Welcome to our weekly round-up, where we delve into the mainstream media's hospitality industry coverage. This article is crafted to inform you about the latest news, trends, and developments in the sector. We've handpicked articles from reputable sources that shed light on the dynamic and evolving world of hospitality. Our selection criteria focus on each story's significance, relevance, and impact, ensuring a comprehensive understanding of the industry's current state.
Greggs Becomes a Charmless Monster: A Look at Its Rapid Growth
Date: 17 January, 2024, Author: Josh Barrie, Source: The Independent
Once a Northern bakery, Greggs has grown into a culinary behemoth with a market valuation nearing £3 billion. Recent data reveals that nearly £2 out of every £100 spent in UK bricks-and-mortar hospitality is now in Greggs, a significant jump from the previous year's £1.60. With over 2,300 shops and a 20% increase in sales in 2023, it's clear that Greggs is no longer a humble bakery but a mainstream dining icon akin to Nando's or Pret.
While some celebrate its convenience and affordability, others mourn the departure of the once-romantic family trader. As the UK's hospitality sector faces closures and dwindling numbers of licensed premises, the rise of Greggs prompts questions about the sustainability of relying on sausage rolls alone. Read more
Welsh Government Accused of Dealing 'Hammer Blow' to Hospitality, Retail, and Pubs in Rates Snub
Date: 16 January 2024, Author: Owen Hughes, Source: North Wales Live
The Welsh Government faces criticism for not passing on the 75% business rates discount, described as a "hammer blow" to the hospitality, retail, and pub sectors. While the UK Government extended the discount in England for another year, the Welsh Government reduced rates by only 40% for 2024/25, redirecting the saved funds to public services. This decision comes amidst daily pub and restaurant closures across Wales and the UK, driven by rising energy costs, cash-strapped customers due to high inflation, and increased supplier and staffing expenses.
Businesses in Wales will now face a disadvantage compared to their English counterparts, with some estimating an additional £8,500 cost for a business with a rateable value of £40,000. Various stakeholders are making calls for a reconsideration of this decision, but First Minister Mark Drakeford has firmly ruled out a U-turn. The move has triggered concerns about its impact on the economy and local communities, with industry leaders urging the Welsh Government to implement 75% business rates relief. Read more
Scotch Whisky Gives UK Economy a £7bn Boost
Date: 16 January, 2024, Author: Greig Cameron, Source: The Times
The Scotch whisky industry has substantially boosted the UK economy, contributing over £7 billion and supporting 66,000 jobs in a single year, according to research from the Scotch Whisky Association. This economic impact report revealed that approximately 41,000 of these jobs were directly or indirectly linked to Scotland, while the remaining positions were distributed across England, Wales, and Northern Ireland.
The gross value added (GVA) for 2022 reached £7.1 billion, marking a remarkable 29% increase since 2018, largely driven by increased sales, the establishment of new distilleries, and investments in visitor attractions like the Johnnie Walker experience in Edinburgh. Moreover, significant spending on technology aimed at achieving net-zero emissions contributed to this growth.
Scotland dominated the GVA total, with £5.3 billion attributed to the nation, with the Highlands and Islands region leading at £799 million, followed by Glasgow at £627 million. The industry's commitment to investing in the future is expected to create even more jobs and strengthen the UK's position in the global whisky market. Mark Kent, CEO of the Scotch Whisky Association, emphasised the industry's vital role in both domestic and international economies. Scottish Secretary Alister Jack and Scotland's Wellbeing Economy Secretary Neil Gray echoed the importance of Scotch whisky's contribution to the nation's economy and global reputation. Read More
James Atkinson Inquest: Coroner Calls for Ingredients Law Change
Date: 16 January, 2024, Source: BBC News
In a significant development, Coroner Karen Dilks has expressed her support for a proposed law change that would compel restaurants to disclose food ingredients on their menus. This decision follows the tragic death of James Atkinson in July 2020, who suffered a fatal peanut allergy reaction after consuming a slice of chicken tikka masala pizza from Dadyal restaurant in Newcastle, purchased through the Deliveroo app.
Mr Atkinson's parents have been advocating for stricter regulations to ensure clear labelling of ingredients on menus, and their efforts have found backing from Assistant Coroner Karen Dilks. In her narrative conclusion, she pledged to write to the Department of Health to encourage regular allergy reviews for patients and the importance of carrying EpiPens.
Furthermore, Coroner Dilks intends to support Owen's Law, an initiative demanding written allergen disclosures by restaurants. However, regarding allergy risk mitigation, she refrained from recommending major food ordering apps like Deliveroo, UberEats, and Just Eat.
James Atkinson's parents have called upon these apps to conduct a collaborative review to enhance consumer protection. Despite their heartbreak, they hope that their efforts may prevent similar tragedies in the future.
The inquest revealed that the restaurant did not specify the presence of peanut powder, a hidden allergen, in its chicken tikka masala. It also highlighted the importance of customers informing staff about their allergies and having EpiPens on hand. Read More
Hotel Forced Female Manager to Take More Brutal Pandemic Pay Cut
Date: 11 January, 2024, Author: Jonathan Ames, Source: The Times
A luxury Surrey hotel, Great Fosters, known for hosting legendary actors Charlie Chaplin and Orson Welles, has been ordered to pay £26,000 in damages to its manager, Sandra Mueller, following a pay dispute ignited by pandemic-induced salary cuts. In 2020, during the height of the pandemic, Mueller's £90,000 salary was reduced by 33%, but she refrained from contesting the cut at the time. Later, she discovered that two male colleagues had experienced a smaller 25% pay reduction, justified by hotel management as having "bigger jobs."
Mueller filed a lawsuit against Great Fosters, alleging sex discrimination, citing illogical reasons for the pay disparity. The tribunal in Bury St. Edmunds ruled in her favour, stating that all three employees had similar job descriptions and contractual documentation, making the pay discrepancy unjustified.
The tribunal acknowledged the challenges faced by the hospitality industry due to the pandemic and Mueller's innovative efforts to recover hotel revenue. Consequently, Sandra Mueller was awarded £26,610.89 in compensation for sex discrimination. Read more
Last suppers at Le Gavroche, the family business that changed how we eat
On 14 January 2024, Charlotte Ivers from The Times bid farewell Le Gavroche, the legendary restaurant that revolutionised British dining. After 57 years of culinary excellence, Michel Roux Jr. closed its doors to the public while leaving behind a lasting legacy.
The Roux brothers, Albert and Michel Sr., introduced French cuisine to London and achieved the UK's first Michelin star. Their passion for culinary arts shaped a generation of chefs, including Marco Pierre White, Gordon Ramsay, and Marcus Wareing. Le Gavroche's influence on the food scene has been profound, elevating the dining experience for all.
Michel Roux Jr. took over in 1991, emphasising a welcoming and unpretentious atmosphere. Despite numerous offers to expand the brand, he insisted on his personal presence, making diners feel at ease.
As Le Gavroche served classic dishes like the signature cheese soufflé and omelette Rothschild, it remained a steadfast institution, a testament to timeless culinary excellence. For many, it was a place of indescribable joy, leaving an irreplaceable void. Read More.
Lloyds Bank is bowled over by spending on leisure
Date: 18 January, 2024, Author: Hikmat Olufodun, Source: The Times
According to Lloyds Bank's latest findings, Britons have shown a remarkable increase in leisure spending, with a particular focus on bowling. In December 2023, compared to the same month in the previous year, spending on bowling doubled, signalling a resurgence in this recreational activity. Gabby Collins, payments director at Lloyds, attributed this growth to the revival of family get-togethers and Christmas parties.
Holiday bookings also witnessed a significant boost, with demand for cruises surging by more than 25% compared to December 2022. Britons seemed eager to escape the wet UK weather, favouring cruise vacations. Bars and pubs experienced a 14% increase in spending, while restaurants saw a 7% rise. Gyms and fitness classes enjoyed a 12% spending increase, but clothing sales dipped by 4%.
In terms of essential expenses, petrol consumption slowed, but electric vehicle charging surged by an impressive 47% year-on-year. Commuting spending increased by 15%, while energy expenses rose by a modest 4%. Despite rising essential costs, people are prioritising spending on leisure activities enjoyed with family and friends, according to Collins. Read More
Christmas Feast Propels Cranswick to Exceed Forecasts
Date: 19 January, 2024, Author: Charlotte Alt, Source: The Times
Cranswick, a prominent FTSE 250 producer known for its fresh pork, bacon, gourmet sausages, and poultry, experienced a remarkable boost in its performance during the last quarter. Trading in the third quarter, especially during the crucial Christmas season, exceeded expectations.
This unexpected surge in business positions the company to surpass its previous estimate of pre-tax profits, which was set at £160.8 million for the full year ending in March.
Originating in the 1970s, Cranswick has grown significantly from its roots as a collective of farmers producing pig feed. Today, the company employs over 14,750 individuals across 22 facilities, supplying supermarkets with diverse products, from gourmet pastries to continental meat assortments.
Despite a challenging period in 2022, marked by concerns over rising grain prices due to the Ukraine crisis, Cranswick's share price has made an impressive recovery, witnessing a 25% increase in the past year. The positive trading update further bolstered its stock, which closed at £39.02, up by 0.4%.
Additionally, Bakkavor, another FTSE 250 player specialising in fresh salads and sandwiches for supermarkets, concluded 2023 on a high note. With a 5.3% like-for-like revenue growth, totalling £2.2 billion for the year ending December, the company outshone expectations. This achievement was driven by a 20.7% sales rebound in China, compensating for a 10.1% slowdown in the United States.
Bakkavor anticipates its operating profits will align with the upper end of market projections, ranging from £89.7 million to £91.1 million, when it unveils its 2023 results.
Mike Edwards, the 56-year-old Chief Executive of Bakkavor, emphasised the need for a dynamic and decisive strategy in 2023 to navigate external challenges successfully. As a result, the company is poised to deliver improved profitability and reduced leverage for the full year. Read more
The kebab chain quietly taking over Britain's fast-food scene
German Doner Kebab (GDK) has emerged as an unexpected success story in the British fast-food landscape. Despite facing challenges like Covid and inflation, GDK has expanded rapidly in the UK, becoming a formidable contender in the restaurant industry. This modern twist on the classic döner kebab originated in Germany, where Turkish immigrants created it. GDK entered the UK market in 2015, and with the backing of Glasgow-based Hero Brands, it has steadily grown to over 135 locations nationwide.
GDK distinguishes itself with its distinctive orange and black branding and the slogan 'Kebabs done right.' This chain brings a level of predictability to the kebab experience, offering thinly sliced, 100% halal chicken or beef wrapped in uniquely textured bread and complemented with various salads and sauces. GDK's clever strategy includes internationalised offerings such as döner quesadillas, döner paninis, and more, catering to diverse tastes.
Despite the simplicity of its approach, GDK's relentless expansion serves as a stark reminder that efficiency often prevails in the competitive food industry, overshadowing beloved local establishments and innovative newcomers. Read More
Cracks Appear in Churchill China's Profitability Prospects
Date: 18 January, 2024, Author: Helen Cahill, Source: The Times
In response to cost-cutting measures within the hospitality industry, Churchill China has warned about lower demand for its ceramics in Britain and Europe. The Aim-listed company attributes this drop in demand to increasing costs resulting from rises in the national living wage. To counter an expected decline in margins, Churchill China plans to raise its prices and reduce operational expenses, including reducing agency staff.
With a presence in 80 countries, Churchill China is a longstanding manufacturer of ceramic products for restaurants, schools, and hospitals, established in 1795. While its 2023 annual revenues declined slightly from £82.5 million to £82.1 million, the company anticipates profits to meet City expectations.
Chairman Robin Williams, 66, expressed confidence in the company's resilience despite the challenging outlook for 2024. He believes Churchill China's long-term strategy positions it well to capitalise on improved demand, even as it recovers from the pandemic's impact and navigates energy price volatility following Russia's invasion of Ukraine. Read more
Lack of VAT-free Shopping Hurts UK's Tourism Industry, Raising Concerns Among Retailers
Date: 17 January, 2024, Author: Samantha Downes, Source: The Independent
The decision by the UK to discontinue VAT-free shopping post-Brexit is adversely impacting the country's tourist industry, as retailers express their concerns. Luxury brand Mulberry has recently attributed a decline in revenue to the absence of VAT-free shopping in the UK. This move has been deemed detrimental to the retail, leisure, and hospitality sectors, with VAT imposition on tourists being identified as the cause.
According to the Financial Times, the average spending by non-EU visitors in the UK surged to £1,612 in 2021, compared to £1,036 in 2020. However, in 2022, despite nearing pre-pandemic visitor levels, this figure dropped by 17% to £1,346, and the decline persisted throughout the first half of 2023.
In contrast, tourist expenditures in Italy and Spain increased during the same period. France saw stable levels in 2022 before experiencing growth in the following year. The Association of International Retail (AIR) lobby group asserts that this government decision has severely impacted British businesses, particularly heritage brands.
This VAT imposition, often referred to as the "tourist tax," has discouraged visitors from choosing the UK as their destination, further affecting the struggling post-pandemic economy. While the Treasury states that all taxes are subject to review, the absence of tax-free shopping may continue to deter international tourists and affect the broader hospitality and tourism sectors. Read more
Just Eat Takeaway to end Paris delivery service, around 100 jobs affected
Date: 18 January 2024, Author: Reporting by Toby Sterling, Benoit Tessier, and Benoit Van Overstraeten, Source: Reuters
In a significant shift in its business strategy, Just Eat Takeaway has announced the closure of its in-house delivery service in Paris, potentially affecting approximately 100 jobs. The decision departs from the company's unique approach of employing its couriers in Europe, contrasting the gig economy model adopted by larger competitors such as Uber and Deliveroo. This move in Paris follows a similar strategy alteration in most of France in 2022, where Just Eat Takeaway transitioned to using a third-party courier service, Stuart, employing self-employed couriers. The company cites competitive disadvantages in France as a key factor for this change. Just Eat Takeaway's CEO, Jitse Groen, criticised the European Union for not approving the Platform Work Directive, establishing a "presumption of employment" for gig workers, highlighting its importance in countries with strong labour beliefs like France. The company recently reported exceeding its forecast for 2023 core earnings and achieving a break-even free cash flow in the year's second half. Read more
Scots hospitality businesses are struggling to survive in tough economic climate
Date: 20 January 2024, Author: Daily Record
Scotland's once-thriving hospitality sector is facing unprecedented challenges in the current economic climate. While the country has long been celebrated for its warm hospitality, with a wide array of hotels, restaurants, and pubs, the industry is now grappling with significant difficulties. Pubs, in particular, are bearing the brunt of these challenges.
With a higher rate of closures compared to England, Scotland's pubs are feeling the squeeze. Some attribute this to changing social attitudes, but many within the sector believe the Scottish Government has neglected them. The repeated lockdowns have taken a toll. Soaring energy costs and increased prices for essential supplies are exacerbating their woes.
While the UK Government provided rates relief for hospitality businesses last year, this relief does not extend to Scotland, as SNP ministers have refused to follow suit. This disparity leaves many pub owners feeling undervalued and overlooked by Holyrood.
For many smaller communities, the local pub is a vital meeting place. With cuts to libraries and community centres, it is often the last social hub. A high street without a pub is a concerning sight, and it's high time that the industry receives the support it deserves after enduring several gruelling years. It's essential not to ring the last orders bell on Scotland's beloved pubs. Read more
Deliveroo Exceeds 2023 Earnings Guidance, Shows Growth in Q4
Date: 19 January, 2024, Author: Paul Sandle, Source: Reuters
In a report dated 19 January 2024, authored by Paul Sandle for Reuters, British meal delivery giant Deliveroo announced that its 2023 earnings are expected to surpass initial guidance. The company anticipates earnings slightly higher than the previously forecasted range of £60-80 million. Moreover, Deliveroo reported a 3% increase in the total value of orders on its platform, aligning with its projections.
Founder and Chief Executive Will Shu emphasised the company's strong performance in the UK and Ireland during the fourth quarter. Additionally, Deliveroo's international business exhibited signs of growth. Shu attributed this success to stabilising consumer behaviour, prompting continued investments in enhancing the consumer value proposition to pave the way for future expansion. Read more
McDonald's stock rises to a record, brushing off investor worries about sales
Date: 19 January 2024, Author: Tomi Kilgore, Source: MarketWatch
MarketWatch's Tomi Kilgore reports that McDonald's Corp.'s stock achieved a record high, defying investors' concerns about declining sales and sluggish traffic in an uncertain macroeconomic climate. Despite worries that the fast-food giant might miss fourth-quarter same-store sales expectations due to tensions in the Middle East and increased competition in the quick-service restaurant sector, McDonald's stock rallied. Wells Fargo analyst Zachary Fadem acknowledged rising caution among investors but noted that trends improved throughout the fourth quarter. The stock climbed 2.2%, nearing its first-ever close above $300.
McDonald's is set to report its fourth-quarter results in early February, with a consensus expectation of 5% growth in same-store sales. Despite a slowdown, McDonald's has consistently outperformed sales expectations in recent quarters, reflecting its resilience in the market. Read more
Conclusion - This week's news articles offer a fascinating snapshot of the diverse challenges and triumphs within the hospitality industry. From the evolving cultural significance of brands like Greggs to critical policy decisions impacting regional businesses, these stories collectively paint a picture of an industry at a crossroads. As we navigate economic uncertainties and shifting consumer behaviours, the resilience and innovation of the hospitality sector continue to play a crucial role in shaping its future.
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