Propel Newsletter Archive Page

Prezzo returns to FY profit after restructure, says future outlook of the business is positive: Prezzo, the Cain International-backed Italian dining group, has said that it returned to profitability in 2023, after the completion of its restructuring plans. The Dean Challenger-led business posted pre-tax profit for the year to 31 December 2023 of £5,484,000 against a loss of £31,558,000 the previous year. Revenue stood at £110,375,000 versus £134,696,000 in 2022, after the group’s restructuring saw it close 46 unprofitable sites and significantly reducing central overhead costs in April 2023. Adjusted Ebitda profit for the period was £2.2m (2022: loss of £5.0m). The company said that the restructuring plan contributed a further £4.7m of trading benefit in the year. As a result, the Adjusted Ebitda including the restructuring benefit in 2023 was £6.9m (2022: Adjusted Ebitda loss of £4.8m). The company, which now operates 95 sites, said: “With the restaurant estate and central overhead restructure successfully completed during 2023, the underlying supply issues of labour and inflation easing, a new executive team in place and locked-in deflationary benefits in utilities for 2024 and 2025 the future outlook of the business is positive. The business will continue to develop and invest in our menu to ensure we maintain our quality and premium position in the marketplace and the business will commence a programme of investment in the estate over the course of the next three years to ensure our restaurant environment is as premium an experience as our menu. There are a number of strategic opportunities that the business is actively working on to drive sustainable future growth, including for example the introduction of breakfast and a new retail range.” Earlier this year, the company launched said breakfast offer in just under a third of its estate following a successful trial in the brand’s King’s Cross site. The offer, which is generally available from 9am to midday, was rolled out to 25 further sites across the UK. During 2023, the business said it completed a number of smaller, improvement projects across the estate. The business intends to invest in a number of refurbishments in 2024 with plans to complete more of these in 2025 and 2026. During the period we conducted an all-employee survey and people focus groups to understand the benefits that are most important to its teams. The company said: “This has helped develop our five-year benefits strategy where we are committed to saving to invest and bringing to life new benefits for our teams. We launched our on-line benefits platform in November 2023, ‘Prezzo Perks’ to serve as a one-stop shop for employees to view their Total Reward Statement and all they receive as part of their role at Prezzo. With the support of some new partners, we introduced four new benefits to the team in line with their requests and have more benefits to launch in 2024. In 2023, employee turnover in our restaurants improved year-on-year by 17 percentage points and in our support centre by 11 percentage points.”

Premium Club members to receive next Multi-Site Database featuring 3,232 operators and 44 new companies on Friday: Premium Club members are to receive the updated Multi-Site Database on Friday (30 August). The next Propel Multi-Site Database, produced in association with Virgate, provides details of 3,232 multi-site operators and is now searchable in seven main segments. The database features 953 (29%) operators from the casual dining sector, 780 (24%) pub and bar operators, 540 (17%) cafe bakery operators, 441 (14%) quick service restaurant operators, 265 (8%) hotel operators, 205 (6%) experiential leisure operators and 55 (2%) fine dining operators. The database is updated each month and this edition includes 44 new companies. New additions to the casual dining sector include Etci Mehmet, the Turkish steakhouse concept; plant-based concept Tofu Vegan; and Indico, the Indian small plates concept with a new opening in Solihull. Premium Club members also receive access to five additional databases: the New Openings Database, the 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 Hospitality. All Premium Clubs members will be offered a 20% discount on tickets to Propel paid-for events including the Talent and Training Conference (1 October), Restaurant Marketer and Innovator (two days in January 2025) and Excellence in Pub Retail (May 2025). Operators that are Premium Club members are also able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or supplier. Email kai.kirkman@propelinfo.com today to sign up.

Heineken’s biggest-ever price rises fail to stop slash in UK profit: Heineken’s biggest-ever price rises in the UK failed to stop its profit being slashed during its latest financial year as it battled “economic volatility”. City AM reports that the Edinburgh-based division raised its prices in 2023 as it faced “significant inflationary pressure on input costs”, reducing consumer spending, higher labour costs and rising energy bills. According to newly-filed results, Heineken UK’s pre-tax profit was cut from £165m to £106m in 2023 while its revenue increased from £2.3bn to £2.4bn. The division also makes and sells brands such as Birra Moretti, Desperados, Foster’s, Amstel, Inch’s, Old Mout and Strongbow as well as Beavertown. At the end of 2023, Heineken’s Star Pubs estate totalled 2,382 locations, down from 2,394. A statement signed off by the board said: “Economic volatility continued into 2023 leading to significant inflationary pressure on input costs. Reduced consumer spending and increased labour costs, as well as high energy bills affecting production and UK retail, continue to provide headwinds. To protest margins the group delivered its largest-ever price increases to date, contributing to the off-trade share decline. The group also increased focus on managing our cost base to drive productivity efficiencies and deliver cost savings across the business.” Earlier this year, the wider Heineken group reported a revenue of €36.3bn for 2023, up 4.9% on 2022. However, its operating profit fell by 24.6% to €3.2bn over the same period. For the first half of 2024, the group posted a revenue of €17.8bn, up 2.2%, but its operating profit fell by 4.3% to €1.5bn.

Cost of fish and chips rising faster than any other UK takeaway: Fish and chips is a British culinary staple and has long been an affordable indulgence up and down the country, but the traditional chippy dinner has been revealed to be the takeaway that is increasing in price the quickest, according to official data. The Telegraph reports that the average cost for a cod and chips around the UK is almost £10, up more than 50% in five years. Inflation and soaring costs of potatoes and fish brought about by climate change and the war in Ukraine are partially to blame for the meal costing £9.88 in July 2024, the most recent available data, compared to £6.48 in July 2019. Figures gathered by the Office for National Statistics show restaurant and takeaway meals have increased in price across the board. Other takeaway favourites to soar in price are the kebab, which is up 44% to £7.57, chicken and chips, up 42% to £6.70, and pizza, up 30% to £10.48. Chinese and Indian takeaways are also up by 29% each, with a main costing an average of £7.14 and £9.71 respectively. The rise in prices spiked in 2022 after the cost of living crisis caused energy costs to rocket, while a 35% tariff on Russian seafood imports was implemented in March after the country invaded Ukraine, driving up the cost of importing fish. The price of chips has also soared because potato farmers are finding it harder to make good yields on maris pipers and other native varieties after several years of bad weather and disease.

Higher wages take toll on SME owners: Surging employment costs have hurt morale among the UK’s smallest businesses, research shows. The Times reports that The Federation of Small Businesses (FSB) said confidence among small business owners fell back into negative territory in the second quarter of the year, largely due to higher wages. The FSB said soaring employment costs were taking their toll on small business owners. They were the most commonly cited cause driving overall cost increases compared with a year ago, hitting a record. Other growth barriers included weaker consumer demand and tax pressures. Tina McKenzie, policy chair at the FSB, warned that small businesses were “looking with trepidation at the government’s forthcoming plans to change employment, which could both increase risk around small businesses employing people, and the costs when they do.” Labour is planning an overhaul of workers’ rights, which could increase expenses for employers. The headline confidence reading in the FSB’s small business index, which polled more than 1,000 companies, fell to -10.8 in the three months to the end of June, down 16.3 points from the previous quarter. McKenzie said another increase in labour costs risked holding back economic growth, “and points to the possibility of a contraction in small business job numbers, which would be terrible news for firms, for staff, for local communities and the national economy”. Accommodation and food services businesses saw their score slip from -11.8 points to -15.9 in the most recent survey, while manufacturing companies went from a positive 19.2 points in the first quarter – the most positive main sector in that report – to -12.7 points in the second quarter.