Young punters protect Boxpark sales from consumer slowdown
Young Londoners receiving inflation-related salary boosts has helped to protect Boxpark from a slowdown in discretionary spending, its CEO has said.
The shipping container hospitality concept has seen sales increase by double digits compared to the previous year, with London sites in East Croydon, Shoreditch and Wembley “trading really well,” Simon Champion told CityA.M.
The CEO, who took over from Roger Wade in May, said the business had “benefited from young people getting salary increases” in London, with some firms hiking wages to match inflation.
He said Boxpark’s standard customer had perhaps even benefited from the current economic climate, compared to other pub and restaurant brands with older clientele.
The company has reaped the rewards of a food-delivery trend, with the pandemic resulting in more people ordering breakfast foods from Boxpark vendors than ever before. Food delivery revenue has doubled across Boxpark’s three London sites, with its Wembley venue experiencing triple growth.
Earlier this autumn, sneaker seller JD Sports’ CFO Neil Greenhalgh said its younger customers make purchases based on “emotional decisions rather than economic ones.”
However, Champion echoed calls from the sector for a VAT call, yet stopped short at backing a reduction to 12.5 per cent.
Instead, he said slashing the tax rate to just 15 per cent would help the business from being forced to hike its prices again. A small VAT cut would also help to curb inflation and encourage investment, the CEO added.
Champion also called on the government to encourage electricity companies to offer six month contracts, to match the government’s period of support for firms.
At the moment, there was an “unequal playing field” between companies, as many suppliers were refusing to provide six month quotes.
While Champion was quick to dismiss warnings that UK operators could be forced to hike pint prices to up to £20 as “sensationalism,” he warned that many businesses will still struggle without further support.
Still, the prospect of a Christmas uninterrupted by Covid restrictions for the first time in three years and looming winter sporting occasions offers more than a glimmer of hope for hospitality operators like Boxpark.
The upcoming World Cup was set to be “bigger and better” than ever at Boxpark, with signs that waves of Londoners have already booked the first England match day off work. “I think it will be fantastic for us,” Champion added.
With the first game scheduled for a Monday, the venue stands well placed to benefit on one of its quieter trading days.
Boxpark plans to expand by around three sites a year, with sites in Bristol and Liverpool St coming soon.
The expansion programme follows the 2011-founded business cinching backing from mid-market private equity firm LDC in 2021.
“Going forward, [new sites] will be pretty even between London and major cities,” Champion said, signifying that London would be very much at the heart of Boxpark’s expansion mission.