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Morning Briefing for pub, restaurant and food wervice operators

Fri 25th Feb 2022 - YO! owner picks float line-up as owners gauge appetite amid jittery markets
YO! owner picks float line-up as owners gauge appetite: The sushi chain YO!’s parent company has picked further advisers for a potential £750m listing even as market jitters exacerbated by Russia’s invasion of Ukraine threaten a slew of company flotations. Sky News reports that Snowfox Group is working with Barclays, Jefferies and Peel Hunt on a prospective initial public offering (IPO). Mayfair Equity Partners, the company’s controlling shareholder, is said to have identified March or April as possible dates to announce Snowfox’s intention to float. Deliberations about a listing are taking place alongside ongoing discussions with third parties which have expressed an interest in buying Snowfox outright. However, market sources believe the prospects for a series of IPOs, including those of Snowfox and Burger King UK, face delays because of stock market volatility. One investment banker not involved in either restaurant chain’s IPO planning said 2022 was shaping up to be a “barren” year for substantial London listings. Snowfox has become a major international player in the Japanese food wholesale sector, selling more than 60 million trays of sushi annually and supplying retailers such as Tesco and Asda in the UK. It now operates only 65 YO!-branded restaurants, having cut hundreds of jobs and closed a significant number of sites in 2020. Snowfox’s dual-track process reflects a turnaround in the performance of one of the many UK-based casual dining businesses forced to undertake financial restructurings as a result of the pandemic. The company has been able to recover relatively quickly because of the growing dominance of its American operations, which trade under the Snowfox name at hundreds of grocery store counters. A Mayfair spokesman declined to comment.

Updated Premium Database of Multi-Site Companies released today at midday, 49 business being added: A total of 49 new multi-site companies, operating 227 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released today, (Friday, 25 February), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes a number of expanding hotel companies, regional pub and restaurant operators and several brands set for UK expansion. Premium subscribers will also receive a 3,750-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. It features more than 2,000 companies. Premium subscribers will also receive the seventh edition of the New Openings Database, which is produced in association with StarStock, on Friday, 4 March, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The seventh edition also includes a 15,500-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. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. 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 group editor Mark Wingett. In this week’s Premium Opinion, which will be sent to subscribers at 5pm today, Arturo Perez, senior vice-president, international marketing at global burger brand Carl’s Jr, discusses the three key factors shaping future success in the quick service restaurant industry.

Inflation fears hit consumer confidence: Rapid price rises have left Britons increasingly pessimistic about their finances, a report has found. The Times reports consumer confidence has fallen sharply, according to the latest monthly index compiled by Gfk. The market intelligence company’s survey of 2,000 over-16s, which has been running since 1974, reported that its measure of confidence had dropped by seven points to -26 on the index, its lowest level since January last year, when it hit -28 as England entered its third national lockdown. There was lower confidence in personal finances, the fate of the economy and the likelihood that consumers will buy big-ticket items, but the most pronounced falls were in the outlook for consumers’ individual finances, which fell by 12 index points to -14, and in the wider economic situation, which fell by 11 points to -43. The figures for each stood at +4 and -30, respectively, in February last year. A worldwide squeeze on energy supplies over the past year has pushed gas prices to unprecedented heights. Britain is particularly affected, as 85% of homes have gas central heating. The rise forced a 12% increase in the price cap on energy last October to allow companies to pass on the cost to consumers. A second, larger, rise of 54%, due in April, is expected to be the driving force behind inflation rising to more than 7%, the Bank of England forecasts. Joe Staton, client strategy director at GfK, said that “fears about rising prices, from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence. At -26, this is the lowest headline score since January 2021, one of the worst points in the covid crisis.” He added that the biggest drops in confidence had been recorded in the indicators that looked a year ahead, despite the easing of covid restrictions. “While all measures have fallen this month, the two forward-looking indicators tapping sentiment over the next 12 months, on personal finances and the wider economic situation, are showing the biggest falls, down 12 and 11 points, respectively,” he said.

Shoppers weather the storms to keep spending: Extreme winter storms may have deterred some shoppers from venturing out last week, but wind, rain and snow failed to dampen the enthusiasm for buying among those that did hit the high street as consumer spending edged up. The Times reports figures from the Office for National Statistics show that the value of transactions rose to 98% of its level in the week to February 17, 2020, compared with 96% the week before. Retail customer numbers were down by 4% last week from the previous seven days at 74% of the 2019 level, while the number of restaurant reservations in the seven days to Monday was down by ten percentage points at 119% of its February 2020 level, according to data from Springboard. The lower number of restaurant bookings was partly because Valentine’s Day fell in a different week in 2020, the statistics office said. The latest weekly data and analysis from the organisation is part of a series that looks at the economy, business and jobs since Brexit and during the pandemic. Retailers and the leisure sector, in particular, have struggled to cope with the weather, supply chain issues, labour shortages and rapidly rising energy costs, with the latter featuring prominently in the latest study as about one in six businesses reported that their production or suppliers had been affected by the increase in wholesale gas prices. The accommodation and food services industry reported the highest percentage of businesses affected by the rise in wholesale gas prices, at 43%.

London-based cheese and wine shop Provisions to double up with Hackney launch next month: London-based cheese and wine shop Provisions is to double up. Founder Hugo Meyer Esquerré is adding to its existing site in Islington with an opening in Hackney next month. The new 650 square foot site will “retain many elements of our original concept while also showcasing new products that we have been sourcing in recent years”. The shop in Hackney Road, which opens on Friday, 25 March, will, as with the original, focus on organic wine and farmhouse cheese. But there will be a different selection here to Islington. For wine there will be a focus on the regions of the Languedoc, Roussillon and Southern Rhone and the cheese, of which there will be more than 100 to choose from, will be from different producers. A monthly themed specialty cheese subscription service will be introduced. In addition there will be a weekly changing selection of sandwiches made using the ingredients in the shop alongside spices, coffee, and more deli goods. The store will play host to a programme of chef dinners, wine tastings and events, which will take place downstairs, which will also be used for Provisions’ growing wholesale preparation. Provisions opened its debut site in Holloway Road in 2015.

Arcade bar concept Four Quarters opens in Bristol for regional debut: London-based arcade bar concept Four Quarters has made its regional debut with an opening in Bristol. The Edition Capital-backed business, which operates three sites in London, has opened in Bristol’s Park Street, on the former The Bristol Ram pub site. The newest Four Quarters hosts more than 20 arcade machines and retro console booths over two floors. The site’s beer and cocktail menu features collaborations with local brewery Lost and Grounded. Four Quarters, which was established in 2014, is understood to be in talks to open a site in Newcastle. Last summer, it opened a third site at the Elephant Park development in south London. Its first bar opened in Peckham, with a second following in Hackney Wick.

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