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Morning Briefing for pub, restaurant and food wervice operators

Tue 1st Aug 2023 - Restaurant groups' delivery and takeaway sales return to year-on-year growth
Restaurant groups' delivery and takeaway sales return to year-on-year growth as price rises drive increase: Delivery and takeaway sales at Britain’s leading managed restaurant groups in June were 4% ahead of the same month in 2022, CGA by NIQ’s latest Hospitality at Home Tracker shows. It is the first year-on-year growth in the tracker since late 2021, following 18 consecutive negative months in the wake of the post-covid reopening of restaurants. Delivery and takeaway/click and collect sales were up by 2% and 7% respectively in June. However, growth in the delivery channel was driven by increased menu prices, with order volumes falling 8% year-on-year. With inflation as measured by the Consumer Prices Index standing at nearly 8%, combined sales were down on June 2022 in real terms. The tracker shows deliveries and takeaways accounted for 14% of managed restaurant groups’ total sales in June – substantially down from the figure of 24% in 2022. Food took a 90% share of at-home sales while drinks had a 10% split – a slight increase from 8% last year. Karl Chessell, CGA’s business unit director – hospitality operators and food, EMEA, said: “After a surge in delivery and takeaway sales during covid and a steady decline after the end of lockdowns, the balance of eating-out and ordering-in is finally settling down. Steady growth of in-restaurant sales has been positive for managed groups, but the return to year-on-year increases in delivery and takeaway channels is now welcome too. However, the ongoing drop in order volumes is a sign that consumers are keeping a close eye on their spending, and real-terms growth is likely to remain challenging until household bills ease.”

BBPA – beer tax rises to cost industry £225m extra a year: UK brewers and pubs have pleaded with the government “no more costs”, as they prepare for costs increases from today (Tuesday, 1 August), as beer duty reaches the highest level ever. From today brewers will pay 10.1% more tax on bottles and cans of beer, meaning tax will make up around 30% of the cost of a 500ml bottle, the British Beer & Pub Association claimed. Duty paid on draught beer in pubs will be frozen but the tax increase on packaged beer is set to have an impact on both breweries and pubs, with the BBPA saying it will add an extra £225m of costs per year across the industry. The changes, which are being introduced as part of wider reforms announced in 2021, simplify the regime so that duty paid on all alcoholic drinks is relative to their strength (ABV). The move is part of the government's plan to incentivise the production of lower-strength alcoholic drinks, with products qualifying for the new lower rate of duty now being anything less than 3.5%, up from 2.8% in the previous system. The BBPA said the new system is a positive step forward, but with other cost increases showing no signs of let up, pubs and brewers are pleading for government to guarantee an end to price increases and stop further hikes to duty in the future. Emma McClarkin, chief executive of the BBPA, said: “Our duty system was long-overdue reform, to better incentivise the production of lower-strength products and nudge consumers towards them. This is a very welcome change for our industry that will help to generate even more variety and greater innovation in our sector, as is the freeze for draught beer to support pubs. But brewers don't just supply draught products, they package beer in bottles and cans, so the 10.1% duty increase will have a huge impact, and overall will likely lead to costs going up across the whole category.”

Developers flout pub protection regulations in third of closures, pub stock increases: A third of pub losses happen without the required planning permission, according to new research. The data – published as part of the Campaign for Real Ale’s (CAMRA) biennial pub closure figures – shows a total of 95 pubs lost to conversion or demolition across the UK in the first six months of the year, with 31 of those lacking planning permission. Pubs in England cannot be converted or demolished without planning permission. A further 772 were classed as “long-term closed”, equivalent to 30 pubs a week, and by far the highest figures CAMRA said it had seen since it started producing comparable figures in 2021. But CAMRA found that despite 95 pubs being demolished or converted, a total of 127 new ones had opened – slightly increasing the UK's pub stock. These figures come as calls mount for the government to change its plans for High Street Rental Auctions. Pitched as a regeneration scheme, these auctions would see developers gain the ability to gut and convert vacant pubs without the need to apply for planning permission. CAMRA pub and club campaigns director Gary Timmins said: “We believe if local planning authorities are not able to apply pub protections as set out in legislation, then government in Westminster must step in to provide clearer guidance. These are national policies in England and yet the variation that our campaigners see between councils with the strongest pub protection policies, and those that view pubs as an inconvenience, is shocking. We are also calling on the Welsh government to urgently introduce and enforce planning protections for pubs in Wales – and for the Scottish government to end the current loophole where pubs can be demolished without planning permission.”

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