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Wed 16th Nov 2022 - Update: Deliveroo pulls out of Australian market
Deliveroo pulls out of Australian market: Deliveroo has announced that it is ending its operations in Australia. It said the market is highly competitive in the country, with four global players, and that “Deliveroo does not hold a broad base of strong local positions”. In the first half of 2022, the Australian business represented around 3% of Deliveroo’s total gross transaction value (GTV) and negatively impacted the company’s adjusted Ebitda margin approximately 30 basis points. The company said: “Working with the local Australian leadership, the company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo’s risk/reward thresholds. Given this position, Deliveroo has decided to end its operations in Australia. The company’s subsidiary in Australia, Deliveroo Australia Pty, has therefore been placed into voluntary administration by its director and will permanently cease trading imminently. As reported in the third quarter 2022 trading update on 21 October, throughout 2022, Deliveroo has been adapting financially to the operating environment and driving forward on the path to profitability. Following today’s announcement, there is no change to Deliveroo’s previously communicated financial guidance on GTV growth and adjusted Ebitda margin for 2022 and beyond.” Eric French, chief operating officer, added: “This was a difficult decision and not one we have taken lightly. We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved with the Australian operations over the past seven years. Our focus is now on making sure our employees, riders and partners are supported throughout this process.”

Fifth UK Food and Beverage Franchisor Database to feature 170 companies, released on Tuesday: The fifth UK Food and Beverage Franchisor Database, which will be sent to Premium subscribers on Tuesday (22 November) at midday, will feature 170 companies, with 16 new additions. It will provide insight on the offer, locations, cost and other key details of companies offering a food and beverage franchise in the UK, with more than 75,000 words of content. Several dessert concepts are among the new franchisors featured. Among them is Love Churros, an “urban dessert experience” founded in London in 2007 by former professional footballer Jake Nicholson, which has UK locations in Brixton, Shoreditch, Croydon and Lakeside. Also featured is premium dessert concept Haute Dolci, launched by Heavenly Desserts founder Nizam Mohamed in 2017, and which has grown to 16 UK sites. Stuffed Gelato, founded in 2021 as a dessert and coffee brand specialising in stuffed doughnuts, and with a debut site in Shoreditch, is also featured. So too is The G Factory, an independent dessert operator created in 2008 by Giuseppe Trivigno and pastry chef Chris Zammit, which now has two sites. Premium subscribers also receive access to The New Openings Database; the Propel Multi-Site Database, produced in association with Virgate; and the Turnover & Profits Blue Book, produced in association with Mapal Group. 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 Friday Wrap interviews and 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. They 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.

Higher costs trigger rise in insolvencies: Company insolvencies rose sharply last month as businesses were faced with higher inflation and an uptick in winding-up petitions from HM Revenue & Customs. The Times reports the number of corporate insolvencies increased by 38% year-on-year from 1,410 to 1,948, according to figures from the Insolvency Service. The numbers were driven by 1,594 so-called creditors’ voluntary liquidations. Compulsory liquidations rose by 357% annually to 242. The service said that this was partly due to HMRC issuing more demands for repayment from companies. The tax authority was barred from issuing winding-up petitions during the pandemic as businesses were forced to shut down by the government. However, these restrictions were removed on 1 April this year, leading to an increase in activity against companies. David Hudson, restructuring partner at FRP Advisory, said: “Inflation is devastating margins and throwing into doubt historically sound business models, which is eating away at confidence, undermining recovery plans and, crucially, testing the resolve of lenders.” Nicky Fisher, vice-president of R3, the restructuring trade body, said: “The jury is still out on whether the Christmas trading period, which will include an unseasonal football World Cup, will lead to the traditional boom many businesses are hoping for, or whether disappointing sales over the festive period will lead to businesses turning to an insolvency process to resolve their financial issues.”

UK inflation jumps again to 11.1% on back of energy price rises: The UK’s annual inflation rate has hit a fresh 40-year-high of 11.1% after last month’s jump in gas and electricity bills. The Office for National Statistics said dearer energy was mainly to blame as it announced that the government’s preferred measure of the cost of living increased again last month from 10.1% in September. Energy bills rose in October despite the government’s decision to cap the annual amount paid by the average household at £2,500. Inflation as measured by the consumer prices index stood at 4.2% in October 2021 but has moved steadily higher over the past 12 months. The rise was anticipated by the Bank of England in its latest quarterly monetary policy report. It said inflation would remain high and only fall back towards 10% in the first three months of 2023.

Chancellor planning measures to help long-term sick back into work after they hit record numbers: Jeremy Hunt is preparing to announce measures to help the long-term sick back into jobs, as figures showed a record 2.5 million are now unable to work due to such illnesses. The chancellor is expected to use his autumn statement to warn that labour shortages are fuelling spiralling inflation by reducing the workforce and pushing up wages. Data from the Office for National Statistics (ONS) show that the number of people classed as long-term sick rose by 133,000 in the three months to September, bringing the total to 2,519,000, the first time the number has tipped over 2.5m since records began in 1993. A Treasury source told The Telegraph: “There are pressures pushing up inflation beyond energy, and one of the main ones is the tight labour market. We have a record number of job vacancies, and hundreds of thousands have left the labour market due to long-term sickness. We need to look at the labour market as that is pushing up prices across the board, because employers are finding it hard to get people.” Another source said the government would be seeking extra information on why many over-50s and women are unwilling to return to the labour market after having left. The number of people available to work has been shrinking since the pandemic, with the overall share of economically inactive people who are neither in work nor looking for a job growing by 0.2 points to 21.6%. However, the number of people who are economically inactive because of retirement has been falling for nine months, although at 1,157,000, it remains slightly higher than before covid. The ONS said: “During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high.” The data also showed vacancies fell for the fourth straight quarter, and there was a small uptick in unemployment, which is at 3.7%.

Warnings of Champagne shortage as demand soars: French champagne producers are warning of a shortage of the sparkling wine in the run up to Christmas. Producers insist demand for the drink remains strong, despite the cost-of-living crisis. The claims come from Moet Hennessy, whose brands include Veuve Clicquot, Dom Perignon and Moet & Chandon. Chief executive Philippe Schaus told Bloomberg: “We are running out of stock on our best champagnes. As people are coming out of covid, there’s been pent-up demand for luxury, enjoyment and travelling.” Poor harvests in 2020 and 2021 are likely to have also reduced stocks, reports the Daily Mail. The claims seem to suggest that a slump in UK sales has been reversed. A survey in April showed Veuve Clicquot had lost 16.7% of its value in a year, while Moet & Chandon was down 10.7% and Bollinger had fallen 16.2%. It comes as the price of champagne has risen, with a bottle of Taittinger Brut Reserve NV up from £36 to £39 in a year. Schaus said champagne sales were “very strong” in Europe, and “above all, in the US, where we had a very strong quarter”.

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