Propel Newsletter Archive Page

Comptoir Group – Trading continues to be impacted by significant events outside of our direct control: Comptoir Group, the Comptoir Libanais and Shawa operator, saw its profit decline in the six months to 2 July 2023, as it said its trading continued to be impacted by “significant events outside of our direct control” such as the ongoing public transport industrial action. The business, which owns and operates 26 Lebanese restaurants, six of which are franchised, based predominately in the UK, reported total revenue for the half-year was £14.8m (H1 2022 £14.5m) and adjusted Ebitda profit was £1.0m (H1 2022 £3.8m). Like-for-like sales stood at 6% (VAT adjusted) with like-for-like dine in sales growing by 8.1% (VAT adjusted). It said that conversely, in line with the rest of the industry, it had seen delivery sales decline post the growth seen during the years disrupted by covid. The company said that franchise system sales grew 150.5% (+14.9% like for like) in the six-month period with new sites opening in 2022 performing “extremely well”. It said that its sites in Stansted Airport was in particular benefiting from the growth in travel. The group said its controls remained strong, but profit declined due to the impact of VAT and business rates returning to previous levels, as well as the utility, food and wage inflation. The impact of the VAT movement back to 20% was £388k in comparison to 2022. The IFRS loss after tax was £0.78m (H1 2019: £0.9m profit). Beatrice Lafon, non-executive chair, said: “We are pleased with our first half results, delivering growth in total like-for-like sales (VAT adjusted) of 6.0% as we continue the transformation programme we started at the end of 2022. Total dine-in like-for-like sales (VAT adjusted) were up 8.1%. Against this backdrop, the group is navigating a challenging trading environment, with the macroeconomic pressures of the continuing cost of living crisis, high inflation and the removal of government support with business rates and VAT resulting in a decrease in profit. Utilities costs will significantly decline from Q4 and other inflationary sensitive costs like ingredients and labour have now started to plateau. The net effect will bring improved performance towards the end of this year. Trading continues to be impacted by significant events outside of our direct control such as the ongoing public transport industrial action which now enters a second year. We have also had a relatively poor summer in terms of terrace weather. Both of these issues have adversely impacted our sites, despite the welcome relief that a warm start to September and the completion of our terraces’ refurbishment has so far brought to footfall. Significant progress has been made in the first six months of the year for those aspects that we can control: new menus have been implemented across all our brands, particularly in Comptoir Libanais; the changes are the most expansive seen in several years and have been well received by customers. We have rebuilt our restaurants’ teams and a new Hospitality Training Programme is underway in all locations. Having announced the opening of our first new owned site in over four years in Ealing later this year, we will continue our growth plans into 2024 as we are close to securing a new flagship Comptoir Libanais. We also continue to grow our franchise business first with our existing partner HMS Host and the opening of the first franchised Shawa in Abu Dhabi but also with a new additional partner which will see us open in Milan airport in 2024. Furthermore, a new digital experience will be offered to our guests in early 2024, our first web revamp in eight years. Comptoir Group remains in a strong financial position to take advantage of future opportunities and to continue to innovate. Whilst we remain cautious about the immediate future as macro challenges continue to prevail, we are optimistic about the longer-term prospects for the business.” During the period the business closed one site (Comptoir Leeds). It said it does not envisage any further closures across the group this year.

Fast-growing pizza companies among 56 new businesses joining updated Premium Database of Multi-Site Companies: Fast-growing pizza companies are among the 56 new multi-site companies being added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday, 29 September, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features pizza concept Boss Pizza, which started as a lockdown project by Ajmal Mushtaq. It quickly grew to three sites in Scotland and has now expanded to England. Also featured is Tops Pizza, which has 70 sites and has recently added a new Brighton outlet, plus Pizza GoGo, which has 133 sites, predominantly in the south east of England. 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, 29 September at 9am. Premium subscribers also receive access to five other databases: the New Openings Database; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; the UK Food and Beverage Franchisee Database; and the Who's Who of UK Food and Beverage. 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 jo.charity@propelinfo.com 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.

Asahi CEO warns climate change could lead to beer shortages: Asahi’s chief executive has warned that climate change could lead to beer shortages as warmer temperatures hit barley and hops supplies around the world. The FT reports that Atsushi Katsuki, who has headed the Japanese brewer since 2021, said analysis conducted by the company found that global warming was set to reduce barley yields and the quality of hops significantly over the next three decades, and warned of a beer shortage. France’s spring barley harvest could decrease 18% by 2050 under the UN’s 4-degree scenario, the most severe, while Poland’s harvest would shrink 15%. The quality of hops, a key component for the preservation as well as the flavour of beer, would decline 25% in the Czech Republic, one of the world’s largest hop producers. Under a scenario of below 2 degrees, the French harvest is forecast by Asahi to decline 10%, that in Poland by 9% and the quality of hops in the Czech Republic by 13%. The world is headed for a temperature rise of up to 2.6C, the first comprehensive UN stock take of global efforts to limit warming recently concluded. “Although with hotter weather the consumption of beer may grow and become an opportunity for us, climate change will have a serious impact,” Katsuki told the FT. “There is a risk that we may not be able to produce enough beer.” Volatile weather has already interfered with barley yields in recent years, leading to European malt and malting barley prices hitting record levels in 2022, putting pressure on brewers. Although prices have moderated, the cost of 2023’s crop this summer was about €100 above earlier averages. Climate change has had a bigger impact on the price of barley than even Russia’s invasion of Ukraine, said Katsuki. “That is why we’re not just taking our own actions but we also need to push harder, working with other members of the industry and the society at large…we have to all work together to mitigate the climate change risks,” he added. Asahi, which counts Asahi Super Dry, Peroni Nastro Azzurro and Pilsner Urquell among its stable of beers, has partnered with Microsoft and an agritech company to start tracking harvest volume and quality on farms.

Consumer confidence rises to 20-month high: Improving optimism about the economy has raised consumer confidence to its highest since January last year. The Times reports a survey by GfK, a market research company that has tracked sentiment in the UK since the 1970s, showed that its consumer confidence index rose four points this month to a net minus 21. It is the latest data to suggest that the economy is beginning to recover. The Office for National Statistics said this week that inflation fell last month from 6.8% to 6.7%, confounding forecasts of a rise to 7%. The surprise fall in inflation helped convince the Bank of England to hold interest rates at 5.25%, the first pause in monetary policy tightening since November 2021, after 14 straight rate rises. GfK’s survey of 2,001 individuals was carried out before the rate decision or the statistics office published its inflation estimates, suggesting that the index’s next instalment will also improve. The statistics office said this month, in a retrospective GDP upgrade, that the economy had rebounded to its pre-pandemic size by the end of 2021. It had been thought that GDP was about 0.2% smaller compared with pre-covid levels, but after the upgrade it is about 1.5% bigger. Joe Staton, client strategy director at GfK, said: “The view on our personal financial situation for the past year and the next is registering marginal but welcome growth, while expectations for the UK’s wider economy in the coming year show a more robust six-point increase.” Confidence in future personal finances over the next year rose one point to minus two. The major purchase index, a barometer for demand for items such as cars and homes, climbed four points to minus 20.

Diageo names new boss for America: Diageo wasted no time in kicking off its next succession process yesterday by appointing one of Fortune’s “most powerful women to watch” to the role of chief executive for North America. The Times reports that Sally Grimes, formerly chief executive of Clif Bar & Company, a US organic energy-bar maker, joins less than four months after the sudden death of Sir Ivan Menezes, Diageo’s group chief executive for the previous decade. His death, at the age of 63, came a few weeks before his planned retirement. Diageo had anointed Debra Crew, chief operating officer, as chief executive in waiting. Crew and Menezes both ran Diageo’s North American operations before being elevated to the top job. Although Crew has only just taken on the chief executive role, analysts said Grimes, was being given the chance to prove she has what it takes to eventually follow in Crew’s footsteps at Diageo, whose brands include Johnnie Walker and Guinness. Grimes’s CV includes senior roles with Tyson Foods, Kraft Foods and Newell Brands. At Clif Bar she led a ten-year strategic growth plan, ultimately completing the sale of the company to Mondelez International, the snacks group, last year. Grimes, who made the Fortune list in 2019 after being recognised as one of Fast Company’s top 100 most creative people in business seven years earlier, will report to Crew and will join the Diageo executive committee. She has been a non-executive director at companies including Beyond Meat and Silver Oak Winery. Claudia Schubert, who was appointed president for Diageo North America almost a year ago, has been promoted to the new role of president and chief operating officer for North America, reporting to Grimes.