Britain’s managed pub and restaurant sales drop 72.6% in December
Britain’s managed pub and restaurant groups saw total sales drop 72.6% over the festive season, in what should have been the sector’s busiest trading period of the year, according to the latest Coffer Peach Business Tracker. Trading figures for the five weeks from 30 November to 3 January showed drink-led managed pubs and bars were worst hit, with total sales down 83.7% and 87.2% respectively on the same period last year.
Managed food-led pubs and pub restaurants were down 78.2%, while group-owned restaurants saw total sales drop 57.9%. Regionally, London, which was largely open at the beginning of December, also fared slightly better than the rest of the country with sales down 66.8% on last year, compared with 73.9% down outside the M25.
At the beginning of the festive period Tracker figures showed just over half of the country’s managed pubs, bars and restaurants were trading again after November’s lockdown. By the end of December the number was less than 10%. At the end of December, underlying annual sales for the whole market were down 50.5% on the previous 12 months. “Restaurants had a marginally less miserable time, benefiting from people out Christmas shopping at the start of month and more importantly from delivery business,” said Karl Chessell, director of CGA, the business insight consultancy that produces the Tracker, in partnership with The Coffer Group and RSM.
“Overall in December, delivery accounted for 23% of restaurant chains’ sales. The tier system had already kept pubs and restaurants across large parts of the country closed from the start of the month, but the escalation of measures saw the sector effectively grind to a total standstill by the end of December.” David Coffer (pictured), chairman of The Coffer Group, added: “With most operators now unable to create any turnover whatsoever the accrual of debt has become critical.”
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Hospitality job losses for 2020 hit 660,000, shrinking the workforce by more than a quarter over the past 12 months, according to new research by software provider Fourth. However, December saw the fewest job leavers since May, indicating the continuation of the furlough scheme is helping to protect and preserve a portion of jobs in the market place.
The data also revealed the workforce shrunk by 28% in December, compared with the same month in 2019. This can be broken down by sector, where pubs experienced the least negative impact with a year-on-year drop in labour of 22%. This is followed by QSRs with a drop of 30%, and the restaurant sector with a 31% drop. The most impacted sector, again, was hotels, where there was a 33% reduction in labour compared with last year.
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The new package of financial support for Scottish operators will not be enough to prevent some sector businesses from failure and jobs being permanently lost, UKHospitality has warned. The Scottish government has announced, in addition to the grants businesses receive through the Strategic Business Framework Fund, businesses closed by level four restrictions are to receive a one-off grant of up to £25,000. The £25,000 grant is being made available to larger hospitality businesses on top of the four-weekly £3,000 through the fund. Meanwhile, smaller hospitality businesses will get £6,000 on top of the four-weekly payment of £2,000. UKHospitality Scotland executive director Willie Macleod said: “Additional financial assistance is always welcome, but the reality is this is not going to be enough. We are talking about businesses that now have no revenue, or next to no revenue, whatsoever. The sector’s ability to generate any sort of income is almost non-existent, particularly for businesses in mainland Scotland. Financial support must go further if we want businesses to stay afloat and jobs to survive. We need confirmation the VAT cut and business rates holiday will be extended. This will, at least, give hospitality businesses some sense of stability and allow them to plan for what is going to be a very difficult year.” Finance secretary Kate Forbes said: “Crucially this essential funding will also help to close the gaps in UK-wide support for these impacted sectors and our one-off support for larger hospitality premises of £25,000 is considerably more generous than the £9,000 grant on offer in England. Of course we are acutely aware this support can never compensate for the full impact on business, but we must work within the resources that are available to us, and we continue to respond to the evolving economic challenges arising from the pandemic.”
Chancellor Rishi Sunak (pictured) has said as the UK comes out of the covid-19 crisis it will be important the hospitality industry is “given every possible chance to succeed and flourish”. Speaking in the House of Commons and replying to a question on future further support for the sector, Sunak said: “I will bear in mind other avenues for future support. As we come out of this it will be important the hospitality industry is given every possible chance to succeed and flourish.” However, he was less forthcoming on what that support would look like, side-stepping a question on the possibility of extending business rates relief and the current VAT cut, and refusing to be drawn on whether the furlough scheme could be extended past the end of April.
Pubs across the UK will be lost for good if they cannot reopen until May and do not get extended financial support from government, the British Beer & Pub Association (BBPA) has warned. The trade body has also said Downing Street needs to be clear on its roadmap for the reopening of pubs. BBPA chief executive Emma McClarkin said: “We really hope the speculation about pubs being forced to stay closed until May is not true. We strongly believe pubs are safe places to socialise and can play an important role in our social and economic recovery. If pubs are forced to stay close until May, it would mean they have faced 14 months of lockdowns and restrictions. How on earth could the government expect them to survive? UK pubs will be screaming ‘mayday’ long before a May reopening without significantly more financial support from government. The government has a duty to tell publicans when it plans to let them reopen with a clear roadmap alongside the vaccination programme. If it won’t be until May then it needs to extend financial support for them to survive and to brewers whose businesses also face jeopardy. In the more immediate future this means an extension to the chancellor’s latest grant support package and not just for pubs, but also breweries. In the longer term it means extensions to the business rates holiday and VAT cut, as well as a beer duty cut throughout 2021 and beyond. Without such support, local pubs in communities across the country will be lost forever.”
More than three quarters of businesses in the accommodation and foodservice sectors, including hotels and restaurants, experienced a drop in profits and turnover during the past few weeks compared with expectations in normal times, new data suggests. The Office for National Statistics (ONS) found half of businesses in the accommodation and foodservice sectors that took part in the latest poll had less than three months’ worth of cash reserves left. Some 28% of surveyed accommodation and food firms said they had no or low confidence that they would survive the next three months, the ONS’ latest voluntary fortnightly business survey covering the period from 14 to 23 December said. In the latest survey period covered, 41% of businesses in the accommodation and foodservice sectors were temporarily closed or paused trading, compared with 13% across all industries. The ONS said: “When splitting the industry into finer detail, the accommodation industry had 28% of its businesses temporarily closed or paused trading, compared with 43% in the food and beverage service activities industry.”
Experiential leisure operator Gravity is make its London debut at Southside Shopping Centre, Wandsworth, for an 80,000 square foot entertainment venue set to launch in the former Debenhams in summer 2021. Gravity started as a trampoline park company in 2015 and has since expanded into innovative entertainment concepts, helping to revitalise shopping centres and the high street across the UK. The Southside site will feature gaming experiences such as e-karting, augmented reality bowling, crazy golf, pool, ping-pong and shuffleboards. It will also offer an array of dining and drinking options, including a noodle kitchen, American diner and cocktail bar. The Southside joint venture (a joint venture between Landsec and Invesco Real Estate) and Gravity are investing £4m to redevelop the former Debenhams department store unit as part of a combined strategy to reimagine the destination and incorporate new and innovative concepts. David Heaford, managing director, development, at Landsec, said: “Leisure is an increasingly important component of a complete destination and Gravity is a significant addition that complements Southside’s existing offer. Southside is designed to offer everything the community needs, and this signing, at a challenging time for the industry, is a testament to the strength of our customer base and the centre’s appeal. Gravity’s exciting concept will inspire locals and draw people from across London, so we are excited to see this prominent site come to life later this year.” Harvey Jenkinson, co-founder and chief executive at Gravity, added: “This is a huge milestone for Gravity as we look to not just grow our business, but also the types of venues we are creating. We believe concepts like this will be the future of the high street and shopping centres, offering a solution for landlords who are looking to diversify and secure the future of their assets. This exciting entertainment hub will showcase Gravity’s ability to create venues that cater to a varied audience, which is so immersive they will feel like they could be in a completely different place in the world.”
All-day concept The Breakfast Club has appointed Steve Locke (pictured left), co-founder of the Be At One cocktail chain, as its interim managing director, Propel has learned. Locke, who remains committed to Lockes, the bar he launched in 2019 in Covent Garden, left Be At One in 2018 after the 33-strong chain’s circa £50m sale to Stonegate Pub Company. Locke formed Be At One with Rhys Oldfield and Leigh Miller in 1998. Propel revealed The Breakfast Club had begun the search for a managing director last November as it looks to grow the Charlie McVeigh-chaired, 12-strong business to 30-plus sites. Co-founder Jonathan Arana-Morton told Propel: “In November, I signed up to a LinkedIn premium account and made my first ever LinkedIn post, a speculative job advert for a managing director. The response (more than 3,000 views and 70 applicants) from people in and outside this industry was phenomenal and completely unexpected. I had the pleasure of spending most of December meeting some wonderfully talented people. This industry is in good hands. A process like this leads you to a solution you weren’t necessarily expecting. We are delighted to announce the appointment of Steve Locke as managing director of The Breakfast Club. The appointment is initially on an interim, part-time basis, to help set the business on a course to fly out of the post-pandemic traps. Steve comes from a background that puts ‘arms wide open’ hospitality front and centre. I’ve always maintained great hospitality will be the key driver as we move out of a covid eat-at-home, delivery-driven world. Steve is also one of only a handful of people in our sector who has made the exact journey we’re embarking on. His experience in scaling a business our size is priceless and as I said to him after our first meeting ‘you had me at Be At One’ – I’m a huge fan. Steve will be tasked with building the structure to enable The Breakfast Club to scale over the next five years. But this is not just about the next five years, he is also here to help us build a vision for a business we can be proud of 30 years from now. This is about building a legacy brand – we want to be the nation’s best-loved ‘caf’ and we hope these are the next steps on that journey.” Locke said: “Jonathan’s post really resonated with me as it had so many parallels with the Be At One journey. Everything I have ever done has been about working with great people and building personal relationships and Jonathan evidently sees things the same way. Together, we see plenty of opportunities in the hospitality industry as we move into 2021.” McVeigh added: “Our great challenge for 2021 is to remake The Breakfast Club into a business that is ready to grow to 30-plus sites when we bounce out of this crisis. Steve’s job is to get us ‘set for success’ on people, systems and mindset as we prepare to navigate the new normal that awaits.”
West End landlord Shaftesbury has announced the signing of Wing Wing, the London-based Korean crispy chicken specialist, for a site at 47-49 Charing Cross Road, Chinatown. Wing Wing takes inspiration from Korean food and popular culture, with a dining offer focused on ‘Chimaek’ – a combination of chicken and maekju, the Korean word for beer. Light, crispy wings come in a variety of flavours – each piece cooked to order and hand-brushed with a signature glaze – and sit alongside burgers, wraps, rice boxes, and salads on the brand’s menu. Wing Wing was also the first UK brand to have ‘bottoms-up’ beer dispensers that allow customers to serve themselves beer at the table. The Chinatown London restaurant, spanning 2,500 square foot across three floors, will be Wing Wing’s flagship location, and its third in the capital following Tavistock Square and Hammersmith, also featuring event spaces and KTV karaoke rooms. The store is set to open in spring 2021 and will implement appropriate covid-safe protocols and follow government guidelines for both the restaurant and event spaces. Carl Kjellqvist, managing director at Wing Wing, said: “Wing Wing brings two Korean institutions together – food and music. Our signature, hand-glazed crispy chicken has been incredibly popular since we started in London a few years ago, and we cannot wait to open the flagship restaurant in Chinatown, in the heart of cosmopolitan London and the ideal place to have a flagship for any east Asian brand.”
We have teamed up with Propel Multi Club conference series partners to offer the sector their expertise. Partners will offer more general advice and highlight some of the initiatives they are doing.
Companies supporting the BeatTheVirus campaign include Airship, Bums on Seats, CACI, Christie & Co, COREcruitment, CPL Learning, Cynergy Bank, Elliotts, Hastee, haysmacintyre, John Gaunt & Partners, KAM Media, Prestige Purchasing, S4labour, Startle, Ten Kites, The NPD Group, Toggle, Trail, Venners, Wireless Social, Yapster and sector trade body UKHospitality.
Propel managing director Paul Charity said: “It is amazing to see how the industry has come together during this crisis and here at Propel we want to do our bit. This is why we are working with Multi Club partners to offer expert support and advice to our readers and to answer their questions at what is a tough time for everyone.”
Readers can email questions for our experts to email@example.com. Please use BeatTheVirus in the subject line.
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