Neighbourhood café-bar chain operator Loungers has revealed its sales are benefiting from the Covid-era home-working and staycation trends - but warned that it is facing short-term challenges from the "pingdemic".
Chief executive Nick Collins told the Standard the group expects to see a boost from the 19 July full relaxing of restrictions, but that it will be far from dramatic due to both the firm's policy of easing restrictions gradually to protect team members and customers, and the "pingdemic".
As Delta variant cases surge around the UK, the firm is seeing large numbers of staff at its Lounge and Cosy Club venues having to take time away from work to self-isolate after being ‘pinged’ by the NHS app.
Collins said: "I don't think we are going to see a dramatic shift from the 19th... Covid itself is still having an impact on our ability to trade. We are still seeing an increasing number of cases where our teams have tested positive for Covid, where colleagues have to self-isolate. We are still seeing a large number of our team get “pinged” by the NHS test and trace app, and that affects our ability to trade.”
He concluded: "In the short term there will be continued interruptions. Summer is going to be good, but it's also going to be tough.”
The CEO also said the ongoing hospitality staffing crisis is biting in a minority of locations - particularly in coastal "staycation locations" where it is hard to find kitchen staff and chefs, or anywhere for workers to sleep. Wages in those areas are rising due to the tight labour market, he said, but added that this is not having a material impact on the firm.
The comments came as Loungers announced on Wednesday that it saw revenues more than halve in the year to 18 April as the pandemic hit.
The firm reported £78.3 million in revenues in the period, down from £166.5 million in the prior year. Its adjusted pre-tax loss widened from £2 million to nearly £13.4 million.
But the company said that since it reopened all its sites for indoor trading on 17 May it has seen like-for-like sales up nearly 24% on 2019 levels, despite operating with Covid restrictions.
It put this down in part to flexible working driving traffic to local high streets rather than city centres, where many group venues are situated, plus the fact that millions of families are holidaying at home this summer due to the pandemic.
Collins said: "We're fortunate in many respects - we're not in big office communities, in travel hubs or big overseas tourist locations, so we have really benefited in that respect [during Covid].
"We operate in lots of small towns and secondary suburban high streets, and we are benefiting from the fact that more people are working from home... they have more disposable income because they are not commuting, so we are seeing them going out more with their children - people still need to go out for lunch or a coffee. The numbers demonstrate we are a beneficiary from that."
The CEO said the group will open 23 sites this financial year, and is on track to return to Loungers' pre-Covid target of opening 25 sites per year going forward, despite the impact of the pandemic.
The group also highlighted that its non-property net debt had reduced from £34.2 million at period end to £18.2 million at 11 July as its negative working capital rewinds.
Collins said: "It was a year which was massively impacted. Whilst revenue was down 53%, and we only traded 34% of the weeks of the year because of lockdowns. The headline for us are that when we were allowed to trade, business traded really well.
"As a business we have demonstrated that coming out of Covid, when we're allowed to trade, we've never looked more relevant and we are really excited about the future, and that is why we are looking at opening new sites."
Loungers shares were up 1% on Wednesday afternoon.