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Tue 3rd Jan 2023 - Update: Energy support, Lucky Saint investment, Honours List, new Nightcap MD, High Street closures, Cineworld
Rishi Sunak to halve support that helps businesses pay fuel bills: Rishi Sunak is poised to halve financial support on energy bills for businesses, amid concerns about the cost. When she was prime minister Liz Truss announced a six-month package of support for businesses in October that capped wholesale energy prices on electricity and gas. That is expected to cost £18 billion by the time it ends on 20 March. The Times reports that this month Jeremy Hunt, the chancellor, will announce a 12-month extension to the scheme but with the level of support more than halved, amid concerns about taxpayers’ exposure to fluctuating energy prices. Two approaches are being considered. Hunt said in his autumn statement that most businesses would not receive extra support, arguing that it was “not sustainable”. He said that the level of support offered by the government would be “significantly lower” and focus on the most vulnerable industries. A targeted approach has proved challenging, however, because many energy companies do not have data about their customers. Ministers are instead looking at a reduced universal scheme, although a final decision has yet to be made. The new scheme is expected to cost less than £20bn over 12 months, compared with £40bn for the existing one. Under the scheme businesses get a discount of up to £345 for a megawatt hour of electricity and £91 for a megawatt hour of gas. The hospitality industry has warned that a steep rise in energy costs combined with the impact of inflation “could prove fatal” for many businesses. Kate Nicholls, chief executive of UKHospitality, said: “This would be absolutely devastating for a hospitality sector which has faced average bill increases of 200%+ since April. Vital additional support maintained for those sectors recognised as vulnerable.”

Coming this month for Premium subscribers – the Who’s Who of UK Food & Beverage: Propel is to add a fifth major database to its Premium service this month. The Who’s Who of UK Food and Beverage will be the first time full profiles of the UK’s top 700 food and beverage operators will be available in one place. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database has taken 16 months to pull together, merging Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Propel managing director Paul Charity said: “This invaluable guide simply hasn’t existed in the UK before. It’s a reference guide to the 700 largest operators in the UK. It will also be updated every month because on average 50 or so companies update each month of the year. So if you want to find out the most up-to-date information on a company, this is the database you will need on your desk at all times. It is also a wonderful complement to our Blue Book of Turnover and Profitability which is also updated each month and ranks these companies by turnover, profit and profit conversion. Together they provide the UK’s most detailed and insightful profile of absolute and relative performance.” Premium subscribers also receive access to three other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database and the UK Food and Beverage Franchisor Database. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. 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 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.

UK pubs and restaurants cut winter hours to weather ‘perfect storm’ in 2023: Pubs and restaurants face a “perfect storm” of challenges this year as cash-strapped consumers slash spending and the government reduces its energy bills support – forcing many to cut their opening hours. The industry faced a plethora of challenges in 2022, including soaring energy bills, staffing shortages, rampant food inflation and fragile consumer confidence. Trade at bars, pubs and restaurants was further affected by a series of rail strikes which may have cost the industry at least £1.5bn in December alone. Kate Nicholls, the chief executive of UKHospitality, told The Guardian, businesses were concerned going into the first few months of the year, already a quieter time for pubs and restaurants, with many opting to cut capacity by 20%. “The fear is that people will tighten their belts quite considerably. That’s when the cost of living will bite. And you’ll see customers not going out as frequently.” Nicholls said an industry body survey in November indicated one in four people would not go out as frequently or spend as much because of the increased cost of living. “There’s no doubt quarter one is going to be tough. What we’re hearing is that around half of our members are restricting their opening hours, their capacity, the days of the weeks that they are opening, driven primarily by staff shortages being exacerbated by energy and the need to make sure that they can be as profitable as they possibly can. We’re hearing lots of people talking about curbing their capacity by about 20%, just simply to be able to match supply and demand. And we have seen in rural and tourist locations, quite a few businesses going dark over the winter months as they used to do in old-fashioned tourism times, seasonality, again, just to try to conserve cash and then reopen when the trade comes back.”

Lucky Saint secures £10m of new funding: Alcohol-free beer brand Lucky Saint, founded by Luke Boase, has secured £10m of new investment. The Series A funding round was led by consumer and technology growth investor Beringea and venture capital company JamJar Investments – set up by the founders of Innocent Drinks, the smoothie maker. The Grocer reports that other investors in the round included: Warburtons chairman Jonathan Warburton; Adam & Eve DDB co-founders James Murphy and David Golding; Karmarama founder Ben Bilboul; Meta VP for Northern Europe Steve Hatch; Wahaca chief executive and co-founder Mark Selby; and ex-England rugby union player Will Greenwood. Lucky Saint said it would use the funds to “consolidate its position as the UK’s largest independent alcohol-free beer”, accelerate the distribution of its draught offering, and kick-start an expansion into Europe. It also plans to expand its team and open a dedicated Lucky Saint pub at its headquarters in central London later this month. The success of the round reflected “a growing shift in UK drinking culture”, it said. Boase said: “This latest investment will ensure further success for the company in the UK and help us build a globally recognised alcohol-free brand. We all know JamJar’s track record in supporting and driving great consumer brands, and with Innocent as their story, we know we’ve got an exceptional team behind us.”

Cineworld to commence marketing process, denies AMC talks: Cineworld has said that in parallel with developing a plan to restructure its capital structure, it will also run a marketing process in pursuit of a “value maximising transaction for the group’s assets”, focused on proposals for the business as a whole. Following its announcement on 7 September 2022 of commencement by Cineworld and certain of its subsidiaries of chapter 11 cases in the United States, Cineworld said it has been in discussions with its key stakeholders to develop a proposed chapter 11 plan of reorganisation that seeks to maximise value for the “benefit of moviegoers and all other stakeholders”. It said that those discussions remain ongoing. The company said: “In light of recent media reports, Cineworld would like to clarify that neither it nor its advisers have participated in discussions with AMC Entertainment Holdings, Inc. regarding the sale of any of its cinema assets. Cineworld also understands that neither the ad hoc group of lenders under the group’s 2018 credit facility nor its advisers were party to discussions with AMC. In parallel with developing a plan to restructure the group’s capital structure, the company will also run a marketing process in pursuit of a value maximizing transaction for the group’s assets, focused on proposals for the group as a whole. It is expected that outreach to potential transaction counterparties will commence in January 2023 as plan negotiations continue. Any actionable, value-maximising sale transaction emerging from buyer outreach is expected to run in parallel with the pursuit of confirmation of the proposed plan. Cineworld has not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis. Furthermore, any sale transaction for the group as a whole would not include the sale of Cineworld itself and would therefore not be subject to the rules of the Takeover Code. As previously announced, it is expected that any restructuring or sale transaction agreed with stakeholders will result in a very significant dilution of existing equity interests in Cineworld and there is no guarantee of any recovery for holders of Cineworld’s existing equity interests.”

Britain’s dying high streets lose 50 shops a day: Almost 50 shops closed down every day last year as retailers grappled with soaring energy costs, wider inflation and online shopping, according to new figures laying bare the challenges on the high street. More than 17,000 sites around the UK shut their doors for the last time, according to figures from the Centre for Retail Research. The Telegraph reports this figure is almost 50% higher than 2021 and marks the highest number of closures in the last five years. Only 32% of the closures followed insolvency proceedings. The rest were due to larger retailers deciding to close some stores to cut costs, or independents deciding to throw in the towel. Almost 65% of the sites were closed by independents, and the rest by large retailers. There are 423,690 retail sites in the UK as of the end of 2022, including those which are vacant or to let. Professor Joshua Bamfield, director of the Centre for Retail Research, said: “Rather than company failure, rationalisation now seems to be the main driver for closures as retailers continue to reduce their cost base at pace.”

Former Marston’s CEO Ralph Findlay awarded OBE in New Year Honours list: Ralph Findlay, the former chief executive of Marston’s and current chairman of C&C Group, was awarded an OBE in the New Year Honours list. Findlay, who stepped down from his role of chief executive of Marston’s at the end of September in 2021, after 20 years in the role, was awarded the OBE for services to the hospitality sector. He is also currently chairman of Kent-based house-building company Vistry. At the same time, Ivan Menezes, chief executive of Diageo since 2013, was appointed a knight for services to business and equality. Menezes has steered the drinks group behind Guinness stout and Johnnie Walker whisky to huge commercial success, doubling its stock market value to £83bn, as well as being a cheerleader for gender equality. Propel previously reported that Elaine Clarke, founder and chief executive of Liverpool hospitality group Baa Bar, had been awarded an OBE in the New Year Honours list. Clarke has enjoyed a career that has spanned more than three decades and was given the award for her services to hospitality.

Nightcap promotes Dawn Donohoe to group managing director: Nightcap – the owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars – has promoted Dawn Donohoe to group managing director. Donohue joined the listed business in June 2021 as managing director of the then London Cocktail Club. She joined Nightcap from Enhanced Hospitality, the food and entertainment-led business that at the time operated several venues situated in London’s Camden Market, including Dingwalls and Shaka Zulu, as well as Blacks private members’ club in Soho and sister company, We Are Bar. She was also an original senior team member at Urbium/Novus that launched its expansion across the West End and subsequent UK rollout. At the same time, Jim Robertson has been promoted from managing director of Barrio Bars to managing director of Nightcap’s London estate. He will continue to look after Barrio Familia and Disrepute as well as adding The Adventure Bar Group and The Cocktail Club London bars to his remit. In November, Nightcap said that due to uncertainty in the economic climate, it will slow down its expansion plans of new site openings during its current financial year and continue it as market conditions improve.

Pano Christou appointed non-executive director of Espresso House Group: Espresso House Group, the largest coffeehouse chain in the Nordic region, has appointed Pano Christou, the chief executive of Pret A Manger, as a non-executive director. Espresso House operates almost 500 coffee shops in Sweden, Norway, Finland, Denmark and Germany, and since 2015 been backed by JAB Holdings, which also backs Pret. Christou, who has been with Pret for over 22 years, was made its chief executive in 2019. Late last month, Pret struck an agreement with retailer Fox Group and the Yarzin Sella Group to launch in Israel. The move is part of Pret’s plan to double the size of its business within the next five years. It plans to expand into five new markets by the end of 2023. A raft of new franchise agreements in 2022 will see Pret launch in India, Spain and Portugal, while expanding its presence in the UAE and USA, alongside the UK.

Dubai scraps 30% alcohol tax and licence fee: Dubai has scrapped its 30% alcohol tax in an apparent bid to boost tourism. The Associate Press (AP) reports it will also stop charging for personal alcohol licences – something anyone who intends to drink needs to carry. Dubai has been relaxing laws for some time, allowing the sale of alcohol in daylight during Ramadan and approving home delivery during the pandemic. This latest move is thought to be an attempt to make the city more attractive to foreigners, in the face of competition from neighbours. The two companies which distribute alcohol in Dubai, Maritime and Mercantile International (MMI), and African & Eastern, said they would reflect the cut in tax for consumers. “Since we began our operations in Dubai over 100 years ago, the emirate’s approach has remained dynamic, sensitive and inclusive for all,” MMI spokesman Tyrone Reid told AP. “These recently updated regulations are instrumental to continue ensuring the safe and responsible purchase and consumption of alcoholic beverages in Dubai and the UAE.” It is not clear if the move, which took effect on Sunday, will be permanent. The FT described the move as a one-year trial, citing “industry executives informed of the decision”. Expatriates outnumber nationals by nine to one in Dubai, known as the Gulf’s “party capital”, and residents commonly drive to Umm al-Quwain and other emirates to buy alcohol in bulk. Dubai has historically managed to attract more tourists and wealthy foreign workers than its neighbours, in part because of its tolerance of a more liberal lifestyle. But now it faces increasing competition from rivals developing their hospitality and finance sectors.

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