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Tue 5th Apr 2022 - Update: Pret Index, Starbucks, heightened risk of insolvency
Pret – Demand for airport coffee soars amid travel rebound: For the first time since the outbreak of covid-19, sales of Pret A Manger espressos and croissants at London’s airports are higher than they were before the crisis. Bloomberg’s Pret Index showed pre-boarding transactions at Heathrow, Gatwick, Luton and City terminals were entirely back to normal last week in a sign that the airline industry is returning to health. That’s in spite of some destinations, such as Hong Kong, still enacting stringent restrictions, Russia’s war in Ukraine forcing changes to routes and an IT crisis at British Airways causing the cancellation of many flights last week. The Index found that the strong demand Pret’s seeing at its airport cafes corresponds with a slight pullback in London’s financial districts, West End shopping area and its suburbs as residents start traveling ahead of the Easter holidays. Last week’s poor weather in the capital – a cocktail of hail, snow and heavy rainfall – is also likely to have seen more people opt to work from home. A power cut in the Canary Wharf financial district last week compounded the problem, with Pret’s stores in the area serving fewer Citigroup bankers than they usually would after the US giant told the 9,000 employees at its office there to work from home. Despite the slight decline, sales in London’s entertainment and shopping district are still higher than they were before the pandemic. Pret sales in London’s suburbs fell to the lowest level since February. Still, they’re about a quarter higher than they were before the pandemic. Sales in London train stations are almost entirely back to normal.

Cluster of London pub openings to feature in next edition of The New Openings Database, 19,100-word report included: A cluster of London pub openings will feature in the next edition of The New Openings Database, which is produced in association with StarStock. The database will show the details of 386 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday (8 April) at midday. The database, which is published monthly, shows the details of which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location. There will also be a website link to the businesses so you can find out more about them. The next edition features The Greyhound, which opened in south London in March, and is one of two planned openings this year for south London-based pub group The Queen’s House, which will also open The Royal Oak, in Barking. Also included is The Talbot in Brockley, Lewisham, which is being reopened by south east-based the Little & Large Pub Company for its third site this spring. In addition, chef Rob Tecwyn and Adam Symonds who are reuniting to open a new neighbourhood pub, The Baring, in London’s Islington, in May, will be featured. Premium subscribers will also receive a 19,100-word report on the new additions to the database. Premium subscribers also receive access to two other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, was sent to Premium subscribers last Friday (1 April). The database contained 69 new companies, bringing the total number of businesses listed up to 2,407. The 496 sites run by those 69 new additions means the entire database of sites has reached 64,884 sites. Premium subscribers also received a 5,000-word report on the new businesses added. The go-to database 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. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. Premium subscribers also receive the Turnover & Profits Blue Book, which is produced in association with Mapal Group. The Blue Book, which is also updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers are also to be given exclusive access to a new database this month. The UK Food and Beverage Franchisor Database will be an exhaustive guide to the companies offering a food and beverage franchise in the UK and be updated every two months. The first edition will feature more than 100 companies, providing insight on the offer, locations, cost and other key details. The first edition provides almost 25,000 words of content. 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 jo.charity@propelinfo.com 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. 

Starbucks suspends buybacks as Howard Schultz returns as CEO: Howard Schultz is suspending Starbucks’ share buyback programme, pledging on the first day of his third term as the US coffee chain’s chief executive to redirect the capital to its stores and staff. The FT reports that the decision comes as Starbucks faces a growing unionisation movement in its home market, rising wage and commodity costs, and potential threats to its international growth, from its suspension of operations in Russia to new covid-related lockdowns in China. “This decision will allow us to invest more into our people and our stores – the only way to create long-term value for all stakeholders,” Schultz said in a letter to employees, three weeks after the company announced that Kevin Johnson was retiring after five years as chief executive and Schultz was returning on an interim basis. Starbucks put stock repurchases on hold in 2020 to focus on reducing debt taken on during the pandemic, but Johnson announced plans last October to spend $20bn on buybacks and dividends over the next three years. Shareholders, customers, communities and the planet would all benefit if the company was designed “to share success with each of us and for the collective success of all our stakeholders”, Schultz said in the letter. He would also be travelling to meet people across the company and launching “design sessions” with employees “to co-create a future of mutual thriving in a multi-stakeholder era”, he added, without giving details of what these would entail. Schultz’s comments echo his attempts to revive Starbucks on his first return as chief executive in 2008, after he had issued an internal memo warning of what he called “the commoditisation of the Starbucks experience”.

Half a million jobs at risk in struggling small firms: More than half a million people are working at small companies which are at heightened risk of insolvency as employers struggle to cope with a cocktail of challenges. The Times reports about 6,500 small and medium-sized businesses are at higher than average risk of going bust, according to research, as they battle rising prices, higher taxes, the fallout from Brexit and covid-related staff shortages. Start-ups that are up to three years old are at particular risk, Quantuma found. The advisory firm predicted that by 2024, corporate insolvencies will reach the highest in a decade, with 19,000 businesses a year likely to fail. It said that this year corporate insolvencies will return to 2019 levels after pandemic-related support and protection was unwound. “The twin forces of Brexit and covid-19 exacerbated by the cost-of-living crisis are conspiring to create challenging trading conditions for most, but not all, SMEs,” the firm said. It predicted there would be a “sharp acceleration” in insolvencies in the second half of this year as “inflationary pressures, the cost-of-living crisis, and fallout from the invasion of] Ukraine weigh heavily on the micro-end of the market and particularly owner-managed businesses”. Recent official figures show that close to one in seven businesses are not fully trading because of staff shortages linked to covid, hitting their revenues as energy and other costs rise. Research by the Office for National Statistics has indicated that 5% of businesses, or more than 250,000 companies, fear imminent failure. The Institute of Directors said last week that more than half of business leaders say the cost of energy was exerting a negative impact on their organisation, three times as many as a year ago.

Job of the week: Award-winning hospitality, leisure and events group Boxpark has two job opportunities within its marketing department. The business is seeking an experienced head of marketing with an events and music background who can deliver strategic and impactful marketing campaigns from conception to completion. Responsibilities will include planning and delivering monthly and seasonal campaigns, managing and developing Boxpark’s Black Card digital loyalty programme, developing a CRM strategy and overseeing all digital, social, and PR campaigns. In addition, Boxpark is looking for a digital marketing manager with a hospitality, entertainment or sports background who can manage all digital channels and data analytics, drive email marketing campaigns, and develop SEO and pay-per-click strategies. This is a specialist role, and the ideal candidate will have experience using marketing automation tools, CRM software and CMS platforms. Boxpark is a fast-growing, ambitious company and candidates must be able to work flexibly in a dynamic, start-up style environment. For further information, and to apply, click here.

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