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Morning Briefing for pub, restaurant and food wervice operators

Mon 25th Sep 2023 - Update: Brighton Pier Group, drinking guidance, economy slowdown fears, drone takeaway deliveries
Brighton Pier Group CEO – trading continues to be impacted by events outside our control, operating profit for full year likely to be below expectations: Brighton Pier Group chief executive Anne Ackord has said trading continues to be impacted by events “outside our control” in what is a challenging environment. The company reported for the 12 weeks to 17 September 2023, regular weekend train strikes in particular have reduced visitor numbers on the pier by 18% versus comparable weeks in 2022. Ackord said combined with the unseasonably wet weather and the fire at the nearby Royal Albion Hotel that disrupted sales on the pier for the final two weeks of July (two of the top ten trading weeks of the year), trading has been “unusually difficult”. The company stated: “These factors continued to affect trading in the 12-week period ending 17 September 2023 resulting in total sales of £12.3m, down £0.3m versus the previous year. While the board has been encouraged to see improved trading in the first three weeks of September, macroeconomic challenges continue to impact the business. This, together with the weaker than expected summer trading period, has led the board to conclude that operating profit for the current financial year is likely to be below current expectations. The group’s outlook in the short-to-medium term remains cautious.” Total sales for the 12-week period to 17 September 2023 for the pier were £6.0m, down £0.5m versus 2022), “due to a combination of one-off factors previously noted”. Conversely, the poor weather resulted in stronger trading in the golf division, where sites are located inside larger shopping centres. Total sales of £1.7m were £0.2m higher than the previous year. Lightwater Valley traded ahead of 2022, with total sales of £2.7m, up £0.3m. The group said this was due to increased visitor numbers to the park, which were 24% up on last year principally due to warm weather in September and several different promotional offers that were made available to guests. As a result of these offers, overall spend per head was lower than in 2022. The bars division “continues to be impacted by the headwinds in the UK economy”. The group said its younger demographic has been more severely affected by price inflation, resulting in lower spends and reduction in numbers of visits. Total sales were £1.9m, down £0.3m versus last year. It comes as the company reported revenue was down to £16.2m for the six months ending 25 June 2023 compared with £17.3m the year before. Group Ebitda fell to £1.4m (2022: £3.0m). Group gross margin was 86% (2022: 87%). Loss before tax (excluding highlighted items) was £1.0m (2022: profit of £0.7m). Net debt was £4.7m (25 December 2022: £7.1m). Brighton Palace Pier sales performance was up 2% versus 2022, but down £0.2m on Ebitda at £0.5m. It said the bars division “suffered from a contraction in consumers’ disposable incomes resulting from the challenging macroeconomic environment, with sales down across the estate”. The golf division saw lower footfall across the estate in June and higher costs but with the exception of June, trading has been consistent, with the division generating £1.4m of Ebitda (2022: £1.9m). Lightwater Valley added new dinosaur-themed attractions for 2023. Admissions were down versus the prior year primarily due to wet weather, but the park achieved a new weekend record number of visitors during the Coronation of King Charles III in May. Ackord said: “As highlighted in our last trading update, the group is navigating a challenging environment, with persistent high inflation and cautious spending by consumers negatively impacting trading. When combined with the ongoing cost pressures, this has resulted in the group recording lower than expected sales and earnings in the first half of 2023. The group continues to be cash generative and has a robust balance sheet, making it well placed to weather the macroeconomic challenges and execute its longer-term growth strategy. I believe as a result there is significant upside opportunity for the group in a more typical year.”

Premium subscribers to receive two databases and access to videos from Propel Multi-Club Conference and summer party this week: Propel Premium subscribers are to receive two databases this week. The updated Propel Multi-Site Database, which is produced in association with Virgate, will be released on Friday (29 September), at midday. It will include 56 new multi-site companies, taking the number of companies featured to 2,983. Before that, the updated UK Food and Beverage Franchisor Database will be sent to Premium subscribers at midday on Wednesday (27 September). Ten new companies have been added, while five which are no longer franchising or trading have been removed, taking the total to 215 businesses featured. Premium subscribers are also to receive access to all the videos from this month’s Propel Multi-Club Conference and summer party. They will be sent 12 videos on Friday at 9am. Premium subscribers also receive access to four other databases: the New Openings Database; the Propel Turnover & Profits Blue Book; the Who’s Who of UK Food & Beverage; and the UK Food and Beverage Franchisee Database. 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 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.

Pub staff are told to stop using phrases like ‘same again?’ to help limit binge drinking: Pub staff will be told to stop using phrases such as “same again?’” and “is that a double?” in a bid to cut binge drinking. The guidance features in updated training guides produced by the alcohol industry for people working in the hospitality sector, reports The Mail. The online course encourages bar staff to avoid any language that makes people feel pressured to drink and warns against disparaging those who choose low or no-alcohol options. The guidance has been produced by the International Alliance for Responsible Drinking, a not-for-profit group dedicated to reducing harmful drinking. The organisation is supported by beer, wine, and spirits producers, including Heineken, Diageo, AB InBev, Beam Suntory, Pernod Ricard and Brown-Forman. Trainees are told: “Avoid using presumptive language: it can make customers feel pressured to drink. For example, don’t say ‘same again?’, instead say ‘what would you like this time?”. It adds: “Don’t say ‘do you want a large?’, instead say ‘would you like a small or large measure?’.” The course material is being held up as an example of best practice, with individual bar and pub chains able to adapt it to their own needs, if desired. Henry Ashworth, IARD president and chief executive, said: “IARD member companies support retailers’ and hospitality venues’ efforts to have their staff sell and serve alcohol beverages responsibly, to help prevent sale and service to those underage or knowingly intoxicated. Towards this, we are proud to launch our latest resources that can be used to give staff the confidence to deny sales and service where necessary.”
UK economy set to slow in second half, says KPMG: The UK economy is heading for a marked slowdown in growth in the second half of the year as high interest rates and policy uncertainty before a general election begin to bite. In its latest quarterly growth forecast, KPMG said annual economic growth would slip from 0.4% this year to 0.3%, a notable slowdown from the 4.1% growth rate recorded last year when the economy was recovering from the impact of the pandemic, reports The Times. The forecast said the UK’s public finances were “fragile” amid pressure from MPs for chancellor Jeremy Hunt to embark on a tax-cutting blitz before a general election late next year. “With the backdrop of weakening global economic conditions coupled with the lagged impact of higher interest rates, the UK economy could struggle to keep its head above water in the second half of the year,” Yael Selfin, chief UK economist at KPMG, said. “Our long-term assumption is for the UK economy to grow by an average 1% , which is significantly lower than the average GDP growth of 1.9% between 1990 and 2019.” KPMG said the UK’s unemployment rate would hit 4.8% next year, from 4.3% at present.
Irish start-up plans UK’s first drone takeaway service: An Irish start-up is planning to deliver Britain’s first takeaways by drone after applying for a licence with the airspace regulator. Dublin-based Manna, which is already delivering meals, groceries and coffee in Ireland with the autonomous aircraft, plans to launch its first UK service in the first half of next year. Manna chief executive Bobby Healy said the company had made a detailed licence application to the Civil Aviation Authority. It hopes to launch in a British suburb next year, covering around 100,000 households. Healy declined to say where in the UK but said it would involve between ten and 15 aircraft, carrying out 500 to 1,000 deliveries a day between them. He told The Telegraph: “The UK is probably our most important market in the continent of Europe, both in terms of cultural alignment but also the scale of the market. The UK does more than 900 million food delivery takeaways and deliveries a year.” Britain was previously viewed as an attractive destination for drone operators, with Amazon choosing a site near Cambridge to conduct its first tests almost a decade ago. However, the company never launched commercial operations, instead moving testing to the US before making its first deliveries this year. Healy said the CAA was only currently granting drone licences in areas where there were no other aircraft, limiting the potential in Britain’s congested airspace. Manna has made more than 160,000 drone deliveries in Ireland from locations including Tesco and Subway, with only one incident in which a drone deployed its parachute. Orders are made via the app and loaded onto a drone at the store. A drone then hovers over the destination, lowering the cargo from the air. The company says most orders are delivered in under three minutes and that the drones make less noise than cars while taking traffic off the road.

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