Revolution seeks ‘meaningful discussions’ with landlords amid EOTHO sales boost
According to an update published by the operator of 74 sites under its Revolution and Revolucion de Cuba brands, the Government’s Eat Out to Help Out (EOTHO) scheme drove Monday to Wednesday sales to 188.4% of last year’s takings throughout August.
While Revolution’s trading in the four weeks to 1 August yielded 60% of 2019’s figures, the four weeks to 29 August – in which the operator offered customers 50% Government funded discounts under EOTHO – saw comparable sales rise to 77.5% of 2019’s takings.
Overall, comparable sales during the eight weeks to 29 August were 72.5% of last year’s figures.
According to its latest update, these numbers exceed the best-case scenario forecast by Revolution on 5 June, which estimated venues reopening in August would deliver 55% of 2019’s sales with only marginal improvement in September and October.
As a result, Revolution has announced it will join the likes of Oakman Inns and JDW in funding EOTHO-equivalent discounts throughout September at least despite the Government-funded discount scheme officially wrapping on 31 August.
According to the Treasury’s latest figures, EOTHO saw more than 64m meals claimed with three quarters (77%) of consumers supporting an official extension throughout September according to YouGov.
What’s more, according to research by global intelligence platform Streetbees, almost two thirds (60%) of Brits who purchased a discounted meal between 3 and 31 August wouldn’t have done so had it not been for the scheme.
Ultimately, the scheme is expected to cost the Government in the region of £50m based on the Treasury’s estimates that the average discount claim will be about £5. Nonetheless, the Government has set aside £500m to fund the initiative.
Expectations ‘unchanged’
While the group has been granted rent waivers at 23 of its venues according to its latest trading update, discussions remain ongoing with landlords at 16 further sites which its board believes could reach “an acceptable outcome” before the September quarter date.
However, Revolution’s board expressed disappointment that almost half of its landlords have refused to enter meaningful discussions on rent relief.
After beginning the phased reopening of its 74-strong stable on 6 July, Revolution also revealed it had reopened 18 bars by the end of the month with 39 bars trading as of 25 August.
What’s more, the opening of a further 23 bars during between 1 and 7 September leaves just 11 venues unlikely to reopen until social distancing restrictions are relaxed.
The group has also agreed to surrender the lease of Revolution Liverpool - Cavern Quarter effective 30 September, meaning the venue will not reopen.
“Having opened two thirds of our estate I’m pleased these bars have outperformed our base case scenario assumptions, however, sales in the eight weeks since reopening commenced remain 27.5% below last year despite the assistance of the Government’s ‘Eat Out To Help Out’ scheme that finished earlier this week,” Revolution CEO Rob Pitcher said of the group’s post-lockdown performance.
“We have more openings planned during this week and next but will have 11 bars that are very unlikely to resume trading until there is a further relaxation of social distancing measures and late-night venues are legally allowed to reopen. Overall, the board’s expectations for the year ahead remain unchanged.
“We would welcome an indication from Government as to their inclination to assist in the grave issues that exist with commercial rental arrears and the moratorium that is due to end on 30 September 2020 as well as an indication of further financial support for the late-night venues sector that remains closed by Government order.“
