Furlough costs hospitality more than half-a-billion per month during lockdown
According to analysis from S4labour, the online labour-scheduling management system from Catton Hospitality, pubs, bars and restaurants face a collective monthly furlough bill of £542m – with average extra employment costs per month per site, over and above Government furlough support, calculated at £3,738.
On top of employment costs, operators have rent to pay, utilities and insurance payments. What’s more, according to S4Labour, while Government grants based on rateable value are available and aimed at offsetting a large sum of bills, operators are left “constantly out of pocket”.
Business owners also face variable costs to using the furlough scheme, such as cash flow costs owning to the fact that the scheme pays in arrears meaning that operators are seeing money leave their businesses before being able to claim it back.
Rob Pitcher, chief executive of Revolution Bars said that the scheme, while welcome, has cost the business £1m at a time it has seen revenue vanish.
Sam Wignell chief customer officer at S4labour added: “With the current levels of Government support, businesses are going to run out of cash before they get the opportunity to reopen.
“The true cost of furlough is much higher than one might imagine.”
According to CGA’s Business Confidence Survey in May 2020, more than four in every five (83%) hospitality operators furloughed at least 90% of their staff during the first nationwide lockdown, with 96% of sites putting more than 70% of workers on the Coronavirus Job Retention Scheme.
Hospitality needs £35bn to save 500,000 jobs
A financial package of support worth £35bn is needed to safeguard 500,000 hospitality jobs, one business group has said.
As reported by The Morning Advertiser (MA), the Independent Business Network has called on the Chancellor to halve alcohol taxes, which it estimated would cost £1.8bn, include alcohol in the VAT cut (£750m) and extend the VAT reduction for the rest of this year (£6.3bn).
It also urged the Government to cut VAT rate payable by physical retailers to 14%, which would cost about £7.6bn and freeze town centre parking fees, at a cost of £872m.
In addition, the group wants the Chancellor to provide hospitality businesses with a Covid-investment rebate – which it estimated would be £690m – a continuation of the business rates holiday (£15bn), make hospitality investments 100% of the First Year Allowance (£1.15bn) in addition to reintroducing the Eat Out to Help Out Scheme with a ‘pro-hospitality’ focus (£1.08bn).
Deadline extended for £1,000 wet-led pub Christmas payment
The deadline for wet-led pubs to apply for the Christmas Support Payment (CSP) grant of £1,000 has been extended until 28 February.
The CSP is available to pubs that were in tiers two and three and were forced to reign in their operations as a result of seasonal Covid-19 restrictions.
The grant, which was labelled "meagre" by the trade, is administered by local authorities and pubs should contact their council to apply for the funding.
It is up to local councils to use their discretion when determining businesses meet the eligibility criteria and eligible firms will be paid a one-off lump sum of £1,000.
Find out more about eligibility criteria here.
Changes at the top for Stonegate
Jon Dale, director of communications for Stonegate, and previously head of corporate communications with Ei Group, has left the company.
Tim Painter, HR director at Stonegate Group said: “We confirm Jon Dale has left the company following our business realignment as we continue to integrate the Stonegate and Ei business functions.
“Kate Vicary, formerly Director of Special Projects is now appointed Director of Communications and Business Planning moving forward. We thank Jon for all his help and support throughout the integration period.”
Dale, who joined Ei Group from Sainsbury's Argos in 2017, was responsible for re-energising the business' internal and external communications, public affairs, events and stakeholder engagement strategies before it was sold to Stonegate for £1.27bn in March 2020.
Since then Dale played a key role in helping the new business navigate its way through the integration and ongoing global pandemic.
Culpeper Group appoints first MD
The Culpeper Group, which comprises London pubs the Culpeper near Spitalfields; the Buxton on Brick Lane; the Green in Clerkenwell and the Duke in Islington has named Sandy Jarvis as its first managing director.
Jarvis joined the Culpeper pub prior to its opening in 2014 to lead the kitchen. However, after becoming a partner in the group and joining its board as operations director in 2017 he has now been named managing director.
“Sandy has not only been instrumental in the growth of the business but also an absolute joy and inspiration to work with for me personally,” Culpeper Group co-founder, Nico Tréguer said of the appointment.
“His commitment to lead happy and fulfilled teams, passion for our industry, strive for consistent quality and making a difference in our communities and beyond whilst looking after our planet could not have been a better fit for the kind of business and people we want to be in society.
“I am very excited to have him as the first ever managing director of the Culpeper Family Hospitality Group. Past the current storm, the future is very bright.”
Marston’s 'unanimously' rejects Platinum share offer
Pub operator Marston’s has refused a proposed takeover offer from America-based firm Platinum Equity Advisors.
The proposal of 105p per share was considered by the board at Marston’s before it was unanimously rejected on the grounds it significantly undervalued the firm.
The latest offer followed two previously rebuffed bids of 88p and 95 a share at the end of last year (December 2020), which were received before Marston’s took on 156 SA Brains pubs.
It also represented a discount of almost a fifth (19%) to the Marston’s share price at the beginning of last year, before the coronavirus pandemic and the company has since completed the joint venture with Carlsberg to create the Carlsberg Marston’s Brewing Company.
Liberation Group backs Burnt Chef Project
Liberation Group, owner of Butcombe Brewing Co, has joined forces with the Burnt Chef Project to raise money for those in the hospitality industry struggling with mental health.
Teams from across Liberation Group’s estate of pubs in the south west and Channel Islands will compete in the Burnt Chef Project’s ‘Get Active Lockdown Challenge’.
Tracked on fitness platform Strava, for every mile team members run, cycle or swim before the end of March, Liberation Group will donate 25p per mile to the cause.
“It’s well documented how badly the hospitality industry has been affected during this pandemic, with pubs and restaurants having to close and many businesses unsure what the future holds,” Liberation Group CEO Jonathan Lawson said.
“Never before has it been so important for us all to come together and support our colleagues,” he continued. “The idea for this challenge was the brainchild of Jeremy Spencer, one of our operations managers, as a way of keeping colleagues active and positive during lockdown, safe in the knowledge they’re doing something good to help the industry we love."
Kris Hall, who founded the Burnt Chef Project in May 2019 added: “It’s no surprise that the mental health of the world has felt the impacts of Covid-19. No more so than hospitality who have faced the toughest of restrictions since lockdown was first announced back in March 2020.
“The Burnt Chef support service is a vital component to our ongoing work in providing the industry with a listening ear to anyone who may be suffering with their mental health or quite simply want someone to talk to and couldn’t come at a better time.
"It’s because of the amazing ongoing support that we have from the likes of the Liberation Group that we are able to continue developing and implementing services such as this to make the industry stronger and safer for everyone.”
Brixton Brewery fully acquired by Heineken
Drinks giant Heineken has acquired Brixton Brewery in full having purchased a minority stake in the south-London beermaker three years ago.
Founded in 2013 by Jez and Libby Galaun, Mike Ross and Xochitl Benjamin, Brixton Brewery sold an initial 49% stake to Heineken in November 2017 to facilitate its move to a new 15,000sq ft site thereby increasing its brewing capacity from 12,000 pints a week to 60,000.
However, Brixton Brewery announced on 1 February that following a successful three years’ working with Heineken, the beer behemoth had fully acquired the remaining stake.
“This will mean a bright future for our community-based business,” a post on Brixton Brewery’s website explained. “The founders of Brixton Brewery will continue to lead the brewery’s day-to-day operations and strategic and creative direction.
“In other words, we will still be smashing out your favourite beers fresh from south London, brewed by the same bunch of eccentric beer visionaries and inspired by the flavours of Brixton.”