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Morning Briefing for pub, restaurant and food wervice operators

Mon 5th Dec 2022 - Energy costs set to sink UK pubs and brewers without extension of bill relief scheme
Energy costs set to sink UK pubs and brewers without extension of bill relief scheme: Pubs and breweries will face major financial losses and many will be forced to close if the energy bill relief scheme is not extended for them beyond 31 March 2023, new research has shown. In a new report by Frontier Economics, produced for the British Beer and Pub Association (BBPA), calculations showed energy bills returning to their regular rate post-March would put pubs and brewers at a loss of 20% on average. The report also lays out different routes for government intervention, ranging from extending the energy support package to reform of the business rates system. Tim Black, associate director in Frontier Economics’ retail and consumer team said: “Our analysis shows the pub and brewery sector is facing a combination of surging costs and falling demand as consumers reduce their spending in the face of severe cost of living pressures. While there are different impacts across businesses and uncertainty on the outlook, the underlying economics of the sector makes absorbing these shocks incredibly difficult – and some firms will struggle to survive.” Emma McClarkin, chief executive of the BBPA, said: “A long-term guarantee that energy costs and contracts will be fair and reasonable come the spring cannot come soon enough for our pubs and brewers. We are urging the government to seriously consider the impact rocketing energy costs will have not just on the businesses that have to pay them, but the communities they are embedded in and serve across the entirety of the UK.” Individual pubs and breweries have also reported cases of poor practice and profiteering by energy suppliers in recent months. Gemma Gardener who runs The York Hotel, a pub with rooms in Morecambe, said: “Not only have our energy bills become extortionate, but our supplier has added on extra unexpected charges outside of our standard rates, from a £2,000 installation fee to doubling our daily hire charge unexpectedly. Not knowing what we’ll be charged month on month is incredibly scary – this isn’t only our business, but our home as well, but we’re at the mercy of our energy suppliers.”

Amount restaurant owners lend to their own businesses increases 12% year-on-year, to £424m: The amount that restaurant business owners have lent to their own businesses has increased 12% in the past year, from £377m to more than £424m, according to new research. The findings by audit, tax and advisory firm Mazars show rising costs and falling restaurant sales has meant more restaurant owners are having to inject extra money into their businesses to keep them afloat. Soaring energy prices and higher food costs have combined with a fall in consumer spending to put more small restaurant businesses in the red, hurting restaurant groups in particular. Despite falling sales, many restaurant owners have had to increase staff pay because of a post-Brexit shortage of staff. Mazars said struggling restaurant owners are increasingly having to lend their own money to their businesses due to difficulties finding funding elsewhere. Its findings showed some restaurant owners have turned to re-mortgaging their own homes to raise funds to lend to their restaurants. Others have needed to cash in on their investments in order to find the funds to keep their businesses going. Insolvency Service statistics show there were 435 restaurant insolvencies in the last quarter, a 15% increase on 395 in the previous three months.

Topgolf to open flagship Glasgow venue this month, sees significant further UK growth as global expansion accelerates: Topgolf, the golf entertainment brand, will open the doors to its flagship venue in Glasgow on 16 December and sees “an opportunity to significantly increase our presence in the UK”, Propel has learned. Topgolf, which currently has more than 80 venues in seven countries worldwide, announced in February that it would be opening a fourth UK site in the Scottish city, adding to its venues in Watford, Surrey and Chigwell. It will be the company’s biggest UK venue yet, with 72 hitting bays over three floors plus numerous bars, dining areas and event spaces. “We’re beyond excited to open our fourth UK venue, and even more excited to be opening in Scotland,” Steve Lane, vice president of Topgolf International, told Propel. “These venues are exciting to build and open, and Glasgow has been custom built from the ground up as a state-of-the-art venue for players to come and play. Beyond Glasgow, we’re always actively looking for new sites, and there’s opportunity to significantly increase our presence in the UK. There are numerous factors we must take into account when exploring new locations, including at least 11 acres of land, and that land requires good visibility, but our development process helps us identify excellent sites for the best footprint. We’ve just opened a full-scale venue in Bangkok, our first in Asia, and we’re currently building our first in China, which is a huge market for the brand.” In addition to UK growth, Topgolf is focusing on helping its existing franchisees build the brand Internationally. “Collectively, with our partners, we are committed to opening a number of venues around the globe that will drive our overall mission to enable players globally to hit 50 billion golf balls between 2022 and 2025,” Lane added. “Topgolf’s technology and size are unrivalled but complex, so our priority is supporting and educating our partners to open venues, open successfully and sustain growth.”

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