Yahoo Finance Loungers chief calls for government to back high streets with business rate break
The chief executive of the fast-growing neighbourhood bar chain Loungers called for an extension to business rates relief today as the London-listed company reported record sales and profits.
Nick Collins told the Standard: “The hospitality sector generally pays an unfair proportion of the business rates bill, 10% of the overall amount when our revenue represents only 3%."
He added: "We invest in sites and high streets and are then penalised. I think that the most important thing is that the relief which is due to expire at the end of tax year is continued.”
Loungers is known for revitalising the high streets of smaller towns and suburban areas, moving into old banks and other disused retail space and transforming properties into the kind of fresh, interesting space that can help drive traffic through the area.
The company opened 36 new bars in the year to 21 April, creating 1,200 new jobs, mainly in smaller town centres. It now has 226 venues open under its main brand. It was founded in 2002 by three friends – Alex Reilley, David Reid, and Jake Bishop – who saw a gap in the market for an all-day venue they would want to visit.
Their bars are designed to blend elements of the traditional pub, coffee shop culture and a restaurant level eating out experience. Food is served from 9.00am to 10.00pm. Each one has an individual name and is designed for the local area, but with what the company calls a “home-from-home” feel.
Collins said today it was becoming “easier and easier” to find the right kind of property for the company’s fast-paced expansion, even in the south east.
“We’re seeing more banks come into the market, and they make great Loungers. They are typically really beautiful heritage buildings with lots of high ceilings and lots of period features we can work with. And they tend to occupy really prominent positions”.
He added: “We expect to open around 35 more sites in the current year”.
Backing plans from the Labour government to reform rates and the apprenticeship levy, he also said the firm did not have a problem with the rises in the minimum and living wages, and with interest rate cuts on the way from the Bank of England, “anything that puts more disposable income into pockets is a good thing.”
Loungers breakfast is the most popular menu item, with seven million served last year. Six million pints were poured.
The company reported annual revenue of almost £354 million today, up almost a quarter, and profit crossed above £11 million, up 56%.
Collins also said that the effect of high inflation was easing from the company’s numbers, with margins heading back to pre-pandemic levels. He hopes that the recovery from Covid will continue to revitalise town centres, and not just via bigger chains like his own.
He also backed the return of smaller operators to the high street, saying “the government needs to create a tax environment which really encourages that”, adding:
“One of the great things that we see is that there are more and more individual owner operators opening, in locations where they wouldn’t have been able to a few years ago, because they wouldn’t have been able to get the property. We want that to continue”
In late trade in London on Tuesday, Loungers shares added 5p to 289p, putting them around their highest level in a year.
