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Tue 1st Nov 2022 - Update: Fulham Shore trading in line with management expectations, debuts retail range
Fulham Shore trading in line with management expectations, debuts retail range: Fulham Shore, the Franco Manca and The Real Greek operator, has reported that trading in the six months to 25 September 2022 was in line with expectations, but warned that trading conditions are more “unstable and unpredictable than at any time in recent memory”. The update comes as the business has launched its Franco Manca brand into retail stores nationwide. The group has launched a debut range of five premium Franco Manca Chef’s Selection cook-at-home pizzas. The range, which has been developed through a licensing partnership with the fine Italian food business Rondanini, is available to purchase in over 500 supermarkets, understood to be with Tesco, across the UK from this week. The business said it has the opportunity to expand into more stores (additional to the current 500) over the coming year, and to partner with further grocery retailers from late 2023. The range has been created by Franco Manca executive chef Alfonso Marseglia. Fulham Shore’s said its expansion into retail operations complements its portfolio of restaurants, will “drive brand awareness and enable the group to introduce the Franco Manca brand to consumers throughout UK, especially where Franco Manca does not yet have a restaurant presence”. Since its update published on 31 August 2022, the group has opened four Franco Manca sites in Lincoln, Hove, Chichester and Cardiff, and two The Real Greek restaurants in Gloucester Quays and Solihull. It said that these new locations have all been “busy from the outset”. These openings take the total number of restaurants operated by the group to 95. The first The Real Greek in Scotland, located in the new shopping scheme St James Quarter, Edinburgh, is also being fitted out ready for a December opening. During the six months to the end of September, in spite of challenging political and macroeconomic circumstances as well as recent sporadic train and tube disruptions, the company said it traded in line with management expectations. This performance was “driven by the popularity of both Franco Manca and The Real Greek’s excellent value-for-money propositions”. As a result, group revenues for the period grew approximately 35% when compared with the same period in 2019 prior to the onset of covid-19, and some 25% ahead when compared with the same period to September 2021. The company’s net cash position before lease liabilities recognised under IFRS 16 as at 26 September 2022 was over £2.6m. The group said it has undrawn bank facilities of £16.9m, providing substantial financial headroom of over £19.5m. The company said: “Macroeconomic challenges including inflation, rising interest rates and political uncertainty continue to affect consumer confidence and, combined with input cost inflation, are presenting trading conditions that are more unstable and unpredictable than at any time in recent memory. These rising costs and what, if any, relevant government support leads to a lack of transparency for short term trading.” As previously stated, Fulham Shore plans to open around 18 restaurants during the 12 months to 26 March 2023. The group said it will review on an ongoing basis its opening target for the 2024 financial year based on the ever-evolving economic and political outlook, and will share subsequent updates as appropriate. David Page, Fulham Shore executive chairman, said: “After many months of careful development we are thrilled to launch our debut range of Franco Manca cook-at-home sourdough pizzas which are now available in over 500 supermarkets. This is a very exciting new strategic development for Franco Manca and The Fulham Shore, which complements the appeal and success of our consistently busy and growing portfolio of restaurants, and we are looking forward to seeing it develop. We’re delighted that underpinned by the relevance of our Franco Manca and The Real Greek brands and their value-for-money propositions, both our established and new restaurants performed well during the first half of the group’s financial year. This has led the group to trade in line with management expectations and represents revenue growth of over 35% compared with the same period in 2019 and some 25% ahead when compared with the same period to September 2021.”

Host of American-inspired restaurant concepts to feature in next edition of The New Openings Database, 10,000-word report included: A host of American-inspired restaurant concepts will feature in the next edition of The New Openings Database. The database will show the details of 207 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday (4 November) at midday, including 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, and there will also be a website link to the businesses. The database is published monthly, and the next edition features North American comfort food outlet Brewski, which is planning to open its first site in Yorkshire. Also added is American-inspired fast food restaurant franchise concept Chickaros, founded in 2019 in Aldridge by childhood friends Shaz and Shudz Miah, which recently opened a site in Glasgow for its Scottish debut. Meanwhile, Scotland-based, American-style restaurant Monterey Jack’s, which is set to make it franchise debut when it opens its tenth site, in Braehead, this autumn, will be featured. Premium subscribers will also receive a 10,000-word report on the new additions to the database. Premium subscribers also receive access to three other databases – the Propel Multi-Site Database, produced in association with Virgate; the Propel Turnover & Profits Blue Book, 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.

Thorley – the hospitality sector just can’t live with these sorts of increases: Phil Thorley of the 18-strong Thorley Taverns has said the hospitality sector “just can’t live” with the sorts of cost increases it is currently facing. Thorley told The Times the most urgent problem was utilities bills: “We came out of contract just recently and we’ve just signed up to a deal which is 400% up on our previous deal. We’re going from £300,000 to £1.2m. That 400% increase is after government assistance, as well.” He said the hospitality sector “just can’t live with these sorts of increases”. He said: “We can’t just turn the heating down, we can’t turn the lights off. Our places have to be warm and inviting. Beers need to be cold. Food needs to be hot.” The other issues were business rates and VAT. Rates needed root-and-branch reform to remove the advantage enjoyed by the likes of Amazon and other online retailers – “bricks against clicks” – while on VAT there needed to be a levelling of the playing field. “Where I am in Kent, I’m closer to Calais than Canterbury and yet across the water they pay 10% on their hotels and hospitality and I pay 20%. We’re getting kicked every which way but loose.” To keep the cash flowing, Thorley said the company had sold the freehold of one of its pubs for £1.6m, which, after paying off the mortgage, left money to “make sure we can get through”. “We’re just a little pub company with 18 pubs in Kent and we don’t make that much money. We’ll try to make it work somehow. Our company been going 50 years. We’re a family company with 400 employees. We didn’t make one person redundant during covid.” Can it survive? “Going to the pub is an affordable treat. People won’t stop going to their local. We will make sure we do everything in our power to make sure we’re going for another 50 years.”

Unemployment set to rise next year: A rise in unemployment above pre-pandemic levels next year will intensify the squeeze on household finances, which is already at its worst since the Second World War, a think tank says. The Times reports the jobless rate has fallen from 4% at the beginning of 2020 to 3.5% after hundreds of thousands of people left the workforce during the pandemic. However, it is expected to rise above pre-pandemic levels as the country enters a recession caused by the cost of living crisis, forecasts show. James Smith, of the Resolution Foundation, said: “Such an outlook means that as well as the new prime minister facing tough decisions, so too will many families as the cost of living [crisis] evolves into next year.” Rishi Sunak is likely to raise taxes this month as the scale of the fiscal deficit cannot be plugged with spending cuts alone, the foundation says in a report. The government will have to raise at least £40bn to get debt falling in three years. The think tank said at least £30bn of savings would be needed to get debt falling by the 2026-27 financial year, but more savings would need to be made to provide “headroom” against future shocks. The smallest level of headroom a chancellor has had against a new set of fiscal rules was equivalent to £12bn, bringing the total scale of the fiscal tightening, whereby the government spends less and taxes more, to at least £40bn. Economists fear the UK will enter a recession this winter as the squeeze on household budgets, weakening global consumption and the rising cost of borrowing eats into demand for goods and services. The foundation said the Office for Budget Responsibility, will forecast a recession next year, knocking up to 4% off GDP. The weaker outlook will raise borrowing by about £20bn a year by 2026-27. Smith added: “The government has a little over two weeks to finalise its plans to repair its economic credibility and the sustainability of the public finances. History tells us that this will involve cuts to public investment, which are easy to announce but reduce growth in the longer term,” Smith said, adding that further austerity for public services is likely. “This reality means that the autumn statement is likely to involve tax rises, not just spending cuts.”

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