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Morning Briefing for pub, restaurant and food wervice operators

Thu 3rd Aug 2023 - Update: Wingstop UK has record sales week, Tom Kerridge, Shaftesbury H1, greenwashing
Wingstop CEO – UK reports record sales week, business well-positioned for growth: Michael Skipworth, president and chief executive of Wingstop, has said the brand’s UK business has set a record sales week, and that the brand’s international business is well-positioned for further growth. Lemon Pepper Holdings, which is rolling out Wingstop across the UK, currently operates 35 sites here. Skipworth said: “We believe our international business is well positioned for growth. During the first half, we saw an acceleration in international same-store sales growth and the investments we have been making and the team are paying off. We’re really excited about the momentum we see in our international business and the demand that’s in our pipeline. I’ll give you one example – and that is the progress we’ve made in the UK. Last week, our UK business set another record week of sales. And in fact, our original restaurant in the UK, in London’s Shaftesbury Avenue, that opened roughly five years ago, last week had a record week and sold over $100,000 (£78,100) in sales. So, I think that just speaks to some of the momentum that I referenced.” Lemon Pepper Holdings, recently secured its second standalone site in Scotland, in Glasgow. The business, which recently opened its 35th UK site, at Grey’s Brewery Yard in Chelmsford, has secured a site adjacent to Nando’s at the St Enoch Shopping Centre in Glasgow’s city centre. The brand, which already operates out of a Deliveroo Editions site in Glasgow, also operates a restaurant at the St James Quarter scheme in Edinburgh. Last month, Propel revealed that the business had added a site in Southampton to its 2023 openings pipeline. It has taken on the ex-Bok Shop site in the West Quay scheme. Propel revealed in June that Lemon Pepper Holdings had further strengthened its openings pipeline as it looks to reach 40 sites and a revenue of more than £60m by the end of this year. New restaurants will also be opening this year in Islington’s Upper Street, Birmingham’s New Street and London’s Wood Green. It is understood to also be in discussions to bring restaurants to Hounslow and Edinburgh this year.

One day to go before next edition of The New Openings Database release, to show details of 108 new sites, 6,000-word report included: The next edition of The New Openings Database will show the details of 108 newly announced site openings and upcoming launches for Premium subscribers when it is published tomorrow (Friday 4 August), at midday, including which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis, and the next edition features growing restaurant and café brands, niche cuisine, and expanding experiential concepts. Premium subscribers will also receive a 6,000-word report on the new additions to the database. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. This month, Propel will launch the UK Food and Beverage Franchisee Database – the first time that profiles of 100 of the top food and beverage franchisees have been available in one place in the UK. The go-to database, which features many of the big franchise operators running Costa Coffee, McDonald’s and Domino’s sites, brings together a wealth of information on an increasingly important part of the market, and the first edition will feature more than 32,000 words of content. The sixth major database exclusive to Premium subscribers, it will be sent out bi-monthly, including new entries and updates to existing entries. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around the company’s background, site numbers and board make-up. 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 being given exclusive access to the recording and slides to Propel Multi-Club Conferences. They 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. 

Kerridge. “Every day feels like you’re walking uphill, on glass, barefoot”: Chef Tom Kerridge has said there “hasn’t been any positivity or good news in three or four years,” for the hospitality sector, and “every day feels like you’re walking uphill, on glass, barefoot”. Talking to the BBC, the chef said since the pandemic, there’s been “absolutely no let-up” for hospitality venues, says the chef who runs six restaurants – including The Hand and Flowers, the only pub in the UK with two Michelin stars. Kerridge, who has been running businesses for 18 years, says the various costs involved usually fluctuate independently but have now all risen at once, like a “huge wave”. These include energy bills, rent and mortgage repayments, food and insurance – even cleaning materials. “There isn’t a single thing that is cheaper,” he said. Energy bills in particular have been “catastrophically massive”. Kerridge said a lot of venues are just “existing” – being busy just over the weekend doesn’t necessarily mean turning a profit though. This means pubs and restaurants are having to raise prices to stay afloat – just when customers, affected by the cost-of-living crisis, have less money in their pockets. “We’re stuck in this Catch-22 situation,” said Kerridge. Despite the current pressures says he is “either wisely or stupidly” opening a new venue in London this year – A Butcher’s Grill & Tap in Chelsea, as previously revealed by Propel. “I’m very much of the mindset that you lean into a problem rather than let it wash over you,” he said. “Other parts of the business, we’re just battening down the hatches and trying to make it work.”

Shaftesbury sees “excellent momentum” post merger: Shaftesbury, the West End landlord that has recently merged with CapCo, has reported “excellent operational momentum with high footfall, positive trading activity, strong demand for all uses, excellent leasing activity and low vacancy” during the six months to 30 June 2023. The company said estimated rental value (ERV) growth over the six months resulted in a 3.3% (like-for-like) increase to £235m and an annualised gross income increase of 5.6% to £188m. It said that high footfall across the West End was buoyed by increasing international visitor numbers. Ian Hawksworth, chief executive, said: “We have had an excellent start as a newly merged company, creating the leading central London mixed-use REIT. The team has come together to deliver strong performance with growth in annualised rent and ERV with a strong pipeline of demand for the second half. Despite the challenging macroeconomic backdrop, valuations are unchanged reflecting the resilience of our exceptional portfolio. Trading conditions across our West End locations are positive, with high footfall and customer sales now tracking 15% ahead of 2019 levels. 220 leasing transactions completed in the first half of the year, at rents on average 5% ahead of December 2022 ERV providing confidence in the prospect of continued rental growth from our unique portfolio. We are already seeing the benefits of the combined platform and with our strong balance sheet, we look forward with confidence on delivering further growth and returns in the years ahead.”

Cash-strapped over-50s should consider delivering takeaways, minister suggests: People over 50 should consider delivering takeaways, a minister has suggested as he encouraged them to consider job opportunities they “might not otherwise have thought of”. Cash-strapped older people should be open to flexible jobs traditionally targeted towards the young, work and pensions secretary Mel Stride told the Times on a visit to food delivery firm Deliveroo’s London headquarters. Asked if the over-50s should apply for jobs often viewed as being for young people, he said: “There are loads of great opportunities out there for people and it’s of course good for people to consider options they might not have otherwise thought of.” He added: “You really do need to sensibly stop, take where you are in life, and assess whether for example you’ve got enough money to get you through with the kind of lifestyle and living standards that you’re expecting.” He said of firms such as Deliveroo: “What we’re seeing here is the ability to log on and off anytime you like, no requirement to have to do a certain number of hours over a certain period of time, which is driving huge opportunities…From an employer’s point of view in a tight labour market, it’s absolutely essential if you want to access all the available talent that you provide as flexible an offer as you can.”

Companies face pressure to disclose net zero credentials in greenwashing crackdown: Companies will be pressured to disclose their net zero credentials as ministers crackdown on greenwashing. The Telegraph reports the Business and Trade Department announced on Wednesday that the government will adopt internationally approved climate reporting standards in an effort to maintain London’s attractiveness as a global financial centre. It said the UK’s disclosure standards will be based on those published last month by the International Sustainability Standards Board (ISSB), a group established at the Cop27 climate summit to set global rules on environmental reporting. Under the new rules, companies will face more pressure to publicly disclose their impact on the climate, including on their so-called “scope three” emissions, which are created by suppliers providing goods and services. The City watchdog will oversee disclosures from UK-listed companies while the government will oversee them for UK registered companies and limited liability partnerships. It comes as ESG investing increasingly comes under fire with critics arguing that some companies and investors are using the catch-all term to “greenwash” – giving false information to promote an environmentally responsible image. The Department for Business and Trade said the aim of the new reporting rules is to make information that companies disclose “globally comparable and decision-useful for investors”. It added: “The disclosures required by these standards will help investors to compare information between companies, thereby aiding decision-making; supporting the efficient allocation of capital, and smooth running of the UK’s capital markets.”

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