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Morning Briefing for pub, restaurant and food wervice operators

Wed 19th Oct 2022 - Update: Just Eat returns to profitability, beer delivery drivers to strike, The Bok Shop
Just Eat returns to profitability but UK GTV drops 5% in Q3: Just Eat Takeaway has reported that it has returned to profitability “earlier than expected”, but saw orders and Gross Transaction Value (GTV) fall 15% and 5% in the UK, respectively, during its third quarter. Total orders for the business fell 11% in the quarter to 235.3 million, while total GTV increased 2% to £6.924m, helped by 6% increases in North America and Northern Europe compared to the same period last year. Year to date orders in UK and Ireland were down 10% and GTV 1% compared to 2021. The business said: “The company’s focus on profitability delivered material improvements to Revenue per Order, Delivery costs per Order and Overheads & Opex. As a result, Just Eat was Adjusted Ebitda positive in Q3 2022, materially ahead of prior guidance at the beginning of the year and is on track towards its long-term target margins. Adjusted Ebitda improved in all segments in Q3 2022, both year-on-year as well as on a sequential basis. Within Northern Europe, Germany remained the most important growth driver with year-to-date positive Order growth. While the market backdrop in the UK was less favourable against a strong comparative period, the UK and Ireland segment achieved further material improvements in profitability. In North America, Grubhub’s partnership with Amazon showed encouraging early results. Finally, order growth in the Southern Europe and ANZ segment was adversely impacted by market contraction due to lapping a period with significant covid-19 restrictions in Australia in 2021. GTV was up 2% in Q3 2022 compared with the same period in 2021 driven by a higher average transaction value and positive FX movements. Just Eat processed 235 million orders in Q3 2022, representing a 11% decrease compared with Q3 2021, predominantly caused by the end of covid-19 restrictions and, to a lesser extent, by reducing the number of low contribution orders.” The company said that an Extraordinary General Meeting relating to the sale of its equity stake of approximately 33% in the iFood joint venture to an affiliate of Prosus N.V will be held in Amsterdam on 18 November. Jitse Groen, chief executive of Just Eat “After two years of significant investment following the merger and the pandemic, I am pleased that Just Eat has returned to profitability earlier than anticipated. Driven by a wide range of initiatives, we continue to improve our operational efficiency whilst simultaneously enhancing the user experience and consumer proposition. Although the consumer backdrop will likely be challenging due to the macro-economic environment, Just Eat owns many leadership positions of significant scale, is well-capitalised through the sale of the iFood stake and is therefore well-positioned to capture profitable future growth.”

Variety of bar operators set to join updated Premium Database of Multi-Site Companies: A variety of bar operators are among the 30 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, 28 October, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Deckhouse, a new all-day dining cafe and bar concept chaired and backed by Mark McQuater, which is set to launch in Taunton, and has a target of having 18 sites within five years. Also added this month is London cocktail bar concept Swift, led by Bobby Hiddleston and Mia Johansson, along with husband-and-wife team Edmund Weil and Rosie Stimpson, which operates two sites, in Soho and Shoreditch, and has a third site opening in Borough. In addition, Manchester cafe and bar concept Federal Cafe & Bar, which is owned by Claudio Ribeiro and operates sites in the Northern Quarter and Deansgate, will be featured. Premium subscribers will also receive a 2,100-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 now features 2,677 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 4 November, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes a 7,000-word report on the new additions to the database. Premium subscribers also receive access to the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group, and the UK Food and Beverage Franchisor Database. 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.

Beer delivery drivers to strike: Beer delivery drivers across the UK are set to strike for five days, with the Unite union warning of disruption to pub supplies. Around 1,000 GXO drivers will go on strike from 31 October until 4 November in a dispute over pay. GXO delivers around 40% of all UK beer, supplying pubs and other venues with the likes of Heineken, Stonegate, Admiral Taverns and Shepherd Neame. Pub supplies could be impacted ahead of the World Cup, which starts on 20 November. The drivers will also begin a continuous overtime ban next week on 24 October. Unite said workers had rejected a 5% pay offer. “Any disruption to the UK’s beer supplies is entirely the result of GXO’s greed,” Unite national officer for food, drink and agriculture, Joe Clarke, said. “It must return to the negotiating table with an offer our members can accept.” Unite’s general secretary Sharon Graham told The Times: “Once again, a company that is making hundreds of millions in profits is asking workers to take a [real-terms] pay cut. And GXO goes even further. They want to cut sick pay too. This is a shocking way to treat your workforce. GXO can easily afford to pay fairly and Unite is determined to see that they do. Our members have the union’s absolute support in taking strike action for a fair pay rise.” A spokesperson for GXO said the US-based logistics company’s offer was “significantly above” 5% and did not impact sick pay. “We are extremely disappointed that the union has rejected our proposal, which is highly competitive and follows an above-inflation annual pay raise last year.” GXO said it had plans in place to minimise any impact on customers in the event of a strike.

Spiralling costs force The Bok Shop to close two sites: The Bok Shop, the Brighton-based premium fried chicken concept, has announced it has closed two of its sites, as it had become “increasingly difficult to keep these large units running after such insane price increases such as energy”. Founded in 2017 by Jamie O’Mara and Howard Kaye, the business has closed its sites in Southampton and Eastbourne, but will continue to operates sites in Brighton and Hastings. The business said: “Normally when we put out messages like this, it’s about something exciting. Sadly, this isn’t one of those. We have made the incredibly hard decision to permanently close our Southampton and Eastbourne restaurants. It has become increasingly difficult to keep these large units running after such insane price increases such as energy. As an independent business started by two mates, we only ever want to be transparent with you. Over the course of the last few years, we have really honed in on what The Bok Shop is, what it means to us and most importantly what it means to our customers. We started this journey wanting to combine opening some bad-ass chicken shops with our love for sneakers, gaming and music. What we have built is just that but more importantly a team of incredible people that have showed nothing but resilience and support. This is truly the most humbling part of our journey so far. Although it feels like a couple of steps back, it’s all in the name of progress and we’re grateful to have two other awesome shops in Brighton and Hastings that will continue to serve up all of the fried goodness you could ever want. We’d like to take this opportunity to thank our amazing teams across all shops. You really do make us proud. Especially to our Eastbourne and Southampton teams. And thank you to our customers for your continued love and support, not just us but to all independent businesses. We’re really feeling it right now so your support means the world to us. Always remember, everything will be ok.”

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