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Mon 13th Jan 2014 - Propel Monday News Briefing

Story of the Day:

Adam Fowle – 750 Tesco stores big enough for a foodservice offer: Adam Fowle, the new chief executive of Tesco Family Dining Group, has reported that there are 750 Tesco stores that have the room for a foodservice offer. Fowle, who has served as chief executive of Mitchells & Butlers and worked at Sainsbury’s during his career, told the Propel Multi-site Management Masterclass that there are 750 Tesco sites with more than 40,000 square feet of trading space and “enormous footfall”. At some point in the future each of them is likely to host some sort of hospitality offer, whether it’s a coffee shop or a restaurant, Fowle said. Asked about when the build-out is likely to be complete, he said, “We have a plan and we’re on plan”, but that it would be a mistake to put “numbers on a calendar”. Fowle, did, however, indicate that Tesco saw a big opportunity around breakfast given the number of people using its petrol stations. “If you are going to sell breakfast being by a petrol station isn’t a bad place to be,” he said. Fowle argued that companies and brands focused on wealthier consumers, who regard going out as a treat, had performed best in the recession. But mass market eating out would be given a boost in the “next few years” as “some of the wealth (being) created is passed on to the mass market consumer”. Asked about supermarket management culture compared to hospitality, Fowle told delegates: “These (supermarket) guys are so organised and implement change so quickly.” He contrasted a big brand roll-out by JD Wetherspoon of 60 or 70 sites in a year with a supermarket chain adding as many as 300 convenience stores in a year as an example. However, Fowle referred to foodservice as an “immensely impressive industry now” with companies upping their game. He praised Karen Forrester’s turn-around of TGI Friday’s and referred to the rapid retail progress of Greene King and Marston’s. “These were sleepy family brewers but not now – these companies are on the case.”

Industry News:

The first Propel Multi Club Conference of 2014 open to bookings: The first Propel Multi Club Conference of 2014, to be held on Thursday 13 March at the Lancaster London Hotel, Lancaster Gate, central London, is now open for bookings. Multi site pub, restaurant and foodservice companies can claim up to two free places each. E-mail to reserve places.

Propel to host panel at Casual Dining show: Propel Info managing director Paul Charity will host a panel of operators at Casual Dining show, the UK’s first dedicated trade event for the casual dining sector, taking place on 26-27 February at the Business Design Centre in Islington. The Propel panel will feature Brian Whiting, founder of Whiting & Hammond, Steve Haslam, co-founder of TLC Inns, Anthony Pender, co-founder of Yummy Pubs and David McHattie, chief executive of the ALMR, talking about the future of the pub within the context of the rise of fast casual dining. The panel discussion takes place at midday on Thursday, 28 February. The free Keynote programme includes previously confirmed sessions by: Alex Reilley, MD of Loungers; Andrew Guy, CEO of Ed’s Easy Diner; Peter Backman, MD of Horizons; Simon Stenning, foodservice strategy director at Allegra; Jason Katz, founding partner at Kings Park Capital; Scott Elliott, director at CGA Peach; Mark McCulloch, founder of Spectacular Marketing; and Jens Hofma, CEO of Pizza Hut Restaurants. For further information, please visit To register in advance for a free trade pass, please visit

UK leads Europe in new hotel projects: The hotel industry in the UK and across Europe is facing a positive 2014 with demand on the up from both leisure and corporate guests, transaction activity set to improve and lending becoming more easily available. Across Europe hotel development remains active with 360 hotel projects ongoing, an additional 60,000 rooms. Many are expected to open in 2014, with the balance in 2015 and 2016. A further 450 hotels (70,000 rooms) are currently at the planning stages, with the majority of projects to be found in the UK followed by Russia, Turkey, Germany and France. Global hotel consultancy HVS London said that some 45% of the new rooms under construction in Europe are in the upscale sector, rather than only the budget sectors. “There has been much talk about the growth of the budget end of the market, but operators are still keen to build prestigious hotels in key locations as consumer demand from Russia, China and the Middle East remains strong,” said HVS chairman Russell Kett. London boasts around 100 hotel projects currently at the planning stage, while there is still demand for individual properties in the capital, as well as in the provinces.

Officials pour cold water on large minimum wage rise: Officials in Vince Cable’s business department have poured cold water on suggestions that the minimum wage should rise by 50p. “Most discussions of raising wages tend to ignore any potential adverse employment effects,” said Bill Wells, lead policy official on the minimum wage. “Much of the discussion about the living wage seems to consider it is a “free lunch” with no adverse consequences.” 

Greene King chief executive Rooney Anand reiterates support for minimum pricing: Greene King chief executive Rooney Anand has re-stated his support for alcohol minimum unit pricing (MUP) amid claims by health professionals that the government was “dancing to the tune of alcohol producers”. He said: “As the UK’s leading pub retailer and brewer, Greene King recognises the industry’s responsibility to limit the negative impact on society of excessive alcohol consumption and reiterates its support for the introduction of MUP in the UK. As we have stated previously, it is our belief that, in the main, alcohol consumption in the UK plays a beneficial and socially constructive role in our society. But, the irresponsible sale of cut-price alcohol has played a significant role in negatively changing the manner in which it is consumed for some drinkers in the UK. We therefore continue to urge the government to stick to its previously announced plans to introduce MUP in England and Wales. We believe this would be an effective step in directly addressing the growing problems associated with irresponsible alcohol retailing and consumption.”

Stiff French service gives way to friendly American-style: The Times has reported that one victim of the recession has been stiff, French-style service at top-end restaurants, replaced by a friendlier American-style service approach. Tony Turnbull, The Times food editor, said: “No one wants a frock-coated Frenchman constantly to interrupt their conversation and wiggle their finger over each successive plate to introduce the dish. It’s about relaxed professionalism and I guess ‘American-style’ is as good a way of describing it as any.”

Company News:

Cafe operator Apostrophe reports lower turnover and reduced losses: Cafe chain Apostrophe Restaurants has reported turnover down to £4,002,316 in the year to the end of March 2013, compared to £6,226,444 in the year prior. The company reported turnover up 7.3% at retained sites. Losses before tax reduced to £220,243 compared to £734,090 the year before. After the year-end the company opened a large espresso bar in Canary Wharf, a store in Soho, in June and a site at Austin Friar in July. May saw the relocation of the O2 Centre site to a more prominent position. The Grosvenor Street site was refurbished in May and a pop-up opened in September in the reception of Grey London, a subsidiary of WPP. In June 2013, the company closed its concession on Tottenham Court Road after its landlord went into administration and shut a kiosk at Broadgate Circle as the landlord exercised a redevelopment clause. The company added: “In October we launched a major product development project tasked with redesigning our menu to better suit changing consumer tastes and preferences. It is expected the new menu will be launched at selective stores by April 2014. Trading growth in the current financial year had a strong start but stalled since September 2013, with wide variations among stores. While overall, the new and refurbished stores are trading satisfactorily, our Soho’s store performance has been significantly below our expectations. We are currently evaluating our options with respect to this store.” Distribution and administrative costs dropped to £488,850 from £835,047 the year prior, when there were legal costs linked to the sale of 50% of the business to CH & Co.

Convivial London Pubs reports £4,312,502 profit on sale on assets: Convivial London Pubs, which is to go into voluntary winding up today after the sale of its seven London freehold pubs, made a profit of £4,312,502 on the sale of its assets through agent Christie + Co. The company reported turnover of £5,572,431 in the period between 29 September 2012 and 20 December 2013. Profit before tax was £2,803,600. A total of £2,029,135 was invoiced in the period by Eclipse Business and Management Services, a company of which Convivial managing director Kris Gumbrell is a director, for management fees and termination reward. Accounts show the sale of “tangible fixed assets’ had raised £19,857,501 and the sale of an investment property had raised a further £826,837. Mitchells & Butlers bought four of the company’s sites in a deal that was completed last month. 

D&D signs King’s Cross deal for opening in 2015: Quaglino’s operator D&D London has signed a deal to convert England’s first purpose-built gym, the 19th century German Gymnasium at King’s Cross, into restaurants, bars and private dining rooms. When the 10,000 square feet development is completed in Spring 2015, the Grade II listed site opposite St Pancras station will house a 150-cover brasserie, a second, smaller restaurant, a bar, private dining room and outdoor terrace seating up to 70 people. The opening will be the biggest by D&D London since it was acquired by LDC, the private equity arm of Lloyds Banking Group, last April. Chairman Des Gunewardena said: “We have watched and admired King’s Cross coming to life and are very excited to become a part of it.”

Wabi owes unsecured creditors £2,960,000: Wabi, the Japanese restaurant that went into administration in June last year, owes unsecured trade and expense creditors £2,960,000. An administrator’s report filed last week stated no payments will made to creditors because of unsufficient realisations.

Hall & Woodhouse secures £20m loan: Dorset-based brewer and retailer Hall & Woodhouse has secured a £20m loan from M&G, the investment manager, The Sunday Times has reported. The money will be used to expand the company’s pub estate.

Mitchells & Butlers ‘oversight’ closes Northern Ireland’s most famous pub: An oversight by Mitchells & Butlers has closed temporarily The Crown Bar in Belfast, regarded as the architecturally finest pub in the United Kingdom, and probably the most famous bar in Northern Ireland. The pub, which is owned by the National Trust but leased to M&B since 2006, put up the shutters after an “oversight” meant a permit to sell alcohol, believed to have expired in November 2012, was not renewed, leaving the pub operating without a licence for more than a year. A National Trust spokesman said: “All statutory obligations, including the renewal of licences, rest with the tenant. We are very concerned to learn about this oversight and we encourage the tenant to seek a speedy resolution to this issue to ensure this historic building is reopened to the public as soon as possible.” Colin Neill, chief executive of Pubs of Ulster, the Northern Ireland licensed trade association, said: “This is an unfortunate oversight by the licensee, Mitchells & Butlers. We are aware that they took the appropriate course of action as soon as the issue came to light and have decided to close their doors until this issue is resolved. This is not an ideal situation, as The Crown Bar is one of Northern Ireland’s most iconic and historically important pubs.” A new licence application hearing takes place on January 17. The National Trust purchased the property in 1978 and restored it to its full Victorian splendour, when it served travellers just off the train at the old station nearby. It is famous for its period gas lighting, church-style stained glass windows, cosy wooden snugs and mosaics of tiles. The ten snugs, lettered from A to J, contain gunmetal plates for striking matches, and an antique bell system, once common in Victorian pubs, for customers to alert bar staff that they needed serving.

Giggling Squid to open ninth site next month: Thai tapas chain Giggling Squid, headed by Andy and Parnee Laurillard, will open its ninth site next month in Marlow. The brand has taken over the former Pachanga’s building on West Street and had previously hoped to have the site opened by Christmas. The new Giggling Squid is now expected to open on 11 February.

Gloucester councillors approve city’s 12 Costa Coffee – a drive-thru: Gloucester councilors have given the go-ahead to the city’s 12th Costa Coffee – a drive-thru at the Railway Triangle. The coffee chain is to open a drive-thru branch next to the roundabout leading to the new Morrisons supermarket. The Metz Way development called Triangle Park, formerly known as the Railway Triangle, could also pave the way for a new bar and restaurant – and even a takeaway – alongside four other light industrial units.

Whitbread raises £2m for Great Ormond Street: Fundraising efforts organised by Whitbread Hotels and Restaurants have now raised £2m for Great Ormond Street Hospital Children’s Charity since May 2012, the company has revealed. The money, £1m of which has come in since June, has been raised through donations by customers on the Premier Inn website as well as though a wide variety of activities undertaken by the company’s employees across the UK. The fund-raising activities include skydives in Leeds, car boot sales in Epsom, family fun days in Newcastle and a 15-mile trek in Blackpool. 

Moody’s changes Enterprise debt rating from negative to positive: Ratings agency Moody’s has changed the rating outlook for pub operator Enterprise Inns to positive from negative. The changes apply to the company’s B3 corporate family rating, the Caa1-PD probability of default rating and the B2 instrument rating of the £275m of senior secured fixed-rate notes due 2031. Moody’s said it changed the outlook on Enterprise Inns’ ratings to positive because the value and saleability of the company’s assets have been proven in a stressed environment, thereby enabling the company to address liquidity concerns in a timely manner. In addition, the company has again reduced leverage further in the financial year to the end of September to 8.2x and has maintained a fairly stable Ebitda margin over the past four years, despite the contraction in like-for-like net income. The agency said it expected that the recent uplift in consumer confidence would translate into an improvement of Enterprise Inns’ financial metrics in 2014. In addition, analysts at Enterprise Inns’ house broker, Deutsche Bank, reaffirmed their ‘Buy’ rating on the company’s stock in a note issued to investors on Friday. They currently have a 205p price objective on the stock, indicating a potential upside of 29.66% from the company’s current share price.

Kirman doubles up in Hull: Hull entrepreneur Lee Kirman is to bring Hull’s oldest domestic building back to life as a bar and bistro. Kirman, who also runs The Minerva bar at the Marina, has opened up the venue, called The Old House, in Scale Lane, which dates back to the 13th Century. Hull City Council’s planning committee approved the plans this week, which means it will be full steam ahead for Kirman. He said: “We are delighted to get planning permission for the bar and bistro. We are looking to sell a range of craft beers with a large variety of both local and global brews. We will also have a bistro upstairs providing the likes of pulled pork, gourmet burgers and cold meat platters.”

Belhaven shuts pub for three days a week: Belhaven Brewery is shutting a pub in the Scottish town of Ayr for three days a week throughout January. O’Briens, an Irish-theme pub, sited opposite Ayr railway station, is one of the town’s most popular weekend bars, with a 2am licence for Friday and Saturday nights. However, for the whole of this month it will only open Thursday to Sunday. A spokesman for Belhaven, which is owned by Greene King, said: “O’Briens will be closed Monday to Wednesday throughout January to allow us to focus and invest on the days and nights our customers enjoy the most, including live music events. Customers will be delighted to know that it is business as usual for the remainder of the week, and we look forward to seeing them then.” The move has been greeted with concern by local publicans. Forbes Robertson, who owns The Nineteenth Hole pub in the town, told The Daily Record newspaper: “It wouldn’t surprise me if we started moving back to 10pm closing. People are increasingly drinking in the home and pubs can’t compete.”

Amber Taverns acquires first Carlisle pub: Amber Taverns, the Blackpool-based operator of freehold community pubs, has acquired The Caledonian pub on Botchergate in Carlisle. The company, owned by LGV Capital and led by James Baer and Bryan Wardman, intends giving the pub, which closed last year, a £450,000 refurbishment, reopening it in April as a “community” bar specialising in serving craft and cask beers and providing sports coverage on HD televisions. Wardman told the local News and Star newspaper: “We’ve been looking for sites in Cumbria, and particularly Carlisle, for some time. The pub is on an existing drinking circuit and we like to be on the circuit rather than stuck out on a limb.” Wardman said he had been “walking up and down Botchergate” looking for opportunities for a number of years. “The Cally gives us the opportunity to bring back a really good traditional pub,” he said. “We’re also good with sport. Our pubs have several sports channels, racing channels and Sky Sports. Everything will be wired up to HD, the quality will be really, really good.” Amber plans to carry out work on the outside of the pub as well as refurbish the interior. Builders are expected to start on site near the end of this month. Amber now runs more than 90 outlets across the north of England.

Brewer attacks ‘Dry January’ drive: The campaigns to encourage an alcohol-free January could hit jobs in the leisure sector, a brewery boss has warned. David Grant, who runs Moorhouse’s, the Burnley-based brewery and pub operator, criticised “do-gooders” for promoting abstinence for the month of January. He said: “Yes, many pubs have enjoyed a good Christmas. But there are still some 20 pubs closing each month and publicans do not need a January black hole. Pubs are part of our heritage and the best place to drink sensibly and socialise in a secure and controlled environment. We should all encourage that. Do the do-gooders not realise that the leisure industry is the largest employer in the country? If they persist in this sort of campaign pub and restaurant staff could be laid off as the December trade boost is lost in January.” Moorhouse’s said it had sold 8% more beer in December 2013 compared to the same month in 2012, and topped 1,700 barrels. Its special festive beers saw growth of 55%, while the brewery also recorded a 35% rise in sales for its bottle range, sold through leading supermarkets. The company’s fastest growing brand, Blond Witch, grew sales by 13%. Grant said: “It was a good festive season. Our sales with pub companies have greatly helped the seasonal specials. The year ahead will be challenging as we compete against the every increasing number of micro-brewers. But we are confident that the growth strategy we put in place in 2013 will yield positive results for the success of our new brewery.”

Police apply to revoke Crawley nightclub licence: Sussex Police has submitted an application to Crawley Borough Council to have nightclub JJ Whispers’ licence revoked. The police report there have been incidents of drunkeness, sexual assaults and drunk and disorderly behaviour within the premises and in the immediate area. A hearing will take place at Crawley Borough Council in March. The nightclub in Crawley High Street will remain open for now.

Brewery offers pubs own-brand cask ale: A brewery in Devon is offering pubs in the county their own tailored and branded traditional cask ale. Paul Stewart-Reed, head brewer at Clearwater, established in 1998 and based in Bideford, said: “There are so many different beers coming from large and small brewers that we decided it was appropriate that landlords had the chance to have a beer brand of their own. We have already had a couple of successful trials and now we would like to extend the offer Devon-wide.” Clearwater supplies its Devon’s Own range to 250 outlets. Its tailored beers were trialed successfully at The Westward Arms in Westward Ho! and The Instow Arms in Instow, North Devon, which opened in the village in 2010. Landlord Martin Seymour said the pub’s specially tailored beer, High Tide, a smoky, smooth, chestnut traditional cask ale, had proved a hit with drinkers. He said: “Over the summer, the beer has gone down very well with our customers who like the fact that the pubs have their own beer. High Tide is also used to sponsor the tide boards outside my pubs, and this cooperation highlights the best of two local businesses working together to meet customers’ needs.”

Ruby Tuesday says goodbye to 30 outlets: The American casual dining chain Ruby Tuesday, which has two outlets in the UK, has announced it intends to close 30 of its 779 restaurants as losses at the company widened and customer numbers continued to fall after several quarters of falling like-for-like sales. It revealed a net loss in the quarter to December 3 of $34.7m, up from a loss of $4.2m for the same quarter in 2012, as revenue for the quarter fell 7.9% year-on-year to $276.2m. Guest numbers fell 6.9% in the quarter, a slowdown from the 10.8% drop in customer numbers in the previous quarter. Like-for-like sales at company-owned restaurants fell 7.8% in the quarter to December 3, and 5.3% at franchised units in the United States. However, the company’s new chief executive, James “JJ” Buettgen, who took over in October, said like-for-like sales improved in the last two months of the quarter. “Our company-owned same-restaurant sales, which were down 7.8% for the second quarter, showed improvement over the first quarter results as our new product news, improved operations and brand-building TV advertising began to have a positive impact,” he told analysts. The chain cut 70 jobs, mostly at its restaurant support centre in Tennessee, in November, and in December it was reported that Ruby Tuesday had hired the investment bank Goldman Sachs to explore strategic alternatives, including a leveraged buyout. Its UK restaurants are in the St David’s Shopping Centre in Cardiff and The Brewery in Cheltenham. It also has 37 outlets in 11 other countries, including Chile, Egypt, Honduras, Hong Kong, Iceland, Kuwait, Romania and Saudi Arabia.

Thistle Pub Co to open Edinburgh bar/restaurant: Thistle Pub Co, which currently owns seven outlets in Scotland, is to open a bar restaurant called Clark’s on South Clerk Street in Edinburgh. The premises were previously a Chinese restaurant called Dragon Way. The new operation will have a ground floor bar and restaurant area, with a bigger dining area occupying the basement. Thistle’s estate of pubs includes The Steading in Edinburgh, The Clockwork Beer Company in Glasgow, The Dog House in Balloch, Loch Lomond and The Wheel Inn in Scone. The pubs are managed by Maclay Inns of Alloa.

Shepherd Neame in shake-up: The Kentish brewer and pub operator Shepherd Neame has brought in some of the changes it announced in 2013. Tom Falcon, formerly the company’s production and distribution director, has resigned and Graeme Craig, formerly sales and marketing director, has become director of brewing and brands. Robin Duncan, formerly head of HR, has taken the role of company secretary in combination with his previous duties. Nigel Bunting, currently retail director, is due to become director of retail and tenanted operations, with effect from July 2014. Shepherd Neame announced a re-organisation of two trading divisions, Brewing and Brands and Retail and Tenanted Pubs, in July last year. The company’s chairman Miles Templeman said: “I would like to thank Tom for his significant contribution to the board. This reorganisation is a significant change for the business and was decided upon after very careful consideration of our options.”

Champions Catering takes first site: Champions Catering has taken its first site, a free-of-tie lease on The Carpenters Arms in Cambridge through property agent Everard Cole. Champions Catering has been set up by Mike Champion, named “Front of House Manager of the Year 2013”, formerly of The Red Lion, Hinxton and Black Bull, Balsham. The site was a former Punch Taverns turnaround disposal.

Stonegate names new Slug & Lettuce boss: Stonegate Pub Company has appointed Clare Staples to head up Slug & Lettuce, Missoula and Living Room. Staples’s experience within the hospitality sector spans 17 years with the Gondola group and includes her most recent role as head of operations south for Ask restaurants. Staples took up her position within Stonegate on Monday, 6 January.

Patisserie Valerie to open in Exeter: Patisserie Valerie is to open in Exeter having secured 194 High Street, formerly occupied by menswear retailer Nicklebys and more recently open as the first John Lewis pop-up shop. The asking rent was £85,000 per annum. Damian Cook, of Stratton Creber Commercial, who negotiated the letting, said: “Patisserie Valerie coming to Exeter is excellent news, offering even more choice for shoppers and those visiting the city.” It is expected to open next month.

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