Latest / Hospitality News Briefing / Friday 2 October: Hospitality tax burden hits 82% of profit as trade bodies warn of job risks
Transcript
- Good morning. This is the Hospitality News Briefing, from Ops Club. Episode eleven, Friday the second of October. Here is what the UK trade press reported this morning, collated for operators. New research shows hospitality pays the highest tax burden in the United Kingdom, while major deals see Luke Johnson exit Tortilla and Valiant Pub Company reach one hundred and three sites. First, the numbers. The Morning Advertiser reports that Valiant Pub Company, founded by the Hawthorn Leisure team, saw revenue jump forty five per cent to forty two point nine million pounds in the year to March. Profits at mature sites rose fifty six per cent, and the group has secured thirty four million pounds in bank facilities to fund a shift toward larger, food-led pubs with rooms. It is a sign that the operator-managed model remains strong when focused on community assets with multiple income streams. London-based Farmer J has seen turnover pass forty one million pounds, up from twenty seven point nine million, according to Propel Hospitality Info. The brand opened four new sites and is seeing strong delivery demand. With a new New York site beating targets, the group aims for thirty locations across both markets by the end of next year, proving that high-volume lunch trade is still a major growth engine. Three quick updates from Propel. Village Hotel Club has returned to profit, posting three point three million pounds after a previous twenty three point five million pound loss, while spending forty five million pounds on expansion in Leicester, Cheshunt, and Milton Keynes. Big Easy reported revenue of thirty six point nine million pounds and a pre-tax profit of one point one million, as it prepares for its Manchester debut. Finally, Yorkshire-based Thomas the Baker has issued a profit warning; while twenty twenty five beat budgets, twenty twenty six sales are being hit by heatwaves and rising wages. On to who is buying what. Veteran investor Luke Johnson has exited his three point six per cent stake in Tortilla for roughly nine hundred and ninety four thousand pounds, having only bought in last February. As Propel reports, the stake was bought by the team behind OCO Westend, a major Starbucks operator looking to diversify into Mexican fast-casual. It marks a significant vote of confidence in Tortilla, which recently saw nineteen point four per cent like for like sales growth in the UK. Elsewhere in acquisitions, Whitbread has purchased two Future Inns in Bristol and Plymouth, adding nearly three hundred rooms to the Premier Inn network. Also, Red Oak Taverns has bought two pubs from Everards, taking its total estate to two hundred and fifty sites. Those reports come from Propel. Looking at new openings, the Barrafina owners, Harts Group, are pivoting their strategy. The Caterer reports they are replacing Parrillan in Borough Yards with Los Primos, an all-day Spanish bar focused on snacks and beer. CEO Sam Hart noted that customers are wary of high prices, so the new model targets a sub-ten pound sandwich and wine offer. It is a clear admission that even premium London locations are feeling the consumer pull-back. In other opening news, Amber Taverns has made its Wiltshire debut in Salisbury, converting a former Pizza Hut into a sports and karaoke pub. Meanwhile, Ottolenghi launches its first Scottish site in Edinburgh today. Propel and The Caterer have those details. A few moves to note. McDonald's UK has promoted Danielle Harris to Chief People Officer, replacing James Thorne who moves to a global role in the United States. Also, Northumberland hotel Wildhive Eshott Hall has recruited Ewan Taylor, formerly of The Fife Arms, as its new General Manager. These are reported by Propel and The Caterer. Finally, the bigger picture on costs. The Morning Advertiser reports that the hospitality tax bill has reached eighty two pence for every one pound of profit. New analysis from UKHospitality and the B R C shows the sector faces a tax burden double that of the banking industry. When business rates, national insurance, and V A T are combined, the bill equals eighty two per cent of pre-tax profits. This data is being used to lobby the Chancellor for a rates overhaul in the upcoming Budget. Over in the markets, Langton Capital reports that US inflation cooled to three point four per cent in August. Closer to home, gilt yields hit their highest levels for twenty five years. The ten-year gilt yield, which is what it costs the government to borrow for a decade and influences commercial lending rates, reached five point four three per cent this week. One last note from The Caterer: Hackney Council is currently investigating hygiene and food safety standards at the Soho House site in Shoreditch. Three things to think about before you get on with the day. If one of the most successful premium operators in London is launching a sub-ten pound beer and snacks concept to combat bill shock, do you need to look again at your entry-level price points? With business taxes now effectively swallowing eighty two per cent of pre-tax profit, how many of your sites would remain viable if the current rates relief is not extended in the October Budget? Travelodge's security failure came down to staff handing out keys without I D - when did you last mystery-shop your own front desk or check-in process to see if your safety policies actually happen on the floor? The full rundown is at ops dash club dot com, where every story links back to the publication that reported it. Today's pulled from Morning Advertiser, Propel Hospitality Info, The Caterer and Langton Capital - a signpost to their reporting, not a replacement for it. Scripted and read by AI and published without a human check, so check the original before you act on anything. For longer conversations with the people running the sector, find the Hospitality Ops Club podcast. That is your briefing. Have a great day.