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Morning Briefing for pub, restaurant and food wervice operators

Fri 23rd Jun 2023 - Update: Restaurants’ delivery and takeaway sales stabilising after post-covid slide
Restaurants’ delivery and takeaway sales stabilising after post-covid slide: Delivery and takeaway sales at Britain’s top managed restaurant groups in May were just 1% behind the same month last year, CGA by NIQ’s latest Hospitality at Home Tracker shows. Year-on-year sales by value have now fallen for 18 months in a row, after the easing of covid-19 restrictions brought people back out to restaurants. Delivery and takeaway/click-and-collect orders were down by 10% and 12% respectively in May – an indication that trading is being sustained by increased menu prices. After adjustments for inflation, May’s sales by value were substantially behind May 2022 in real terms. However, comparisons are easing, the Tracker shows. Year-on-year sales drops have now been below 3% for three months in a row, suggesting that consumer demand is starting to stabilise. Deliveries and takeaways accounted for 15% of managed restaurant groups’ total sales in May. Karl Chessell, CGA’s director – hospitality operators and food, EMEA, said: “Delivery sales during the lockdowns of 2020 and 2021 were a lifeline to restaurant groups, and a dip was inevitable when people started eating out again. After an 18-month slide, the balance of eat-in and at-home sales may now be settling into a new normal, though high inflation means proper growth is still some way off. Rising costs and fragile consumer confidence continue to make trading challenging, and restaurants will be hoping for respite as we move towards the second half of 2023.”

Host of pub operators set to join updated Premium Database of Multi-Site Companies: A host of pub operators are among the 16 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 (30 June), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Morgan Pub Collective, the multi-site operator led by Richard Morgan, which currently has 11 sites in its portfolio. Also added this month is the Bart & Taylor Collection, led by Andrew Taylor, which operates the Adam & Eve pub in Alnwick, Northumberland, and the Mr Fox pub in Surrey Street, Croydon. In addition, Freespirit Pub Co, the Midlands pub company led by former British Institute of Innkeeping licensee of the year Mark Higgs, which operates six sites, will be featured. Premium subscribers will also receive a 1,300-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 2,869 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 7 July, 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 2,000-word report on the new additions to the database. Premium subscribers also receive access to three other databases: the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett. In this week’s Premium Opinion, which will be sent to subscribers today (Friday, 23 June) at 5pm, Wingett talks to Five Guys UK chief executive John Eckbert on the eve of the better burger brand’s tenth anniversary of entering the market here, its journey so far and what comes next. Meanwhile, Paul Flatters, co-founder and chief executive of insights firm Trajectory, discusses trust in leadership and whether the hospitality sector can avoid “greedflation” contagion.

Premier Inn room rates soar as budget hotel era ‘evaporates’: Analysts have said price rises announced by Whitbread have indicated that the idea of budget accommodation in Britain had “all but evaporated”. The cost of a room at Premier Inn’s hotels in London rose sharply over the last three months, with tourists visiting for the coronation of King Charles and strong demand for budget stays in the capital boosting the chain, its owner, Whitbread, has said. Britain’s biggest hotel chain, which runs nearly 900 hotels in the UK and Germany, said it had benefited from an influx of visitors to London for the royal event. In the capital, the average room rate rose from £97 to nearly £112 a night, while outside London, rates went up by 12% to £71, the company in its trading update for the first quarter of its financial year. Derren Nathan, head of equity research at Hargreaves Lansdown, told The Guardian: “Whitbread’s management certainly aren’t sleeping on the job if today’s first-quarter update is anything to go by. Guests are stomaching some pretty hefty tariff rises in the UK. At nearly £112 per night, it seems that the concept of budget accommodation in the UK has all but evaporated. Whitbread continues to grab market share in its home market, but with occupancy on the wane we wonder if it will slow its room-opening programme in the UK. It was also encouraging to see a recovery in food and beverages, which was the fly in Whitbread’s ointment last year.” The travel industry has bounced back from the worst of the pandemic, and Premier Inn said earlier this year that its profits had surpassed pre-pandemic levels. However, the cost of living is boosting demand for budget hotels. Whitbread has also raised its prices to manage higher energy and wage bills. It said UK comparable accommodation sales rose 16% in the 13 weeks to 1 June against the same period last year. Food and drink sales at the group’s restaurant chains rose 10%. Revenue per available room continued to outperform the wider market and is now 40% higher than pre-pandemic levels. Room occupancy levels in London fell slightly but edged higher elsewhere. Premier Inn opened 348 new rooms across the UK and Ireland over the quarter and is on track to open between 1,500 and 2,000 rooms this year. It has benefited from the demise of smaller independent hotel operators, which are struggling to cope with higher costs and labour shortages, said the newspaper. Premier Inn is also expanding in Germany, where its division remains loss-making but is expected to break even this year as demand recovers from the pandemic. It has 56 hotels with 10,000 rooms, and a further 32 hotels and 6,000 rooms in the pipeline.

Bailey – ‘unsustainble’ pay rises ramping up interest rates: Andrew Bailey has told Brits to stop demanding “unsustainable” pay rises after the Bank of England ramped up interest rates in a bid to curb inflation. The Bank governor warned that the current level of wage settlements “cannot continue” but denied that he actively wanted to trigger a recession. He made clear he will do “what is necessary” to bring inflation back to the 2% target – less than a quarter of the current reading. High wage settlements are among the factors that have spooked the markets and forced the Bank’s hand, although it has been heavily criticised for failing to act early enough to combat prices, reports The Daily Mail. Asked whether people were asking for too much, Bailey said: “Let me be very clear on this, because it’s an important issue. We’ve got to get, and we will get, inflation back to its target. To do that I have to be clear – and we expect inflation to come down this year – to do that we cannot continue to have the current level of wage increases. And we can’t have companies seeking to rebuild profit margins which mean prices continue to go up at their current rates. But what I would say to people is we expect inflation to come down, and it is important then that price setting and wage setting reflects that. Because the current levels, I’ll be absolutely honest, are unsustainable.”

Stuart Broad’s pub to reopen next week: England cricketer Stuart Broad is to re-open his fire-ravaged country pub next week after a £1m refurbishment. The Tap and Run in Upper Broughton, Nottinghamshire, was gutted in a blaze caused by a faulty tumble dryer in June last year. Broad, currently starring in the latest Ashes series, owns the pub, which is set to reopen on Monday, with former England bowler Harry Gurney. “We can’t help but feel grateful for the opportunity to rise from the ashes,” Gurney told The Daily Mirror. The pub is already taking bookings ahead of the re-opening, just over a year after the inferno. Broad was woken early on the second morning of the second Test against New Zealand at Trent Bridge last year by Gurney with the news that the pub was ablaze and being tackled by eight fire crews. Earlier this month, Propel reported that Broad was part of an investment group which had invested in Sixes, the cricket-based competitive socialising concept from the founders of Mac & Wild. Sixes, which made its US debut this week with an opening in Dallas, Texas, opened its first UK site in December 2020, in Fulham, west London. There are now four sites across London, plus further locations in Manchester, Birmingham and Leicester, and an upcoming opening in Brighton has been confirmed.

Only a fifth of Brits following government guideline to eat seafood twice a week or more: A YouGov survey commissioned by the Marine Stewardship Council (MSC) shows that only one in five Brits (19%) follow the government’s recommended guideline to eat seafood twice a week or more, and only one in four (26%) eat fish once a week. However, if everyone in the UK ate their recommended amount of seafood each week, an additional 750,000 tonnes of seafood would be required annually, which is nearly the same as what the UK currently consumes. Current consumption in the UK is 887,000 tonnes of seafood – equivalent to 5.2 billion portions of fish and chips by weight. The MSC warn that if eating fish increases, as the government recommends, it will lead to overfishing. Currently, the UK consumes 152,000 tonnes of sustainably caught seafood, as certified by the MSC. The body recommends eating mussels as “one of the lowest carbon seafoods”, while sustainable options include kipper and sardines. George Clark, MSC’s UK programme director, said: “While people should try to eat the recommended two portions of seafood each week for their health, it’s only when they choose sustainable seafood that they will help protect the environment too. In the UK we have some incredible fisheries and communities that have achieved MSC certification, such as Cornish hake, Shetland brown crab and Poole Harbour clams. There’s a fantastic variety of choices for locally and imported fish and seafood in the UK, and great, sustainable choices to make that are both delicious and nutritious.”

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