newcomers added per year over the period. This is in the middle of the range of 107–200 added per year in the previous ten years. Closures, however, were at a rate of 125 per year over the two-year period. This level is worse than 2018’s former high of 117 closures, and the former spike of 113 in 2003 (a year badly hit by the SARS epidemic). Net openings (that is openings minus closures) were at a rate of 22 per year: comparable with the lowest levels seen over the 30-year period (cf the early nineties, and 2003). Such weak figures are more dramatic in the current period: firstly, because they are relative to a much larger market than in former weak years; and secondly because they represent a two-year period, whereas historically individual weak years have been downward spikes followed by immediate strong growth. Viewing these figures on the graph of London Net Openings – which carries a pronounced hump between 2014 and 2018 – raises a question as to whether the four-year period of record growth in the middle of the decade 2010-2020 was fundamentally unsustainable even without the pandemic. The dramatic nature of the covid-19 induced downturn is most evident in the statistics on churn. At 1.18 for two years, not only is this ratio the lowest recorded, but it dramatizes the unprecedented severity of the covid-19 years, compared with prior downturns where an increase in churn has quickly been reversed in each case. Guide co-founder, Peter Harden, said: “Even before March 2020, over-supply was a problem in the London restaurant market, and the pandemic meant there was absolutely nowhere to hide. The result has been the most dramatic period of closures and churn that we have yet seen. Recessions normally hit weaker performers. In the closures we record, the fall-out is more randomly spread, with many excellent businesses shuttering due to factors as diverse as a City-based location, recalcitrant landlords, or a decision to take retirement and bow out gracefully. And all the above is before we start to factor in the new normal of the dire staff shortages created by Brexit.” The new guide records a large number of high profile closures, many associated with celebrity names over the two-year period. These include: Alyn Williams (although the circumstances were singular); The Bleeding Heart Restaurant (though tavern and brasserie continue to operate); Bryn Williams at Somerset House; The Dairy; The Frog Hoxton (relocated); Galvin HOP (reformatted) and Galvin at the Athenaeum; The Gilbert Scott (to be relaunched in new ownership); The Greenhouse; Hai Cenato; Hix, and Hix Oyster & Chop House; Kym’s by Andrew Wong; Merchants Tavern; Rochelle Canteen at the ICA; Roux at Parliament Square; The Square; and Texture.

Harden’s – average price of dinner is £64.14; African and Japanese cuisine on the rise: The average price of dinner for one at establishments listed in this guide is £64.14 (cf £59.28 two years previously). Prices have risen by an annualised rate of 4.0% in the past two years. This rate remains above the general annual inflation rate of 3.2% for the 12 months to August 2021. The rise is most marked amongst pricey restaurants (over £100 per head). In this group, the annualised growth is a significant 8.8%. There has also been a marked change in restaurants for which the guide’s formula price is over £200 per head. Whereas in the 2020 edition, only one restaurant (The Araki) had a formula price above £200 per head, in the 2022 edition, there are seven: Alain Ducasse at The Dorchester; The Araki; Endo at Rotunda; Ikoyi; Kitchen Table; Mãos; and Sketch (Lecture Room). And the number of restaurants with a formula price over £150 per head has risen from nine to 24. This formula price assumes a bottle of house wine spread between two, and thus represents the minimum one could sensibly spend in a luxury restaurant. After new Modern British (66) openings, Japanese cuisine was the most popular for newcomers this edition, accounting for 23 of the debuts (just beating Italian cuisine which was the designation for 22). Having been a rarity in early editions of the guide, the guide suggests that Japanese dishes are becoming fully integrated into UK food culture. The introduction further suggests that African and Afro-Caribbean cuisine as a category is breaking through into the luxury restaurant sector for the first time. Peter Harden comments: “For decades, African or Caribbean restaurants have flown under the radar as far as the general foodie press was concerned. They served their communities and locals but lacked any central London address and/or PR profile. But the arrival of new restaurants like Akoko, Antillean, Chuku’s, Chishuru and Tatale – to join the likes of Ikoyi and Stork – represent a striking break from the past. Firstly, the press and foodie world are much more interested. Secondly, with a number of these restaurants charging over £75 per head – over £200 per head in one case – with swanky St James’s or Mayfair addresses, the trend could be like the ‘nouvelle Indian’ revolution of the late ‘90s, It feels like once again London may be at the forefront of a vogue to take a family of cuisines mostly celebrated for their ‘humble homespun qualities’ (to quote The Evening Standard’s Jimi Famurewa) and reposition their flavour palette in combination with local ingredients and other culinary inspirations as the basis for luxury openings globally.”

Host of concepts aimed at those with a sweet tooth to join updated Premium Database of Multi-Site Companies: A host of concepts aimed at those with a sweet tooth are among the 54 new multi-site companies being added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday, 26 November, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Jamie Scott, the 2014 MasterChef winner, who has added to his Scottish portfolio with a new doughnut shop called Wrecking Ball Doughnuts; and Berwick-based gelato parlour concept Alandas, which has opened its second site, and first city location, in Edinburgh, which features a waffle wall and flowing chocolate taps. In addition, Urban Legend, which was founded three months ago, specialises in steamed doughnuts and is set to open its third site in Clapham next month. Also added this month is luxury artisan fudge retailer and producer, Fudge Kitchen, which currently has six high street shops. Premium subscribers will also receive a 3,900-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 in total. Alongside this, Premium subscribers will also receive the fifth edition of the New Openings Database, which is produced in association with StarStock, on Friday, 3 December, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The fifth edition also includes a 14,000-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 group editor Mark Wingett. 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

Fuller’s returns to profit: Fuller’s has reported that business is rebuilding well with a profitable first half, despite only being free of restrictions for nine full weeks of the period. The company stated: “Business is rebuilding well – (with a) profitable first half, despite only being free of restrictions for nine full weeks of the period. The company said it used the period of closure and quieter trading to continue investing in its predominately freehold estate, ensuring our pubs and hotels are in excellent condition. It is building on consumer demand for a premium experience with transformational refurbishments – including opening its first new Bel & The Dragon site at The Red Lion, Wendover. Managed like-for-like sales for seven weeks to 13 November 2021 at 90% of 2019 levels. Tenanted Inns are performing ‘ahead of plan’. Rural pubs and hotels continue to perform above 2019 levels with an excellent performance from Cotswold Inns & Hotels. Central London pubs are showing steady growth – which will benefit from the further return of international tourists. A new Bel & The Dragon site planned for The George & Dragon at Westerham.” Chief executive Simon Emeny said: “While the first half of this financial year has been a story of slowly returning to some semblance of what was known as normality, I am proud of what we have achieved. We have used the time wisely, planning for the future, further improving our already robust infrastructure and focusing on our people, our properties, our supplier relationships and our systems. Like-for-like sales in our Managed Pubs and Hotels continue to grow steadily and for the seven weeks to 13 November 2021 stand at 90% of 2019 levels. Christmas bookings are in good shape and there is clearly continued appetite from our customers to get out and socialise with friends and family. During the second half of the year, we will continue to develop our business through investment in property and infrastructure. At our pubs and hotels, this will include further winterisation projects at sites including The Head of the River in Oxford and The Red Lion in Barnes, as well as transformational schemes at The White Star Hotel in Southampton among others. In a further commitment to continually premiumising our offer, we will also be rolling out our next Bel & The Dragon at The George & Dragon in Westerham. Our infrastructure projects will also be coming to fruition in the coming months, starting with the roll out of Microsoft Business Central, our new finance package, which goes live on Monday 22 November 2021 – just in time for the arrival of our new finance director, Neil Smith, who comes with a wealth of relevant industry experience and starts at the end of November. We will complete our wider digital transformation projects with upgraded pub websites and our improved CRM system providing a fantastic digital shop window and even more targeted communications based on our customers’ existing behaviours. We are pleased with the steady growth we are seeing across our pubs and hotels and we will benefit as international tourists return and office workers continue to head back to their desks and colleagues. There are a number of well-documented issues facing the industry as a whole and, while we are not immune, we are a long-standing business that is well funded, backed by a substantial, predominately freehold estate, and has the benefit of experience to help us navigate through. Our vision and strategy are clear, consistent and relevant. We have a well-balanced business in both style and geography and we have a first-class team of dedicated people right across the company. Fuller’s has, and always will have, a long-term view and a strategic plan that reflects that – and we will continue to deliver it.” Turnover was £116.3m in the 26 weeks to 25 September (2021: £45.6m) and profit before tax was £10.6m (2021: loss of £23m).

Welsh government confirms covid passes will not be extended to pubs, cafes and restaurants: First minister Mark Drakeford has confirmed there will be no additional restrictions following the latest 21-day review. The rise in case rates since the summer saw the Welsh government introduce a covid pass for nightclubs, large events, cinemas, theatres and concert halls. This means people either need to be double vaccinated or show a negative covid test. Drakeford had warned at the last review in October that with covid rates at over 700 per 100,000 that they could extend the covid pass further to include pubs, cafes and restaurants. But since then rates have fallen to around 500 per 100K and sector bosses and the Welsh Conservatives called for the extension proposal to be dropped. Now the first minister has confirmed there will be no changes to coronavirus rules over the next three-week cycle when he announces the result of the review tomorrow. The outcome of the following review of regulations will be announced on Friday 10 December – with Drakeford saying the option of extending the covid pass will remain on the table.

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