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Fri 23rd Sep 2022 - Update: Hospitality hit as consumers cut back, consumer confidence falls, cask ale, Creams, Mollies |
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Hospitality hit as consumers cut back: More than a quarter of businesses reported a fall in revenues last month, with restaurants, pubs and bars in particular struggling as hard-up consumers tightened their purse strings. The Times reports data from the Office for National Statistics showed that in August 26% of companies reported lower turnover than the previous month, while only 15% saw a rise in sales. Businesses operating in the accommodation and food service sectors were hit the worst, the statistics body found, with almost half posting a month-on-month slide in revenues. Looking ahead, a fifth of businesses predicted a dip in sales in October, with pubs and restaurants especially gloomy about the outlook once again. Confidence among consumers was sapped over the summer and fell to a new low this month. Households are having to deal with inflation rising at its fastest pace since the 1980s, and the Bank of England thinks the economy is probably already in recession. People are also cutting back on their expenditure in anticipation of a steep increase in energy bills over the coming winter, while mortgage repayments are climbing sharply. The Bank expects that inflation will peak next month and almost a third of the businesses surveyed by the ONS said that they would likely put up their prices in October. The rising price of energy was the most commonly given reason for doing so. Yet there are early signs that cost pressures on businesses are starting to ease slightly. In July, 46% of respondents said that their suppliers had increased prices that month, but the figure dipped to 44% in August. Within that group, two thirds of companies in the accommodation and food services industries reported that their costs of doing business had increased last month, the highest proportion of any sector.
Fourth UK Food and Beverage Franchisor Database released today: Several dessert and sweet treat concepts are among the 15 new franchisors expanding in the UK and abroad featured in the fourth UK Food and Beverage Franchisor Database, which will be sent to Premium subscribers today (Friday, 23 September), at midday. The fourth edition will feature 155 companies and almost 70,000 words of content, providing insight on the offer, locations, cost and other key details. Among them is Nugelato, an 11-strong Northern Ireland-based ice cream boutique company founded in Newcastle, County Down, in 2015 by Michael Nugent Jnr. Also featured is Delightful Desserts, a dessert franchise founded in 2015 by husband-and-wife team Baz and Sunny Koone which currently has 17 sites. Scooperb, an ice cream/dessert lounge concept founded in 2017 in Rayners Lane, north west London, by Deepali Prabhu, which opened its fourth site and first franchise this summer, is also featured. Premium subscribers also receive access to The New Openings Database; the Propel Multi-Site Database, produced in association with Virgate; and the Turnover & Profits Blue Book, produced in association with Mapal Group. Premium subscribers will also be given exclusive access to the recording of the Propel Multi-Club summer conference today, at 9am. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. They also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
Pubs ditch cask ale for kegs of fizzy craft beer as landlords fear downturn in visits: Cask ales are becoming rarer at Britain’s pubs as the cost-of-living crisis prompts landlords to opt for longer-lasting kegs of craft beer, lager and ciders instead, a leading brewer has claimed. The Telegraph reports that Adnams said demand for cask beer was proving “subdued”, amid fears that drinkers could stay at home this winter and leave thousands of pints to go to waste. Pubs and bars are choosing to stock more keg beer because it is a “lower risk alternative to cask whilst footfall remains uncertain”, Adnams said. Once a cask of ale is tapped, all its contents must be pulled within three days to remain fresh. Landlords fear that would-be pints will go to waste this winter as cost-of-living pressures mean customers make fewer visits to the pub or cut back on how much they drink. Tom Stainer, chief executive of the Campaign for Real Ale (CAMRA) said it was “understandable that with the huge pressures pubs are facing, they may look to stock different products”. Stainer called for urgent action from the government to prevent cask ales disappearing from inns. “CAMRA is urging the government to urgently bring forward the promised changes to the way alcohol is taxed by cutting duty on draught beer and cider served in pubs to give pubs the confidence to give their customers what they want – fresh cask beer from local and independent brewers,” he said. Kate Nicholls, chief executive of UKHospitality, said businesses were taking a closer look at supplies and turning to products that could be stored for longer. “What we’re seeing is companies not buying a lot of stock in advance because they don’t want to be tying up lots of cash in stock, particularly going into the winter period, but they are also looking at selling dates for stock,” she said. Pubs, restaurants and other hospitality businesses have now faced two winters where they were forced to throw away supplies as a result of drop-offs in footfall during the pandemic. Nicholls said: “Businesses have had that particular problem over the last two winters and they don’t want to be wasting stock, again, whether that’s because of a downturn in footfall because of discretionary spending and cost of living pressures, or whether that is also going into the flu season.”
Cost of living squeeze sends consumer confidence to new low: Confidence among British consumers has fallen to another record low, with British households said to be “buckling under the pressure” of the ongoing cost of living squeeze. The Times reports the closely watched monthly survey of sentiment, compiled by GfK, fell a further five points this month to -49, the fourth time in the past five months that it has hit a fresh low. Britons are now more pessimistic about the economic outlook than at any time since records began in 1974. Even during the peak of the financial crash in the summer of 2008, confidence only fell as low as -39. “Consumers are buckling under the pressure of the UK’s growing cost of living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments,” Joe Staton, client strategy director at GfK, said. In an attempt to curb inflation, the Bank of England raised interest rates once again yesterday, which will make mortgages and other loans more expensive for millions of people. The average monthly mortgage payment for a first-time buyer is 37%, or £300, higher than at the start of the year, according to data provided by Rightmove. The GfK data was based on an online survey of 2,000 people aged 16 and over polled between September 1 and 14. It added that there were no significant differences in responses before and after the death of the Queen. In its report, GfK found that there remained “deep concerns” among consumers about both their personal finances and the state of the economy. The responses to forward-looking questions were “especially worrying”, Staton said. The reading for how consumers expect their own finances to fare over the next year fell another nine points to -40, while the reading for the outlook of the wider economy dropped eight points to -68. Staton said that the public now looked to Liz Truss and her government for help. “[Consumers] are asking themselves when and how the situation will improve. The mini-budget, and the longer-term agenda to drive the economy and help rebalance household finances, will be the first major opportunity to deliver that improvement. It will also be a major test for the popularity of Liz Truss’s government.”
Creams launches emergency franchise partner support package: Dessert parlour operator Creams has launched an emergency franchise partner support package to help and guide its partners through inflationary pressures, the cost-of-living crisis and other ongoing economic and societal challenges. The company said that to help safeguard the future of each of its 100-plus sites across the UK, the package has been devised including financial incentives such as a reduction on royalty fees from October 2022 until February 2023. The business is planning to open a further ten new sites by the end of the calendar year and new franchisees, plus those looking to open subsequent restaurants, will be supported by the new package. A refurbishment scheme will ensure restaurants are as energy efficient and sustainable as possible whilst “attracting both new and returning customers through a modern and refreshed design”. In addition to the above, the support package will include general support and advice on managing labour efficiency; information on how to effectively engage with landlords for rent-reduction discussions; and tips on how to maximise energy efficiency across the business. Creams has also appointed a third-party company to advise on business rates revaluation and will host a series of regional forums for partners to have face-to-face time with and support from the senior team. Othman Shoukat, managing director of Creams said: “Supporting our franchise partners is a key priority for us and we hope this package will help them as they navigate this challenging climate. We formalised it prior to any government announcement as our aim is always to proactively support our franchise partners. We took a similar proactive approach during covid-19 with our dedicated Taskforce and came out the other side significantly stronger than pre-pandemic levels with average store sales in 2021 approximately 20% higher compared to pre-pandemic 2019. I am confident that with this comprehensive support package, we will maintain good momentum and replicate this success despite the difficult environment.”
Mollie’s appoints Kate Brooke-Green as head of food: Mollie’s, the motel concept designed by Soho House – with locations in Oxfordshire and Bristol, has appointed Kate Brooke-Green as its new head of food. The company said that this latest talented hire underpins the groups ambitious expansion plans to roll-out a number of sought-after locations in the UK. Having worked in food development for upwards of 11 years, Brooke-Green moves to Mollie’s from Mustard Foods, a leading food development and manufacturer. Here she worked as head of food innovation, working alongside culinary directors and other senior operational heads for large restaurants and food groups, such as Caprice Holdings, Coppa Club and Leon to name a few. She will also head up people development for an 80-strong foodservice team, spanning all properties as Mollie’s continues to expand, with its first city centre concept opening in Manchester in 2023, which will boast a number of F&B outlets. For Mollie’s Manchester, which will launch in Q2 of 2023 in the iconic former Granada TV Studios on Quay Street, the company said Brooke-Green will look to develop premium menu concepts to suit the character of the retro-inspired property, as well as guiding and developing the new team. These actions will span multiple on-site F&B outlets including a 164-cover Diner, a lounge bar, a shared workspace, private event catering and a grab & go offering. Darren Sweetland, managing director of Mollie’s, said: “I am thrilled to welcome Kate into our team. Kate brings more than a decade of experience and real passion and creativity to our business as we continue to build on our momentum and work together to deliver the next stage of our growth. Exciting times ahead for Mollie’s.”
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