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Trend of the Week
Political, Social & Economic Trends
QSR Sector
Casual Dining Sector
Travel and Leisure Sector
Pub Sector
Wholesale and Manufacturing Sector
People and Acquisitions
Contract Catering Sector
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Main Articles
Political, Social & Economic Trends

Higher inflation in food to remain throughout 2018

High inflation in the UK food and grocery industry will remain throughout 2018 due to the recent introduction of the sugar levy on soft drinks and poor weather conditions impacting harvests, according to data and analytics company GlobalData. While overall retail inflation fell by 0.3ppts from 2017 to 1.6% in 2018, food & grocery inflation will remain higher and down only 0.1ppts to 2.7% over the same period. Furthermore, wetter and warmer weather from the ‘La Nina’ effect across the US and South America will see poor harvests in coffee, grains and cocoa, significantly affecting the bakery & cereals and hot drinks sectors.

Source: Kamcity, 21st May

 

Cut the bacon and booze to keep cancer at bay

Sticking to water and avoiding alcohol and bacon could help reduce the risk of cancer by up to 40%, according to experts. Eating and drinking properly are essential to protect against the disease, they said after an overview of hundreds of studies involving more than 51 million people. Updating guidance for the first time in a decade, the fund said that the link between obesity and cancer had grown stronger, leading them to advise against fizzy drinks and fast food, including processed meat, for the first time. While red meat is thought to cause cancer only if eaten in large quantities, any regular amount of processed meat such as ham or bacon has been found to increase people’s risk. The guide also says that it is “best not to drink alcohol” as it is thought to be linked to stomach cancer, in addition to five other forms of the disease.

Source: The Times & The Telegraph, 24th May

 

Job vacancies fall 11% as restaurants cut staff costs

A downturn in the restaurant sector has led to an 11% decline in job vacancies during the past six months, according to a new report. The UK-wide review of the industry by accountancy firm Moore Stephens found there were 32,900 vacancies in April 2018, down from 36,900 in November 2017, while restaurants’ profits had plunged during the past year. It stated many chains were being forced to close unprofitable sites and reduce staff numbers at other branches.

Source: Propel, 22nd May

QSR Sector

Deliveroo to invest £5m in restaurants fund

Deliveroo the food delivery service will jump to the other side of the counter with plans to invest in restaurants in the UK as it seeks to differentiate itself from rivals in an increasingly competitive takeaway market. The London-based delivery app said yesterday it had launched a £5m “innovation fund” to invest in restaurants in the UK and “potentially internationally”. The move marks a further departure from its original asset-light model. The fund will initially be closed to outside investors and is expected to make investments for between six months to two years. The aim, according to Deliveroo, will be to fund restaurants and celebrity chefs that want to expand into new areas or develop menus that can be delivered by couriers through the app.

Source: The Financial Times, 20th May

 

McDonald's unveils unique design at Sydney airport

McDonald's has unveiled a new Sydney airport site, where food is delivered to customers via a conveyor belt from a glowing yellow glass box dubbed its “kitchen in the sky”. The “Instagrammable” new restaurant features a see-through kitchen raised high above International Terminal One, with design firm Landini Associates briefed with creating an “iconic, memorable customer experience, like nothing seen before”. “The McDonald’s restaurant in International Terminal One has become one of the most Instagrammed places at Sydney airport,” said general manager of retail Glyn Williams.

Source: Propel, 21st May

 

Just Eat enlists TV Dragon to dish out help to its 29,000 restaurants

Takeaway website Just Eat has enlisted former Dragons’ Den star Sarah Willingham to offer help and advice to the 29,000 restaurants signed up to its service. The takeaway website reckons that more than half of these businesses could increase their sales by 5% – or £1.1bn in aggregate – by 2023, boosting the country’s economy and creating 55,000 jobs, with a bit of help. According to Just Eat data, 30% of restaurant owners had not checked how much they were actually earning in the past two years and that nearly a quarter had not reviewed the prices on their menus.

Source: The Telegraph, 24th May

Casual Dining Sector

Casual Dining Group expands hotel franchise portfolio with London Town deal

Casual Dining Group, which operates about 290 mid-market restaurant brands including Cafe Rouge, Bella Italia and Las Iguanas, has signed UK franchise agreements to operate the food and beverage programmes at two UK hotels. The company said the deals, which are both with London Town Group (LTG), demonstrated its desire to grow its franchise portfolio. Casual Dining Group will create and operate a bespoke offering at Hotel Indigo London-Paddington and introduce a Bella Italia at the new-build Holiday Inn Leicester-Wigston, which is due to open in early June. Hotel Indigo’s restaurant, London Street Brasserie, will retain its name but feature new staff and menus when it reopens following a refurbishment. The company has also signed management contracts at the sites.

Source: Propel, 23rd May

 

Like-for-like sales down at The Restaurant Group 

The Restaurant Group (TRG) has reported like-for-like sales for the 20 weeks to 20 May down 4.3%, with total sales falling 3.1%. Excluding the impact of snow, the company said like-for-like sales for the period would have decreased 3.1%.  In the first seven weeks of the second quarter like-for-like sales declined 1.8% as the group began to lap the significant price investments made last year.During the first 20 weeks of the year, the group opened nine new units and the pipeline of new openings within the Brunning & Price pubs arm was strengthened with the acquisition of four pubs from Ribble Valley Inn.  Including this package the group now expects to open around 10 pubs this year. 

Source: MCA, 24th May

 

GBK to close sites

GBK plans to close six restaurants, slash its openings pipeline for this year and refresh 30 sites, as it seeks to turn around sales, which fell 6.8% on a like-for-like basis in the year to 28 February. The plan will also involve moving away from an exclusive delivery partnership with Deliveroo to link up with Just Eat and other providers. Two sites GBK sites will open in 2018, compared to ten in 2017. Six ‘distressed sites’ have been identified, with Oldham closing last week. Derrian Nadauld, managing director of the brand, said that it had been hit by a combination of factors, including consumer confidence but also the rapid increase in competition. He said where there had been incursion into GBK’s catchment area, the restaurant had seen an average 7% decline.  He said that in areas where a nearby Byron had closed, GBK restaurants had seen up to 14.8% uplift in like-for-like sales.

Source: MCA, 24th May

Travel and Leisure Sector

TRG Concessions to take over F&B offer at London Southend airport

The Restaurant Group (TRG) Concessions is to take over to the running of the food and beverage offer at London Southend airport next month. The takeover is part of TRG’s investment of £5m-plus to develop the airport's food and beverage offer over the next ten years. The sites were previously operated directly by the airport. The development of the catering offer is expected to create further jobs in the airport over the coming year with all current staff being offered contracts with TRG Concessions.

Source: Propel, 20th May

 

Premier Inn rolls out solar programme to 70 more sites

Whitbread has extended its nationwide solar programme to a further 70 Premier Inns, cementing the hotel chain’s position as a leader in sustainability and energy efficiency. Installations will be designed and managed by renewables developer Anesco, with all work expected to be complete by the autumn. Anesco previously installed solar panels on 88 Premier Inns between 2013 and 2015. The new installations will mean more than 20% of Whitbread’s Premier Inn estate will have been fitted with solar panels at a total capacity of more than 3MW – equivalent to the energy required to power about 2.9 million washing machine cycles.

Source: Propel, 22nd May

Pub Sector

NewRiver acquires Hawthorn Leisure for £106.8m

NewRiver, which owns a portfolio of about 330 pubs, has acquired Hawthorn Leisure from an affiliate of Avenue Capital Group for an enterprise value of £106.8m. This represents a net initial yield based on the value of the pub portfolio of 13.6% and will be satisfied using NewRiver’s existing resources. NewRiver stated: “As well as a portfolio of 298 community pubs, the acquisition includes an established brand and pub management platform, which could be applied across the company’s existing pub portfolio, generating significant scale-based synergies. NewRiver has identified the pub sector as an attractive investment to deliver on its business strategy. The sector generates high levels of low-risk, diversified cash returns and contains a number of in-built value creating asset management and development opportunities, including the potential to build convenience stores or residential units on surplus land adjacent to pubs.” Having acquired its first portfolio of 202 pubs from Marston’s in November 2013, NewRiver acquired its second portfolio of 158 pubs from Punch in 2015. NewRiver said the Hawthorn Leisure portfolio “provides attractive scale” for the company, increasing the size of its estate to 629 pubs.

Source: Propel, 24th May

 

Brunning & Price acquires Ribble Valley Inns

Brunning & Price, The Restaurant Group’s gastro-pub vehicle, has acquired Ribble Valley Inns, the food-led pub brand of Northcote Leisure Group  for an undisclosed sum. The deal takes in The Highwayman, Kirkby Lonsdale, The Clog & Billycock, Blackburn, The Three Fishes, Mitton and The Bull at Broughton. The fifth Ribble Valley Inns pub, the Nag’s Head, Tarporley, did not form part of the deal and is to be sold separately.

Source: MCA, 22nd May

 

Young’s reports managed like-for-likes up 7.5% since year-end

London pub retailer Young’s has reported a 7.5% increase in like-for-likes and sales up 11% in total in its managed estate in the first seven weeks since the year-end. For the year ending 2 April 2018 managed like-for-likes grew 4.2% with revenue up 6.9% to £266.4m. Total company sales rose 3.9% to £279.3m and adjusted operating profit was up 1.7% to £46.9m. Profit before tax was up 1.6% to £37.6m. Operating cash flow was £61.4m with the net debt to adjusted Ebitda ratio one of the lowest in the sector at 2.0 times.

Source: Propel, 24th May

Wholesale and Manufacturing Sector

Bestway’s symbol group seeing strong growth since collapse of P&H

Bestway Wholesale has revealed that its symbol chain, Best-one, has recruited 125 stores in the first four months of this year, with another 1,000 retailers signalling their interest to join. The group has seen retailers from every region sign up to become part of the symbol group, which is growing at 19.6% year-on-year in terms of sales. Tony Holmes, Sales Director of Bestway Wholesale, said that the collapse of P&H was a catalyst for the unprecedented interest in the group.

Source: Kamcity, 21st May

 

Annual profits up 9% at Musgrave

Ireland’s Musgrave group has revealed that its pre-tax profits rose 9% to €80m in the year to 30 December 2017, on turnover relatively unchanged at €3.71bn. SuperValu recorded sales of €2.7bn, a new record for the brand. It also saw its online shopping sales increase by 23%. The Centra convenience unit recorded sales of €1.58bn, supported by consumer demand for healthier options. Sales of Centra’s Grab & Go healthy sandwich range rose by 24% last year, whilst impulse water purchases were up 10% and sales of salad boxes rose to almost €2m. The MarketPlace foodservice business recorded “strong sales performance”, helped by a full year contribution of the C.J. O’ Loughlin business that it acquired in 2016 and the continued roll-out of the Food Emporium format. Musgrave added that its recent acquisition of La Rousse Foods will allow it to broaden its offer to premium food establishments. The group also pointed to the success of other brands, including Frank and Honest coffee, which is now available at 630 stores across the country. Meanwhile, its Chipmongers takeaway business is expected to grow to 30 outlets by the end of the year.

Source: Kamcity, 23rd May

 

United wholesale grocers acquires one of A F. Blakemore’s depots

Scotland’s United Wholesale Grocers (UWG) has agreed to purchase A.F. Blakemore’s cash & carry depot in Gateshead, marking its first move into England. The deal between the two members of Landmark Wholesale will see all 45 existing members of staff retained when the depot moves to new ownership next month. The transaction, for an undisclosed sum, increases UWG’s depots to three, with the other two in Glasgow. A.F. Blakemore & Son announced back in April that it had decided to sell its wholesale division, which consists of 12 cash & carry depots.

Source: Kamcity, 24th May

People and Acquisitions

Mondelēz International appoints new MD for UK Business

Mondelēz International has appointed Louise Stigant as the new Managing Director of its UK operation. She will take on the post from 1 June, replacing Mike Taylor who has held the role for almost two years. Stigant has worked at Mondelēz International since it was spun off in 2011 from Kraft – a company she joined in 1994. Stigant became MD of Mondelēz International’s Irish unit in March 2015, before moving on after a year to become Commercial Director for Northern Europe. She is currently the region’s MD of meals.

Source: Kamcity, 21st May

 

Moy Park appoints new head

Just months after being sold to US firm Pilgrim’s Pride, Northern Ireland-based poultry product producer Moy Park has replaced it Chief Executive. Chris Kirke has been appointed to a new President role, succeeding Janet McCollum, who has led the business since 2014. Kirke most recently led the US division of Greencore, which supplies convenience food products to some of the largest retailers and brands in America.

Source: Kamcity, 23rd May

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Contract Catering Sector

Crussh unveils Sodexo partnership 

London-based healthy food and juice brand Crussh has announced a landmark franchise deal with the world’s largest services company Sodexo, with a commitment to open at least 35 sites over the next five years across the UK and Ireland. The partnership will see Crussh opening outlets across all the Sodexo business – from workplace catering to universities, hospitals and government locations. Crussh will take a “creative approach” to the requirements of each location, covering traditional cafe formats, as well as larger scale sites, food trucks and pop-ups. The first site will be opening in the summer and there is a pipeline of sites under review.

Source: Propel, 24th May

 

CH&CO introduces new group structure & brand identity

CH&CO Group has launched a simplified group structure that will operate across the UK under the name CH&CO and with a new, strong brand identity that clearly defines the marketplaces in which it operates. CH&CO will continue to operate in the same marketplaces it always has, but its 20+ brands are to be replaced with defined operating sectors: CH&CO Workplaces; CH&CO Destinations; CH&CO Venues; CH&CO Events; CH&CO Education; and CH&CO Livery. A small group of endorsed brands will continue to operate where the unique nature of their marketplace dictates. These include Principals by CH&CO and ABsolutely by CH&CO; both specialist companies within the State catering sector. The Brookwood Partnership will become CH&CO Independent Education later this year. From June 2018, all new business will be bid for under the new branding. It is planned that following consultation with clients, existing business will transition to the new branding by October 2018.

Source: Caterlyst, 24th May

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