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Fri 13th Dec 2024 - Update: Itsu warns over labour cost, new Chapel Down CEO, takeways ban, Coffi Lab investment |
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Julian Metcalfe – In ten years, we’ll have 500 Itsus, warns Labour is making it too expensive to hire staff: Julian Metcalfe, founder of Itsu, the healthy Asian food brand, has warned the government that it is making it too expensive to hire staff. He told the Daily Mail: “The only good thing I can say about what the government is doing to us is that we’re all in the same boat. When they screw some of us with their weird policies, they screw all of us.” He gestures at a bank of screens in the corner, where commuters and shoppers tap in their dumpling and sushi orders. “The screens are there because we were so scared of the government continuously raising [employment] taxes,” he said. “Very soon we’ll be paying staff £16 an hour, I should think. That’s a good thing for our staff. But we want our food to be affordable – so where you can have a machine to take orders, you have to do it. We have three Japanese robots in every Itsu kitchen, making nguri, folding maki and pressing rice. One robot can do the job of three people. They cost £100,000, but they don’t go on holiday and they don’t work from home. In ten years, we’ll have 500 Itsus, one day: thousands. We’ll take sushi to Japan and China, with the right partner. We need more long-term thinking in this country, like Bournville had with its chocolate. Business is very short term now – we need to reverse that.” Metcalfe believes government policy lacks this foresight. “Rates are more than rent in many places now, it’s criminal. Rates are mind-bogglingly expensive,” he said hitting “tiny businesses all over the country”. “Then there’s the cost of part-time employees.” The hospitality sector has warned of a 73% rise in the tax bill for employing a part-time worker after the government cut National Insurance thresholds. Metcalfe said: “That hurts many dads and mums who are looking after children and can only work 20 hours a week. They will cost employers nearly double. So what’s going to happen? You can’t employ them. Just so many stupid decisions.” Metcalfe has more certainty about Itsu “definitely” overtaking Pret, which has circa 700 sites, as his most famous legacy, especially internationally. Itsu’s only international stores are in France and Belgium, with one opening in the Netherlands imminently.
Premium Club members to receive next Turnover & Profits Blue Book today featuring 1,039 companies: Premium Club members will receive the next Turnover & Profits Blue Book today (Friday, 13 December), at 12pm. The database will feature 65 updated accounts and 30 new companies, taking the total to 1,039. A total of 650 companies are making a profit while 389 are making a loss. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Premium Club members also receive access to five other databases: the Multi-Site Database, the New Openings Database, 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 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.
New takeaways close to schools face council ban: The government has given councils powers to ban takeaways from opening near schools after a Times investigation revealed that local authorities’ attempts to do so were being thwarted by challenges made by the fast-food giant KFC. Labour’s National Planning Policy Framework, issued yesterday, instructs councils on what to consider when reviewing planning applications. It places far stronger restrictions on where new takeaways can open. Before, the rules said councils were required only to “enable and support healthy lifestyles”, a statement open to wide interpretation. They must now “prioritise preventing ill health”. Local planning authorities have been told to refuse applications for new fast-food outlets “within walking distance of schools”, unless the location is in a designated town centre. Permission must also be denied if evidence shows a concentration of takeaways “is having an adverse impact on local health”. The Times revealed last year that KFC had challenged plans by 43 councils to restrict the number of takeaways near schools since 2017. In more than half of these cases, the fast-food giant has succeeded and town hall bosses abandoned their plans or significantly watered them down. Strengthening national guidance will mean that the authorities affected by these challenges can introduce the child obesity policies that KFC had opposed. Andrew Gwynne, minister for public health, said: “Every child deserves a healthy, happy start to life. Giving local authorities the powers to block applications for unhealthy takeaways near schools puts children’s health first and stops fast-food giants targeting pupils.” Katharine Jenner, director of the Obesity Health Alliance, said: “The government and the chief medical officer for England have recognised that the food environment entrenches inequalities and promotes obesity, instead of promoting good health. This must change. We know that not all children are equally at risk – fast-food outlets are disproportionately clustered in the most deprived parts of the country, where children are twice as likely to develop obesity by the time they leave primary school.”
Chapel Down hires James Pennefather as new chief executive: Britain’s biggest winemaker Chapel Down, which in September abandoned a planned sale after warning over a poor harvest and declining sales, has hired James Pennefather as its new chief executive. In August, the company’s current chief executive, Andrew Carter, said he would step down ahead of taking up a new role leading Yorkshire brewer and retailer Timothy Taylor in 2025. Pennefather, who will take up his new role on 1 February 2025, has worked in the premium drinks industry for over 25 years and was most recently chief executive of The Lakes Distillery Company PLC, where he led the business’s successful sale to The Nyetimber Group earlier this year. Prior to that, he held a number of senior leadership roles at William Grant & Sons and Diageo across the UK, Middle East, Africa and India. Martin Glenn, chairman of Chapel Down Group, said: “We are delighted to have appointed James, who is an outstanding business leader with deep experience in building premium drinks brands within emerging categories, developing strong customer relationships in the UK and globally and enhancing shareholder value. Chapel Down has made excellent progress as a business and a brand, and James is well placed to continue Chapel Down’s development and growth.” Pennefather said: “I am excited to be joining Chapel Down at such an important time in the company’s growth story. Chapel Down is the leading English winemaker and I look forward to leading the business as it pursues the next stage of transformational growth for customers and shareholders. Andrew leaves a strong legacy and I will be working closely with him and the Chapel Down management team to ensure a seamless transition.” Chapel Down also announced that it had accepted the resignation of Rob Smith as chief financial officer and director. The recruitment for his successor will commence shortly, led by Glenn and Pennefather. Following three years of service as a non-executive director of Chapel Down, Stewart Gilliland has also resigned his position on the board. The company said: “The Chapel Down board has great confidence in the continued growth of the English wine region and Chapel Down’s continued leadership within the industry, underpinned by the quality of its traditional method Sparkling English wines. Chapel Down continues to build on its strong brand leadership position, supported by its 1,024 acres of high-quality vineyards, the industry’s broadest UK distribution and a growing international opportunity. The company confirms that the 2024 Harvest has been successfully completed and is in line with previously announced tonnage and with an excellent vintage quality. The company further confirms that trading in the important final quarter of the year has been strong. The company’s full year position remains in line with management expectations, with the business carrying positive momentum into the new calendar year. A trading statement will be issued in the second half of January in accordance with the company’s normal practice.”
Coffi Lab secures new investment for further growth: Coffi Lab, the dog-friendly coffee shop concept that was launched in 2021 by Coffee#1 founder James Shapland, is set to grow further following a £1.7m investment from the Development Bank of Wales. Coffi Lab currently has five coffee shops in Cardiff and the surrounding areas, two in Monmouthshire and two in England, with a third opening in Bristol, in Gloucester Road, in January. The business now plans to open a number of new Labs in south Wales and the south-west of England, backed with the new investment. The expansion plans are due to create 40 new jobs over the next 12 to 18 months. Shapland said: “When I started Coffi Lab it began with an introspection of what mattered to me. Inspired by my beautiful Fox Red Labrador Dylan, I wanted to create a space where we could welcome dogs with open arms. Beautiful, open venues; a focal point of leafy neighbourhoods where family and friends could come together without having to leave their canine companions at home. We focus on exceptional coffee, warm hospitality and quality food led by taste and provenance. We have invested heavily in our infrastructure to aid smooth and efficient growth. Last year we opened our Coff Lab Roastery and Bakery as well as a central kitchen which has enabled us to deliver seasonal menus and develop relationships with wonderful producers across Wales. Our growth has enabled us to donate over £100,000 to Guide Dogs UK, sponsoring nine life changing Guide Dog Puppies to date. The investment we’ve had from the Development Bank of Wales means we’ll be able to leverage our investment, speeding up our roll out to bring our Labs to even more communities across Wales and beyond.”
Thai Leisure Group – change in National Insurance was enough to spook our investors: Restaurant and bar owners across Leeds have warned that businesses in the hospitality sector could close without more support from the government. They told the BBC it had been a “difficult five years” but that Labour’s recent Budget had made their situation more difficult. Owners pointed to a rise in the national living wage and employer National Insurance contributions as a reason for increased pressures on their operating costs. However, chancellor Rachel Reeves said the government had extended business rates relief for a further year and committed to reforming the rates system, which would benefit hospitality businesses. Ian Leigh, managing director at the Thai Leisure Group, which operates the Chaophraya and Thaikhun brands, described Labour’s Budget as a “direct hit on growth”. Leigh said: “With Brexit, covid, energy bills and consumer sentiment it is a perfect endless storm. The sector takes pride in being resilient but we are almost expecting the next calamity.” He said the lowering of the National Insurance threshold in the Budget was a “tax on the number of people you employ, not a measure based on profits or any other business success” and said it would “hurt” his business. He went on to explain that the Budget was already having a negative impact on his restaurant. “The day after the Budget, we had a key meeting hoping to get some investment signed off to enable us to grow the business, open a couple more sites and employ more people. But the change in National Insurance was enough to spook our investors and they dropped out. They said it was a huge change and we’d have to change our business model.”
Consumer confidence continues recovery after suffering budget blues: Consumer confidence has extended its recovery from a drop triggered by prebudget fears, as a top City analyst said that the negative shock to the economy from Rachel Reeves’s tax increases had been overblown. The Times reports that an index of household sentiment compiled by GfK, the research firm, climbed by one point to -17 in December which, combined with November’s three-point jump, takes the reading further above levels registered before the budget on 30 October. The research released today reveals that consumers have become more bullish about their personal finances over the coming year and showed greater willingness to tap their savings to fuel spending. The index stood at -20 and -21 in September and October respectively. The rising sentiment comes as Simon French, a columnist for The Times and chief economist and head of research at Panmure Liberum, scrutinised claims that the chancellor’s budget would engineer a sharp economic downturn. Reeves raised taxes by £40bn in October, including a £25bn tax grab on employers by pushing up their national insurance contributions. In a research note to clients, French said that a “lazy consensus” had formed, which coalesced around the UK economy lacking resiliency. There was “no reason why economic momentum cannot be recaptured” in 2025, he said. Economists have speculated that inflation will stay higher for longer due to businesses raising prices to offset higher tax bills. Reeves also increased the minimum wage by 6.7% and the government has embarked on the largest upgrade to workers’ rights in a generation. The increase to employers’ NICs to 15% from 13.8% comes into effect next April. Recent data from the Bank of England showed that 54% of companies plan to raise prices in response to the national insurance increase. Some 59% said they would accept smaller margins. French said: “There are other levers/mitigations that employers can utilise that will have a different transmission through to consumer prices.”
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