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Wed 4th May 2022 - Update: JD Wetherspoon and Starbucks
JD Wetherspoon reports like-for-likes turn positive in last two weeks, Su Cacioppo to step down: JD Wetherspoon has reported like-for-like sales have turned positive in the last two weeks with the company set to “break even” this financial year. The company reported like-for-like sales decreased 4.0% in comparison with the same period in FY19 for the 13 weeks to 24 April 2022. Year-to-date like-for-like sales have decreased 6.2% against 2019 levels. The company stated: “In our interim statement, we indicated that like-for-like sales in the three weeks to 13 March 2022 had improved to minus 2.6%. In the following six weeks, to the end of the quarter, there was a further modest improvement to minus 1.6%. In the last two weeks of the period, like-for-like sales were slightly positive. The company operates 47 pubs which have music, trading as ‘Lloyds’. Like-for-like sales for these pubs, in the quarter, were 3.4%. The company also operates 57 hotels. Like-for-like room sales during the quarter were 5.0%. In the financial year to date, the company has disposed of six pubs. A further five pubs have been surrendered to landlords, following the lease expiring. In addition, three leasehold pubs have been closed, in anticipation of the lease expiring. The disposals and surrenders gave rise to a cash inflow of £6.3m. Net debt at the end of the quarter was £906m and liquidity was £173m. Debt is expected to be around £870m at the end of the financial year.” Chairman Tim Martin said: “Since covid restrictions ended, sales have improved, as previously reported. As many hospitality companies have indicated, there is considerable pressure on costs, especially in respect of labour, food and energy. Repairs are also running at a higher rate than before the pandemic. The company anticipates a continuing slow improvement in sales, in the absence of further restrictions, and anticipates a ‘break-even’ outcome for profits in the current financial year. Since 13 March, the company has returned to profitability and to a positive cash flow, and is cautiously optimistic about the prospect of a return to relative normality in FY23. The biggest threat to companies in the hospitality, tourism and related sectors is the possibility of future lockdowns and restrictions. These sorts of actions were never previously contemplated in the nation’s history – or, indeed, in the government’s own pre-pandemic plans. Many people, including those in the government and the medical establishment, believe the UK response to covid, which included a number of prolonged national lockdowns, was a success. This view is called into question by the outcome in Sweden, a more urbanised country than the UK, which did not lock down – and which appears to have had better health results. The collateral damage from lockdowns has yet to be quantified, but the economic cost, approximately half a trillion pounds, financed largely by ‘money printing’ by the Bank of England, is a direct cause of the current inflationary crisis.” Wetherspoon also announced the retirement of personnel and legal director Su Cacioppo from the board and company on 7 October 2022. James Ullman, currently retail audit director, will be appointed to the board with immediate effect as personnel and retail audit director. Wetherspoon stated: “The company is extremely grateful for Su’s exceptional efforts in the last 31 years and wishes her every success in the future.”

Host of Italian concepts to feature in next edition of The New Openings Database, 13,610-word report included: A host of Italian concepts 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 309 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday (6 May), at midday. The database 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. It is published on a monthly basis. The next edition of the database features Italian pasta concept Miscusi, which was founded by Alberto Cartasegna, and is doubling up in the capital with a site in Upper Street, Islington. Meanwhile, chef entrepreneur Robin Gill is opening his fifth restaurant in Kensington in June called Maria G’s, which will offer “Italian classics made with the best British ingredients”. In addition, Wholly Gelato, which offers Italian-style gelato, and will open its first retail site at the Gloucester Food Dock, a new £3.5m waterfront dining destination in the city, will be featured. Premium subscribers will also receive a 13,610-word report on the new additions to the database. Premium subscribers also receive access to three other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, was sent to Premium subscribers last Friday (29 April). The database contained 31 new companies, bringing the total number of businesses listed up to 2,439. The 90 sites run by those 31 new additions means the entire database of sites has reached 65,197 sites. Premium subscribers also received a 2,607-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. There is also 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 also receive the UK Food and Beverage Franchisor Database, which is an exhaustive guide to the companies offering a food and beverage franchise in the UK and will be updated every two months. The first edition features 100 companies, providing insight on the offer, locations, cost and other key details. The first edition provides 27,000 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 reports record second-quarter revenue, plans £1bn investment in pay and store innovation: Starbucks has reported record second-quarter revenue despite a significant decrease in sales in China due to the country’s pandemic lockdowns. For the quarter ending 3 April 2022, the company reported revenue of $7.6bn – in line with analyst expectations – compared with $6.7bn the previous year. Profits for the quarter were $674.5m, up from $659.4m the year before, which was also in line with analyst expectations. Global like-for-like sales were up 7%. International like-for-like sales fell 8%, largely due to coronavirus restrictions in China, which is Starbucks’ largest market outside the US. Like-for-like sales in China during the quarter fell 23%. However, Starbucks reported a 12% increase in North America like-for-like sales, with revenue reaching $5.5bn in the quarter compared with $4.6bn the previous year. Starbucks also revealed it plans to spend $1bn on wage increases, improved training and store innovation during this financial year. Starbucks interim chief executive Howard Schultz said the company had a single-minded focus on enhancing its core business in the United States through its partner, customer and store experiences. “Given record demand and changes in customer behaviour we are accelerating our store growth plans, primarily adding high-returning drive-thrus, and accelerating renovation programmes so we can better meet demand and serve our customers where they are,” Schultz said. Starbucks said it will hike wages for tenured workers and double the amount of training for new employees as the company seeks to beat back the union push from its baristas. Employees who have been with the company between two to five years will receive either a 5% increase or get paid 5% above the market’s start rate, earning whichever rate is higher. Workers with more than five years of tenure will get a 7% increase or get paid 10% above the market’s start rate, earning whichever rate is higher. Starbucks will also up pay for store managers, assistant store managers and shift managers hired on or before Monday (2 May). These investments are one-time investments in base pay in addition to planned fiscal year 2023 raises this autumn, the company said. However, the company will not offer the enhanced benefits to workers at the roughly 50 company-owned cafes that have voted to unionise. Such changes at unionised stores “would have to come through bargaining”, Starbucks said. In total, More investments are also planned. The company said it will introduce credit and debit card tipping by late 2022, and it is planning equipment and technology enhancements, like upgrading in-store iPads and accelerating the rollout of new ovens and espresso machines. “The transformation will accelerate already record demand in our stores,” Schultz said. “But the investments will enable us to handle the increased demand – and deliver increased profitability – while also delivering an elevated experience to our customers and reducing strain on our partners.”

WHO – ‘Deliveroo culture’ to make Britain the fattest nation in Europe: Britain will become the fattest nation in Europe within a decade thanks to a “Deliveroo” culture fuelled by the pandemic, World Health Organisation (WHO) has warned. The Telegraph reported a damning 220-page report warns of “alarming” trends that mean that almost four in ten Britons will soon be obese. Researchers said modern lifestyles were cutting lives short, with excess weight now responsible for 1.2 million deaths in Europe every year. They said the growth of meal delivery apps during the pandemic was fuelling Britain’s record obesity rates, which will leave it topping the obesity league tables by 2033. The use of fast-food delivery apps has spiralled since the pandemic, with a doubling in UK orders from Deliveroo in the six months since the first lockdown. Health chiefs said the trends could see Britain top the obesity table even sooner, with takeaways typically containing twice the calories as supermarket equivalents. The global study shows the UK is already one of the fattest nations, with Turkey at 32.1% and Malta at 28.9%. Detailed forecasts show spiralling obesity levels for the UK. While 27.8% of adults are currently classed as obese, this figure is forecast to reach 37% by 2033. The jump of one third will leave it topping the chart for Europe, followed by Ireland, with 36%. Only the US fares worst, in the analysis of 19 countries, with 44% of adults expected to be obese within a decade. Dr Kremlin Wickramasinghe, head of the WHO European office for the prevention and control of noncommunicable diseases, said Britain had seen one of the sharpest rises in online food deliveries. He said: “We saw a rapid expansion in the use and popularity of food delivery apps during the covid-19 pandemic when people were told to stay at home but still wanted restaurant meals. They did very well and have quickly become part of our culture and lifestyle. However, they have the potential to increase obesity as they drive people to order more than they need, with deals such as free delivery if you spend above a certain amount. It is also difficult to manage the size of your portions when ordering through an app. We should now be seeking to make these apps healthier.”

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