CLH News #210 March 2018

Page 1

THE LEADING PUBLICATION FOR THE INDEPENDENT HOSPITALITY SECTOR

RETURN TO PROFIT Let us help you put your business back into profit We work “hands-on’ with you, in your business to:

1. 2. 3. 4.

Maximise your Profit Margins Minimise your Operating Costs Resolve any Operational and Staff Issues Increase the Profit from your Business

We will tailor a package that is realistic and practical for your business

Please call David Hunter of The Bowden Group for an informal chat about how we can HELP YOU

07831 407984 or

01628 487613

HOTELS, RESTAURANTS, PUBS & CATERING

www.catererlicensee.com

March 2018

Issue 210

Products and Services

Hospitality Technology

Microwaves and Combi Ovens

Outdoor Leisure

Food Safety and Monitoring

Pages 24 - 27

Pages 28 - 29

Property and Professional

Pages 20 - 21

Pages 22 - 23

Design and Refit

Page 30

Pages 31 - 36

Pages 37 - 39

Casual Dining Contraction Could be “Independents’ Opportunity” WITH CASUAL dining brands closing sites and scaling back expansion, well-run independent operators have an opportunity to take back market share, according to buying specialist Lynx Purchasing.

A perfect storm of high annual rents, increasing business rates, the national minimum wage increase, rising food costs have proved catastrophic for the casual dining sector which has seen high profile outlets “hit the buffers” this year. In January the Italian restaurant chain Strada announced that it was the close 10 of its 26 sites, quickly followed by Square Pie, the gourmet pie and mash chain which went into administration with the closure of five sites and the loss of 50 jobs. Also, in January upmarket burger chain Byron, the entered a CVA with the announced closure of up 20 of its 67 sites close. After which Jamie Oliver’s chain, Jamie’s Italian, announced plans to close 12 of its 37 sites with debts of £71.5m and the loss of 450 jobs. His two site Piccadilly barbecue restaurant Barbecoa has also gone into administration, Italian restaurant chain Prezzo earlier this month announced that it is to close 100 restaurants of its 300 sites as part of a company voluntary agreement (CVA), which is defined as a form of administration aimed at protecting a business from going bankrupt entirely. At the same time Prezzo also announced that it is to close completely its Tex-Mex chain Chimichanga, as part of the restructure which is likely to see the loss of hundreds of jobs from its 4,500-strong workforce. If that wasn’t bad enough the casual dining sector Carluccio’s Italian Chain called in advisors earlier this month to assess its options during what is described as “turbulent times” for the sector, and The Casual Dining Group, owners of High Street food chains Cafe Rouge and Bella Italia posted a sharp increase in losses which increased 18% to £60m, despite a 2.2% rise in like-for-like sales up to May 2017. CGA’s latest Business Leaders survey recently showed that senior executives are expecting more business failures this year and a pull back on expansion plans. ‘This is already reflected in the Coffer Peach numbers,’ said Peter Martin vice president of CGA. ‘New sites are still being opened but casual dining chains in the cohort are now rolling out at a rate below that of the pub companies. Over the last 12 months, total sales growth, reflecting new openings as well as closures, was 3.8% for restaurant groups compared to 4.3% for managed pub and bar chains.’ Whilst increases in operating costs have had a significant impact other key factors industry observers believe have contributed to the crisis include overexpansion with too many competitors competing in an over saturated market, quality and complacen-

cy have also played a part. M Restaurants founder Martin Williams recently criticized “dated and rightly dying” chains as he reported 19% growth across his group, and contrasted them to the success of “highest quality at accessible price points” provided by his individual restaurants. So what does this mean for the independent sector? There is certainly opportunity for the independent sector to capitalise particularly pubs. Pubs have in recent years suffered significantly particularly due to issues such as the smoking ban the financial crunch and the increase and expansion in the casual dining sector. However, the pub is beginning to see its fortunes turn says Phil Tate CEO of Food & Drink market analysis CGA. “Like-for-like sales in the drinks led managed market is up 1.6% in total sales up 4.3%. This is considerably outperforming the restaurant and pub food markets with consumers returning to the pub and business leaders of wet led operations having a much more optimistic view of the future” Rachel Dobson managing director of Lynx purchasing believes that operators who do their homework on the eating-out market, including implementing strong buying disciplines, can broaden their customer appeal, “Since the start of 2018 we’ve seen a number of well-known casual dining operators announce branch closures, renegotiate with their landlords, and cut back on expansion plans. “It’s clear that some brands had over-extended themselves. While every business is dealing with the challenges of more cautious levels of consumers spending, there are still customers ready to eat out if they are offered good value and quality. “Many of the businesses we work with are independent restaurants, pubs and cafés, and we’re advising them to look carefully at their menus and suppliers, and make sure they are implementing sensible buying habits that will enable them to make the most of opportunities in the current market.” Dobson adds: “There will be boosts to trade around upcoming occasions such as Easter, as well as two Bank Holidays and the Royal Wedding in May; and, as we know, it sometimes only takes a spell of good weather to persuade customers out to eat and drink. “While there are many factors beyond operators’ control, we are emphasising the importance of cost control and good buying habits to all our customers. Our new free insight guide, ‘The Seven Habits of Highly Effective Purchasing Teams’, details seven proven ways that operators can make simple improvements to their purchasing, to generate substantial savings that can mean the difference between staying profitable or going under in this challenging market.”

RETURN TO PROFIT

Let us help you put your business back into profit...

PROFIT TURNAROUND

MAXIMISING PROFITABILITY

If you have a Restaurant / Hotel / Pub business that is not profitable, and you want it turned around, call David Hunter on 07831 407984 to discuss this. We have a very impressive 30-year track record of profit turnaround, and David is the very best person to help you to turn your business around.

If your business IS profitable, but you need it to be MORE Profitable, David Hunter can do this for you. David will ‘’benchmark’’ your business against the current market, and will tell you what SHOULD and CAN be achieved by that particular and individual business. David will work with you and your Team to deliver that essential improvement in Profitability.

We will tailor a package that is realistic… and practical, for you… Please call David Hunter of The Bowden Group about how we can HELP you…

07831 407984 or 01628 487613

HOTELS, RESTAURANTS, PUBS & CATERING

www.guysimmonds.co.uk

LEADING NATIONAL LICENSED PROPERTY AGENTS

ATTENTION VENDORS LOOKING TO SELL OR LEASE?

Guy Simmonds have purchasers URGENTLY seeking Freehold and Leasehold licensed property. • NO SALE - NO COMMISSION • FREE DISCREET VALUATION

Tel: 01332 865112

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CLH News #210 March 2018 by CLH News - Issuu