Welcome to the May edition of Bord Bia's Ireland Market Foodservice Newsletter.
To anyone that wasn’t available to attend our Lunch&Learn webinar on Wednesday, 20th April, please note that you can access a recording of the event online HERE. David Cullen and Emily Higgins of Opinions research agency presented findings from the second omnibus wave of our Irish consumer foodservice research. We were also joined by Laura Arnold, Head of Marketing & PR with Press Up Hospitality Group
Trend of The Month
Growth in Off-Premise
The growth in off premise trade (take-away; F2G; home delivery; drive thru; dark kitchens) has been documented for some time and without a doubt accelerated as a result of Covid-19 and changing consumer behaviours.
In our second wave of consumer research that took place at the end of March, we looked to track behaviours in relation to dine at home, now that restaurants had re-opened for dine in.
What we found was that although, on average, as many as 2 in 3 consumers claimed that they were likely to use these off-premise services less, or stop altogether, younger consumers (U35) claimed that they would continue to use off-premise just as much into the future. On this basis, it is really important for restaurant businesses to develop and continue an off premise solution that can accommodate this consumer requirement and for suppliers to understand how their offering can meet the needs of off-premise.
A great example of a future-focused business is LEON, they recently announced acceleration of growth plans, with 50 openings scheduled for 2022. According to owners EG Group, new restaurants will include both traditional and new formats such as DriveThrus, smaller restaurants and Leon To Go coffee outlets. The restaurants expansion programme will also be accompanied by additional investment into digital platforms across Leon sites.
General Industry News
Inflation hits 7% in April as Ireland’s cost of living soars
The Irish Times – 12.05.2022
Irish households have been warned to brace themselves for the sharpest cost of living squeeze since the early 1980s after another significant jump in the official inflation rate. The latest figures from the Central Statistics Office (CSO) show the annual rate of price growth in the Irish economy rose to 7 per cent in April thanks – in the main – to higher energy, fuel and grocery prices. The last time inflation was higher was November 2000, but experts are warning that the peak of the current price surge has yet to come and that inflation may hit close to 9 per cent in the coming months. The CSO’s latest Consumer Price Index (CPI) detected a broad-based price rise across the Irish economy in April. The main drivers were energy and fuel. Electricity, gas and other fuels were up over 45 per cent year-on-year. Within this category, electricity prices were up 28 per cent, while gas prices rose by over 50 per cent. Home heating oil has soared by 90 per cent in just 12 months. The cost of motoring has also risen sharply, with petrol and diesel prices up 24 per cent and 40 per cent respectively. Airfares are up on average by 93 per cent since April last year.
Special 9% VAT rate for hospitality set to be extended
The Irish Times –09.05.2022
The Government is set to extend the special nine per cent VAT rate for the hospitality sector beyond its current expiry date later this year. The extension is anticipated to cost between €200 million and €250 million. The measure, which was introduced in 2020 during the Covid pandemic following intensive lobbying from the restaurant, hospitality and tourism industries, was due to expire at the end of August, having already been extended in last year’s budget. A cut to the VAT rate was initially resisted by the current coalition during its first intervention in the Covid-era economy, the so-called “July Jobs” stimulus package in the summer of 2020. But the Government introduced the measure in Budget 2021, before extending it again last year. However, with a wave of insolvencies now feared in the wake of Covid-19 and the staggered withdrawal of pandemic-era supports, the Government and the Department of Finance is now open to extending it
Quick Service Restaurant (QSR) & Pub Sector
Pret A Manger to expand into Ireland creating 500 jobs
RTE Business – 11.04.2022
Around 500 jobs are to be created across the island of Ireland by coffee and sandwich chain Pret A Manger. The company is to open up to 20 shops within the next decade, as part of its entrance into the Irish market. The outlets in the Republic and Northern Ireland will be rolled out by Carebrook Partnership Limited under a franchise arrangement. The first shop is set to open on Dawson Street in Dublin this summer, creating 25 jobs.
Krispy Kreme to open Dublin City Centre store
Checkout Magazine - 19.04.2022
Krispy Kreme has announced that it is set to open its Dublin city flagship store on 1st June at 7am. Located in the city’s Central Plaza this is Krispy Kreme’s first store in the centre of the city. The Central Plaza opening brings the Krispy Kreme store count to four locations across Dublin including Blanchardstown, Swords and Dundrum. “There was a huge reaction to our previous store openings in Blanchardstown and Swords Pavilions with people even queuing overnight to be the first through the doors," commented Declan Foley, Country Manager for Ireland, Krispy Kreme
Hotel & Restaurant Sector
The Dean Galway Opens for Business
Hospitality Ireland – 28.04.2022
The Dean Galway hotel officially opened for business on Wednesday 27th April. The Dean Galway is a 100-bed boutique hotel that is more than 5,000 square metres in size. In addition to its 100 bedrooms, the property includes Sophie’s rooftop restaurant and terrace and Dime Coffee. An Elephant & Castle restaurant, a pub called Peg’s Bar, and an event space called the Blue Room will all open at the venue as part of Phase Two of its launch in May. A Power Gym will open at the venue in the summer of this year.
Dalata confirms recovery as it opens new Dublin hotel
RTE – 28.04.2022
Ireland's largest hotel operator Dalata Hotel Group said that hotel room revenue (RevPAR) surpassed pre-pandemic levels for the first time as it expressed optimism for summer trading. Dalata reported at the start of March that RevPAR - a key measure of a hotel's top-line performance - was approaching pre-pandemic levels. It said today that for March and April RevPAR is expected to be 109% of the corresponding 2019 period. A number of Dalata's hotel rooms in Ireland are currently being utilised for other purposes, including to accommodate Ukrainian refugees, the hotel group added in a trading update. In a trading update ahead of its AGM in Dublin, Dalata said it had moved "firmly" into recovery with strong trading post re-opening across all markets after another challenging year in 2021.
Contract Catering Sector
Deliveroo quarterly sales up, but spend per order falls
RTE - 12.04.2022
Food delivery platform Deliveroo boosted sales in the first three months of the year, despite facing tough comparisons from a year earlier when restaurants were shut due to the Covid-19 pandemic. More customers placed orders during the first three months of the year, although the amount spent per order fell. Fewer, larger orders are more profitable for Deliveroo because its largest cost is its workforce of gig-economy riders.
Compass Group revenues soar to pre-Covid levels
Catering Today – 11.05.2022
The Compass Group has reported that its revenues increased 37.9% year-on-year from £8.4bn to £11.6bn in the six months ending 31 March 2022 (H1), meaning revenues are at 99% of 2019 figures with its run rate now above pre-Covid levels. The group saw growth across all sectors, and organic growth of 37.9%. This was driven by 48.4% growth in North America with revenues hitting £7.65bn and 22.4% growth in Europe with revenues of £2.76bn. Dominic Blakemore, group chief executive, said: “We continue to recover strongly from the pandemic and have achieved the important milestone of revenue exceeding our pre-Covid level on a run rate basis. “We are mindful of global inflationary pressures, which have been exacerbated by the tragic events in Ukraine. Although we expect inflation to increase and continue at a heightened level in the medium term, we have a resilient business model to help mitigate this challenge.”