Propel Newsletter Archive Page

Bosses of more than 230 sector companies warn of further closures without business rates freeze: The bosses of more than 230 hospitality companies have warned the government that pubs and restaurants will shut without a tax freeze. Companies including Burger King, Fuller’s, Greene King and Mitchells & Butlers have signed a letter to chancellor Jeremy Hunt warning that businesses will close their doors for good if the government does not call off a planned rise in business rates next year. Chef Tom Kerridge , who is among the signatories to the letter ahead of the autumn statement next week, told The Telegraph: “The hospitality industry has taken a battering in recent years. The stark reality for many businesses is that with rising costs and ongoing challenges, time is running out and without further support from the government they will shut their doors.” Retail and hospitality businesses were given up to 75% rate relief in 2022 to help with inflation. However, that is set to expire next April. At the same time, business rates are expected to go up in line with September’s rate of inflation next year. UKHospitality has previously said the sector faces a rise of almost £1bn if rates rise as planned. The trade body has warned that the sector will struggle to cope at a time when inflation means businesses are under immense pressure. It added the cost of everything from wages to energy and ingredients has soared, while visits to pubs and restaurants have declined as families manage tight budgets. A total of 383 pubs closed in the first half of 2023, according to advisory firm Altus, compared with 386 that closed over the entire of 2022. The letter to Hunt warns: “Without action, we will see continued venue closures, job losses and cancelled investment that will harm our high streets and communities in every part of the country.” Simon Emeny, chief executive of Fuller’s, told The Telegraph last month that the rate of closures would be “multiplied tenfold” without an extension to rate relief. Kerridge has previously said there is little money in the hospitality industry and called for the government to create a minister for hospitality. He told The Times in September: “Believe me, if there was a lot of money in hospitality you wouldn’t have 8,000 closures this year.”

Next edition of Propel’s Turnover & Profits Blue Book to be released today: The next edition of Propel’s Turnover & Profits Blue Book will be sent to Premium subscribers today (Friday, 10 November), at midday. It now features 789 companies that are turning over a total of £56.9bn. A total of 536 companies are making a profit while 253 are making a loss. The profit being made by sector companies is now outstripping losses by £1.82bn. The Blue Book shows the total profit of the 789 companies in the list is £3,754,189,462 and losses are £1,935,831,027. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Meanwhile, for the first time, Propel group editor Mark Wingett has chosen the best videos from the Propel conferences in 2023, picking out a selection of talks and interviews that resonated with delegates from across the breadth of the hospitality sector. The 12 videos will be made available to Propel’s Premium subscribers at 9am on Friday, 24 November. Premium subscribers also receive access to five other databases: the Multi-Site Database, which is produced in association with Virgate; the New Openings Database; the UK Food and Beverage Franchisor Database; the Who’s Who of UK Food and 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 kai.kirkman@propelinfo.com to upgrade your subscription. Premium subscribers are also being given exclusive access to the recording and slides to Propel Multi-Club Conferences. They also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Mark Wingett.

Diageo warns of slower growth: Diageo has warned it now expects to see slower growth in the second half of its financial year. The company stated: “We have momentum continuing in four of our five regions, however at the group level, in the first half of FY24, we now expect to see slower growth than the second half of FY23. This is due to a materially weaker performance outlook in Latin America and Caribbean (LAC), which is nearly 11% of Diageo’s net sales value (FY23), and is now expected to decline organic net sales by more than 20%, year-on-year, in the first half of FY23. Currently, in North America, we expect gradual improvement in organic net sales growth in the first half of FY24 compared with the second half of FY23, while maintaining distributor inventory in line with historical levels. We also expect to see improvement in the rate of net sales growth in Africa in the first half of FY24 compared with the second half of FY23. In Europe and Asia Pacific, we see continued momentum, albeit slower than in the second half of FY23. In Europe, growth continues to be strong despite geopolitical tensions escalating in the Middle East, where we are a leading spirits company. In Asia Pacific, we continue to see momentum with good growth, despite slower than expected recovery in China. LAC is lapping very strong 20% organic net sales growth, versus the first half of FY23. Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading. These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment. Despite slowing category growth, our business continues to win share in most markets, within the categories we participate in. We now expect organic operating profit growth for the first half of FY24 to decline compared to the first half of FY23, primarily due to LAC’s declining net sales, increased trade investment, lower operating leverage and adverse mix resulting from downtrading. Looking ahead to the second half of FY24, at the group level, we expect to see a gradual improvement in organic net sales and organic operating profit growth from the first half of FY24 while we continue to invest in marketing, and in the business, to drive long-term sustainable growth.”