Phil Urban – M&B discounting unnecessary to entice customers, reduced capacity a bigger issue
Mitchells & Butlers (M&B) chief executive Phil Urban has said the company isn’t planning on widespread discounting to encourage customers back into sites and believes the bigger issue will be accommodating people because of reduced capacity.
Urban said despite the reduction in social distancing measures to “one metre-plus”, which would allow the majority of its sites to operate at 90% of capacity, the company would leave a greater distance between tables. He said this would help its teams operationally while trying to spread demand through the day.
He added as the furlough scheme continued to unravel there would inevitably be further casualties in the sector and therefore a reduction in supply. Speaking on a call to analysts from The Royal Saracens Head in Beaconsfield, Buckinghamshire, Urban said he believed there was “pent-up demand” from consumers to return to pubs and restaurants.
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Red Oak Taverns said it had taken the loan as a standby facility to ensure the business had available liquidity to support its gradual ramp-up of trade during the next few months. Red Oak Taverns will also use the funds to assist working capital and contractual obligations should the sector face another lock-down.
OakNorth was able to disperse the funds through the government’s Coronavirus Business Interruption Loan Scheme (CBILS). Red Oak Taverns has received a number of loans from OakNorth since 2016, including a £42m loan in 2018 to refinance its debt and support acquisitions.
McDonald’s UK and Ireland chief executive Paul Pomroy said: “Of course we aren’t fully back to normal. We aren’t ready to enable dine-in just yet and we know there are a few favourites still missing from the menu. We’re working on it – but will only do so safely when the time is right.”
Anglian Country Inns, the pub and restaurant operator led by James Nye (pictured), has secured £3.3m through the Coronavirus Business Interruption Loan Scheme (CBILS) from Cynergy Bank. The loan will be used by Anglian Country Inns, which operates nine pubs throughout Hertfordshire and Norfolk, to refinance existing debt and provide emergency working capital funding caused by the impact of coronavirus. While the government guarantee is for six years, Cynergy Bank is amortising the loan over a 25-year period. Nye said: “We were delighted to have completed the CBILS funding of both Anglian Country Inns and our sister-company The Farmhouse, which together means we are able to protect the business and ensure we come out of the pandemic stronger than ever.” Steve Crosswell, relationship director, hospitality, Cynergy Bank, added: “The Nye family has built a robust and solid business with high-performing assets and it typifies all that is good in a family-led business.”
Inception Group, which owns and operates concepts including Cahoots and Mr Foggs, will begin the reopening of its estate with Mr Fogg’s Residence in Mayfair on Saturday (4 July), as it announced a £25,000 bar tab for NHS workers spread across its sites as part of its relaunch plans. The company will follow up the opening in Mayfair with the reopening of Mrs Fogg’s in the City on Monday, 6 July; Mr Fogg’s House of Botanicals (Fitzrovia – ground floor only) and Cahoots Ticket Hall (Soho) on 9 July; Mr Fogg’s Tavern (Covent Garden) on 16 July; Barts (Chelsea) on 23 July; Mr Fogg’s Gin Parlour (Covent Garden), Mr Fogg’s House of Botanicals (Fitzrovia – in full), Mrs Fogg’s (The City – in full), Cahoots Underground (Soho) and Cahoots Control Room (Soho) on 3 September; and Mr Fogg’s Society of Exploration (Covent Garden) on 1 October. From October onwards the company will also look to reopen Bunga Bunga (Battersea) Bunga Bunga (Covent Garden) and Maggie’s (Chelsea). The company said NHS workers can expect the “warmest of welcomes”, with a £25,000 bar tab spread across its reopened sites as a thank you for their “phenomenal response to the pandemic”. NHS workers will simply show their identification badges at any of the company’s establishments to take part and the tab will be open for them to claim a free drink every day until the sum is reached. Charlie Gilkes (pictured), co-founder of Inception Group, said: “These have been the most challenging times that we, as a business, and the hospitality sector in general, have ever faced. However, no industry has been more critical, or worked harder under immense pressure during this period than our NHS, so we would like to reward their extraordinary efforts.” The company said its reopening plans also include adapting working practices and spaces to create “covid-secure” socialising environments, which will involve the introduction of temperature checks for staff, hand sanitation dispensers at key points throughout the venues, as well as rigorous cleaning routines and a one-way system for entry and exit where possible.
Hawksmoor, the Graphite Capital-backed, steak house concept, has said it plans to have all of its eight eponymous sites reopened by the start of September. The company intends to reopen its site at Borough first on 9 July for weekday dinners and all day at the weekend. The group said its intention was to “learn as much as possible about how to run restaurants brilliantly under the new guidelines and then apply those lessons to the rest of the restaurants, giving each reopening the attention it deserves”. The company plans to reopen its Manchester site on 16 July; Seven Dials on 21 July; Spitalfields on 24 July; Air Street on 28 July; Knightsbridge 31 July; Edinburgh on 6 August; and finally its Guildhall site on 1 September. Since the announcement of its reopening plan, the company subsequently said it was completely booked on day one, 96% booked for week one, and 50% for month one. The company has also expanded its Hawksmoor at Home offer nationwide, giving consumers the opportunity to order a delivery box containing fresh ingredients and a cookbook to “recreate the Hawksmoor experience at home”. The boxes will be limited to 500 per week over the next six weeks via the Hawksmoor website, and the business has said there was scope to expand the range if it proves successful. Co-founder Will Beckett said: “The past few months have been intensely busy working out how to survive this crisis, support our staff and organisations doing incredible work feeding front line workers and people in need in the communities we work in, and thinking about how to reopen all of our restaurants. We could have perhaps done it quicker, but our very clear preference is to focus on doing it as well as possible. We are lucky to have restaurants where social distancing is relatively easy, to have been able to consult with government on the guidance over the past months, and to have the resources to ensure we go above and beyond to ensure we are ‘covid-secure’. We believe customers are likely to want Hawksmoor to do what it has always done and offer people a haven from the outside world, where you can be comfortable with the people you’re eating and drinking with. If we learn differently, we will adapt.”
Revolution Bars Group, the operator of 74 bars trading under the Revolution and ‘Revolución de Cuba brands, has updated on its reopening plans. It comes as more than 99% of shareholders backed the company’s plan to delist from the main stock market and move to AIM as well as place new shares. The company stated it plans to reopen six of its bars on Monday, 6 July and trade these for a minimum period of two weeks “to fully test customer demand and sentiment” and to refine the group’s “covid-secure” operating standards, minimising risk to both staff and customers. The sites are understood to be its Revolución de Cuba outlets in Manchester and Derby and its eponymous venues in Bristol, Brighton, Huddersfield and Liverpool. After that period the group plans to continue reopening in weekly tranches of up to nine bars and hopes by the end of August 62 bars will have reopened. The company stated: “The group’s remaining bars may not reopen until the UK government permits late-night venues to recommence trading.” In a return to work survey, 84% of responders said they intend to come back and are happy to do so subject to the group providing appropriate safety measures; only 0.5% are currently shielding. The company added: “The group expects its net bank debt at 27 June 2020 – the end of its current financial year – to be £22.0m. With £37.5m bank debt facilities now in place (stepping down by £7.5m on 31 March 2021) and £15.0m gross proceeds (£13.8m net of costs) from the successful fund-raising set to be received on 27 July contingent on the group’s admission to AIM, the group has a significant amount of cash liquidity and a strengthened balance sheet to overcome the anticipated challenging trading conditions in the foreseeable future.” Chief executive Rob Pitcher said: “Given the all-day nature of our business, we will proceed cautiously, initially reopening only six of our bars to ensure we can operate safely and viably. We hope the learnings from this first tranche of bar reopenings will enable us to quickly progress the reopening of the remainder of our estate, which we expect to have substantially completed by the end of August.”
Prezzo, the Karen Jones-led chain, will start a phased reopening of its circa 180-strong estate on Saturday (4 July), with a select number of its sites. Propel understands the business, which in April appointed advisors FRP Advisory to consider its post-coronavirus funding options, will reopen eight sites for dine-in initially, including those in Bath, New Brighton, Lincoln and Kings Lynn. A further 12 restaurants, including those in Milton Keynes, Chelmsford and Crawley, will reopen in the following week, as the brand steadily reopens parts of its estate as July progresses. The company has recently reopened a handful of sites for delivery and click-and-collect under a dine@home banner, including restaurants in Bristol and Bournemouth. The appointment of advisors to explore the implications of the covid-19 crisis for its balance sheet, came less than two years after Prezzo underwent a company voluntary arrangement that saw a third of its circa 300 sites close, and a subsequent debt-for-equity swap. It has been suggested the business may have to undergo a further restructuring and it is currently taking to landlords in regards to a possible switch to turnover-based rents.
The Ivy Collection, the Richard Caring-backed group, is to reopen the majority of its regional sites on Saturday (4 July), Propel understands. The company, which has already announced the planned reopening of three of its London-based sites on Saturday, is also planning to open 14 of its regional sites, including those in Bath, Brighton, Guildford, Dublin, Leeds, Manchester, Birmingham and Tunbridge Wells. The 35-strong group will keep shuttered the majority of its London-based sites fort the time being. As previously announced The Ivy Asia, St. Paul’s; and Brasserie of Light, in Oxford Street, will open alongside The Ivy Chelsea Garden, on Saturday. As with the latter sites, the company said while service will still remain a priority, all its restaurants will be implementing the “highest standards of health and safety, ensuring both guests and employees will be dining and working in confidence and in a safe environment”. Measures will include thermal cameras for temperature checks, the use of tracking software for all employees logging daily temperature readings over a seven-day rolling period, and professional deep cleaning and disinfecting on a daily basis. Air filtration units have also been fitted (99% effective in killing the MRSA and H1N1 viruses, which are part of the same RNA coronavirus family) and dedicated members of staff have been appointed to ensure health and safety is at its highest standard on an ongoing basis. Meanwhile, Caprice Holdings has announced it will reopen three restaurants in London on Saturday. Seafood venue Scott’s in Mount Street; Asian-inspired Sexy Fish in Berkeley Square; and Italian-focused Daphne’s in South Kensington will all welcome customers.
Caffe Nero will open 400 stores for eat-in on Saturday (4 July). The stores will open with protocols in place to ensure its employees and customers remain safe and in accordance with government advice and social distancing guidance. The stores will offer an initially reduced food menu. Gerry Ford, founder and group chief executive, said: “We’ve seen high demand since we’ve started opening for takeaway and our teams are excited to welcome customers back properly. We have prioritised protecting the health and well-being of our people and our customers in setting these stores, while also providing safe, friendly community spaces as the country starts to reopen. We have taken clear steps and followed government guidelines to ensure that is the case.” There will be 400 Caffe Nero stores open by Saturday and all of these will be converted to eat-in. The majority of these stores will also be offering delivery through UberEats.
Cafe bar operator Loungers plans to have all of its 167-strong estate reopen by mid-August, Propel has learned. The Nick Collins-led (pictured) group expects to have around 70 sites fully re-opened by 8 July, a further 40 sites by the 22 July, and the remainder open in early to mid-August. The company said some of this is dependent on the timing of restrictions being eased in Wales. It said the split between the reopening of its two concepts – Lounge and Cosy Club – will be “relatively consistent” throughout the re-opening phasing. Collins told Propel: “Now we have had the nod from the government we are very excited about getting back to doing what we do best and looking after our teams and customers. We are adopting a phased approach to re-opening the estate. We have taken this approach because we want to ensure we have sufficient time to thoroughly train our teams, prepare our sites and provide amazing hospitality for our customers in an environment we can demonstrate is safe. We have worked hard to introduce distancing and increased hygiene measures, and to reassure our customers and teams their safety is paramount, whilst at the same time ensuring our unique hospitality and atmosphere is not compromised. The knowledge we have gleaned from having operated a number of the sites for takeaway over the past few weeks has played an important part in preparing for re-opening. Whilst we don’t know exactly how our customers will behave in the early days post-lockdown, we remain positive with regard to our prospects in both brands. We have a flexible, all-day model with broad appeal across all the day parts and a good proportion of the estate benefits from external space. We believe we have an important role to play in the predominantly suburban and market-town communities where we operate, with no exposure to central London and transport hubs.”
The majority of pub operators believe their trading performance over the next 12 months will be at 50% to 75% of the level generated before coronavirus, according to a new survey by property firm Fleurets. The research, which featured 100 operators taking in an estimated 750 sites, found almost 19% were expecting a spike in trade immediately following 4 July, against about 65% who didn’t expect one. Two-fifths expected to return to normal levels of trading only once all restrictions were lifted, with almost 28% saying 2021, about 24% saying 2022, and 3.3% stating never. Almost 48% expected to see an increase in retail price, with about 63% expecting to see an increase in the cost of goods. When it came to possible changes to operators’ trading mix, about 50% expected that to stay the same, almost 30% said it would be more wet-led, and 20% more dry-led. In terms of what government support operators would most like to see introduced/continued, a reduction in VAT came out top (45.5%), followed by business rates relief in 2021 (40%). When asked about views on new site acquisitions, 46.6% were focused on consolidating for 12 months against 44.4% that were keen to grow. Only about 9% were thinking about disposals. Ed Sandall, director at Fleurets, told Propel: “The smaller expanding multi-site operators are key to the pub market dynamic/function and while it is clear the next 12 months will be very challenging, we are delighted a good proportion of the market is keen to grow their estates at the appropriate time. This resonate with our experience, where we are still seeing transactions complete despite lock-down.”
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.
He said: “We are awaiting further information from the government but for those of you that need to pay your teams now, this is how we are treating furlough pay. In the absence of any advice we’re treating this as a normal pay element. It therefore attracts National Insurance payments, pension payments and is subject to holiday accrual.
“If the government changes any element regarding this, we plan to make adjustments in the next pay run to reflect those changes. The government is creating a portal for employers to claim back the furlough pay and aims to have this up and running by the end of April – presumably in time for April’s pay run.
“This will mean organisations need to fund any payments up to this point out of current cash reserves, which will undoubtedly take its toll on some operators. The intention is that organisations use the additional support available to bridge these payments. We will update this advice as we receive more information.”
Hartley said S4labour had also drafted a key worker letter. He added: “Our payroll team has moved to remote working and is working tirelessly to ensure we accurately process the pay for so many of our customers in these difficult times and with the additional pressure of furlough adjustments.
“We are, therefore, grateful the government has afforded them key worker status. As such, we have drafted a key worker letter they can pass on to relevant parties. For a copy of this letter, email Sam@s4labour.co.uk
S4labour is a Propel BeatTheVirus campaign member
Readers can email questions for our experts to firstname.lastname@example.org. Please use BeatTheVirus in the subject line.
Propel has launched The Delivery Conference, which is open for bookings. The ground-breaking event, which takes place at One Moorgate Place, London, on Wednesday, 30 September, will cover all aspects of this fast-growing sector, offering expertise, ideas and insights.
NPD Group foodservice director Dominic Allport will talk about the delivery market’s growth, key developing trends and where the sector goes from here. KAM Media managing director Katy Moses will reveal consumer perceptions of the market and how they use and interact with delivery operators.
Robin Himmels, of Eatclever, will explain how the company has become one of the leading virtual delivery brand operators in Europe and how he sees this part of the market developing. Alasdair Murdoch, chief executive of Burger King UK, will talk to Mark Wingett about early adoption of delivery during his time at Gourmet Burger Kitchen, challenges and opportunities, and how delivery is working for Burger King.
Just Eat UK head of strategic accounts Amy Heather, who leads the company’s relationships with QSR, casual dining and mid-market operators, will discuss major trends Just Eat is seeing, key things it has learned, and how it is using data and insights to help operators improve the delivery experience.
AlixPartners US director Eric Dzwonczyk and UK counterpart Steve Braude will talk about the US delivery market and how it differs with our own. Susan Martindale, group HR director at Mitchells & Butlers, will look at building a delivery strategy for pubs, the company’s use of virtual brands and a possible move into dark kitchens.
Richard Morris, chief executive of Tortilla, will reveal how delivery has forced an evolution of his business for the better. Wagamama’s Andre Johnstone will reveal how the brand has incorporated delivery and click and collect into its model and how it strikes a balance between in-store and digital sales. Deliveroo director of national accounts Matt Ring will talk to Mark Wingett about how the business continues to innovate, its use of data to create virtual brands and the challenges it faces to stay ahead.
Meanwhile, a panel featuring Macro Foods founder Kirsty-Lee Griffiths, Crosstown Doughnuts’ JP Then, Yard Sale Pizza founder Johnnie Tate, and Bababoom founder Eve Bugler will discuss launching, operating and growing in a delivery-focused world.
Propel managing director Paul Charity said: “Given delivery is one of the fastest-growing channels in the sector – and as its importance continues to rise – we are delighted to present this ground-breaking conference, which will allow operators to make the most of the opportunity delivery offers.”
Tickets to the event cost £295 for Propel Premium members, £345 for operators and £395 for suppliers. Email email@example.com
More than 300 readers have now signed up to Propel Premium – while those joining the new-look Propel Premium Club can save money by receiving a pair of free tickets to one of four conferences in 2020.
Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from insights editor Mark Wingett. Subscribers also receive access to our database of multi-site companies, which has grown to 1,500 businesses.
Meanwhile, subscribers to the new-look Propel Premium Club will be able to choose to use a pair of free tickets to one of the following conferences – The Delivery Conference (Tuesday, 21 April), The Finance and Investment Conference (Thursday, 14 May), The Casual Dining Summit (Monday, 12 October) or The New Concept Conference (Monday, 19 October). The normal cost of two tickets to these events is £490 plus VAT for operators and £690 plus VAT for suppliers.
An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email firstname.lastname@example.org
Operators can map their marketing strategy for 2020 through a video collection that features all sessions from the Social Media for Profit Masterclass. The videos reveal how to build sales and brands using social media and are taken from the social media boot camp hosted by Mark McCulloch (pictured), who has more than 20 years’ brand, marketing, digital and social media experience that includes senior positions at Pret A Manger and YO!
McCulloch reveals the hot trends and tips for 2020 and what social media strategists should focus on including channels, content and untapped areas you may be neglecting. He also reveals how businesses can grow their reach by creating a personal brand and using their most senior people to make that brand more human, relevant and accessible.
McCulloch is joined in the video series by Alison Battisby, founder and director of social media consultancy Avocado Social, who has ten years of social media experience and is a Facebook-accredited trainer. She reveals the best way to use Instagram to drive bookings and the do’s and don’ts of working with influencers. She also reveals how to ensure your social media adverts are working successfully.
Meanwhile, Move Digital founder and managing director Geraint John reveals why voice activation is so important, what it can do for your business, where to start and how to build your voice strategy before you launch a new way to reach your customers that will leave your competitors behind. The full video collection is £295 plus VAT.
To order, call Anne Steele on 01444 817691 or email email@example.com
- A pair of free tickets to an event of your choice
- Regular exclusive videos
- Access to the Propel database of 1,600 multi-site companies, updated twice a year
- Read Propel insight editor Mark Wingett’s weekly analysis column and City
- Diary Discounts to attend other events
- Plus insight from leading sector commentators from the UK and internationally
Propel coronavirus crisis interviews
Elton Mouna, managing director of Remarkable Pubs, interviewed by Ann Elliott
CLICK HERE to view
The Propel Insights Series:
Lease Restructuring Webinar
Hosted by Mark Wingett
CLICK HERE to view
The Supplier Perspective
Prask Sutton, founder and chief executive of Wi5, interviewed by Mark Wingett
CLICK HERE to view