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Tue 3rd Jul 2018 - Propel Tuesday News Briefing

Story of the Day:

Boston Tea Party ‘looking at the bigger picture’ as it reports 24% hot drink sales drop following coffee cup ban: All-day casual dining cafe Boston Tea Party said it is “looking at the bigger picture” as it reported a 24% drop in hot drink sales compared with last year after introducing its disposable coffee cup ban last month. The company said the ban had saved more than 17,500 cups from going into landfill while it will hold a workshop at the end of the month to explain how it is making the ban work. Customers taking away hot drinks must now do so in a reusable cup. In addition to people bringing their own reusable cups, Boston Tea Party has sold more than 7,500 reusable cups – an average of 130 a day across the company’s 22 sites. Since the ban on 1 June, Boston Tea Party has opened a cafe in Chichester, West Sussex, which became the first of its sites to open entirely without single-use coffee cups. The company previously said it risked losing more than £1m in takeaway hot drinks sales. Owner and managing director Sam Roberts said: “We always knew we would see a drop in takeaway coffee sales with the ban. Being the first to make the move means if customers choose not to get behind it there are still plenty of competitors using disposable cups. We did this because it’s the right thing to do, not the easy option. This is the start of the story for us. We’ve had calls from cafes and coffee chains asking us to guide them through a ban – and that is the real success story here. We can’t solve this problem on our own we’re on the hunt for organisations, however big or small, to help this campaign gather momentum.” Boston Tea Party’s operator workshop will take place on Tuesday, 31 July in which those in the industry can learn more about how the company has managed to make the ban work from an operational and commercial perspective.

Industry News:

Brand strategist Ian Dunstall to feature in next video for Premium subscribers: Top brand strategist Ian Dunstall features in our next video for Premium subscribers, which will be sent out this Friday (6 July). In his presentation, he talks about designing and evolving a brand that is loved – offering ten key insights. Dunstall has conceived, built and advised numerous market-leading brands during the past 30 years. In this session, he outlines how inspirational leaders he has worked alongside have navigated difficult times to launch, sustain and evolve brands that are loved by employees and guests alike. Premium subscribers now receive weekly video recordings of key speakers from Propel events and conferences – the past three featured sector investor Luke Johnson, City Pub Company founder Clive Watson and Coaching Inn Group founder Kevin Charity. Propel Premium subscribers also receive their morning newsletter 11 hours early at 7pm the evening before our 6am send-out, access to our database of 1,100 multi-site companies and receive discounts to attend Propel conferences and events. Propel managing director Paul Charity said: “We plan to compile an invaluable library of senior leaders and advisors offering insights and advice, a resource Premium readers can tap into.” An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email to sign up or call her on 01444 817691.  

Nominations invited for Wireless Social Female Entrepreneur of the Year: Which female entrepreneur has most impressed you in the past year? Propel is inviting nominations for the Wireless Social Entrepreneur of the Year, which will be presented on Tuesday, 4 September at the end of the Women’s Entrepreneur Conference. Readers are invited to sent their nominations to Propel managing director Paul Charity at

Food delivery helping restaurants ‘counter drop in footfall’ during World Cup: A surge in popularity for food delivery is helping restaurants counter a drop in footfall during the Fifa World Cup, according to a new survey by Deliveroo. With fans glued to their television screens or watching games at the pub, restaurants have traditionally seen a fall in custom during events such as the World Cup. A poll of Deliveroo’s restaurant partners found half tend to see fewer customers visit their restaurants during major sporting events. However, the company said three-quarters (75%) of the same partners expect a rise in delivery orders during the World Cup to offset any fall in business. Deliveroo said orders via its app rose on average by 25% in the hour before each of England’s group-stage matches. Deliveries peaked 15 minutes before kick-off as fans prepared early to avoid missing any of the action. England’s final group match against Belgium was Deliveroo’s busiest dinner service for a Thursday night. The Monday night game against Tunisia was the fifth-busiest Monday for Deliveroo – excluding bank holidays – while the match against Panama was the company’s fifth-busiest Sunday lunch. Orders of beer, wine and spirits also rose by between 20% and 25% on match days. Deliveroo UK and Ireland managing director Dan Warne said: “In previous World Cups restaurants, much like England fans, used to prepare for the worst as football fans opted to stay at home or head straight to the pub to enjoy the games. As more people choose to order their favourite dishes through Deliveroo, we believe restaurants have every reason to look forward to the next World Cup, Olympics and Wimbledon.”

Number of restaurants in financial distress rockets 143% as more turn to CVAs: The number of restaurants in financial distress has rocketed by 143% in the past six months as more businesses turn to the Company Voluntary Arrangement (CVA) to curtail losses. Data by magic circle firm Linklaters showed during the period there were 12 CVAs, which allow a company to restructure its estate, compared with 17 during the whole of 2017. Examples of restaurant companies triggering the CVA include Jamie’s Italian, better burger brand Byron, Carluccio’s and Prezzo. Linklaters restructuring and insolvency partner Richard Hodgson said the restaurant sector was suffering from a “stranglehold” caused by a number of factors including oversaturation of the market. He told City AM: “A number of chains expanded rapidly to the point supply has raced ahead of demand. Couple that with increased food prices, staff costs and business rates, owners are looking at where they can reduce costs to put the business on a more sustainable footing.” The increasing use of CVAs prompted the British Property Federation (BPF) last month to call on the government to review the CVA system. Ian Fletcher, BPF’s director of real estate policy, said some CVAs were seen by landlords as “simply lease-stripping exercises”. Linklaters real estate partner Simon Price said: “When used successfully, CVAs can lead to businesses being saved and therefore fewer property vacancies. However, their use has become much more widespread and is therefore having a more significant impact on landlords than was perhaps originally conceived. As a result, we have seen some resistance and pressure from a number of landlords this year calling for the government to reform the system.”

Traveller Movement meets with JD Wetherspoon chiefs to raise awareness of discrimination: Representatives of The Traveller Movement and the Equality and Human Rights Commission (EHRC) have visited JD Wetherspoon’s head office as part of a campaign to raise awareness of the discrimination some Irish travellers and gypsies face in accessing pubs, bars and restaurants despite their protected status under the Equality Act. A presentation was given to the company’s senior management drawing attention to difficulties encountered by members of the traveller and gypsy community to the extent “many feel it necessary to hide their background”. Wetherspoon chairman Tim Martin said: “We were pleased to welcome representatives from The Traveller Movement and Equality and Human Rights Commission at our head office. We have been working closely with the EHRC and The Traveller Movement in developing our employee training on this issue and support the campaign.” The Traveller Movement equality and social justice unit manager Jim Davies added: “Being refused entry or service is a problem that blights the lives of gypsy and traveller people throughout the country. This form of discrimination should not be tolerated in any civilised society so it is heartening to see an industry leader such as Wetherspoon taking such a positive stance on the matter. The Traveller Movement commends Wetherspoon for its efforts in raising awareness of this issue.”

Company News:

Mash Inns reports £1m sales in first full year: Mash Inns, the joint venture between Laine Pub Company and Enterprise Inns’ Managed Investments segment, has reported sales of £997,000 in the year to 24 September 2017 – the company was incorporated on 17 February 2016. It made an operating loss of £52,000 and a loss before tax of £110,000, according to accounts filed at Companies House. Mash Inns opened its first site – the Ladywell Tavern in Lewisham, south London – in December 2016 followed by its second – The Albion in Hove – in early 2017. In February this year, the company added The Branch Tavern in Brighton to its portfolio after signing a 25-year lease and then the St George’s Inn in Brighton under a 25-year operating lease in April. In their report accompanying the accounts, the directors stated: “The loss before tax for the year amounted to £110,000 (32-week period ended 30 September 2016: £11,000) primarily due to administrative costs incurred establishing the business operations. The directors do not recommend the payment of a dividend.” Ei Group currently has ten managed joint-venture partnerships.

Pret launches apprenticeship scheme that offers fully funded undergraduate degree: Pret A Manger has launched an apprenticeship scheme that gives candidates the chance to complete a fully funded undergraduate degree in business management at Manchester Metropolitan University. The company is offering the opportunity as it bids to find its “future leaders”. The apprenticeship is split into three stages. In the first, apprentices graduate as a team member with a hospitality team member Level 2 Apprenticeship Standard after one year, having worked in a shop, met suppliers, attended industry events and learned about key strategic areas for the company. In the second stage, apprentices will become a leader and work in shops to gain a hospitality supervisor Level 3 Apprenticeship Standard, working towards becoming an assistant manager or general manager, managing large teams in shops. The final phase is a flexible two to four-year programme, in which apprentices will become a manager of their own Pret shop and achieve Level 4 and 5 Apprenticeship Standard. This is the stage where apprentices have the opportunity to complete a BA business management undergraduate degree at Manchester Metropolitan University. Pret director of people Andrea Wareham said: “We are delighted to launch an apprenticeship programme that focuses on building management skills, helping those involved to grow their careers and take advantage of the many opportunities we offer.” Applicants must be 16 or over and there are 120 places available.

Fine & Country Inns opens eighth site after taking on second with Star Pubs & Bars, plans further growth: Fine & Country Inns, run by Gary Hunt, has opened its eighth site after taking on its second with Star Pubs & Bars – and is planning further growth. The Masons Arms in the village of Thorpe Hesley in South Yorkshire has received a £430,000 investment to turn it into a “quality traditional pub” with a focus on food. A new alfresco area has been added including seating for about 100 people and three beach huts equipped with heating, lighting and phone chargers. On the inside the pub, which dates to 1878, features new panelled walling and original features – including old brickwork, a fireplace and a bay window – have been revealed. Two dedicated areas to its past have been created – the Wentworth and Thorpe Hesley rooms, which display old photographs and memorabilia. The menu ranges from traditional pub favourites to modern British cuisine while there are craft and cask ales alongside barista-quality coffee. Fine & Country Inns is committed to further expansion in Yorkshire and neighbouring northern counties. With a 40/60 wet/dry sales split, the company is interested in rural, suburban and village pubs that have the potential to be developed into food destination venues. Hunt said: “We have no upper limit or barrier to growth, we are simple considering every opportunity on its merits. While leaseholds have allowed us to expand more quickly, we are now looking for leasehold and freehold venues, as freeholds will create long-term investment value in the group. We are also working on a six-bedroom boutique hotel with a fine-dining restaurant and a bistro wine bar so this will open up opportunities for us in the hotel sector.” Mick Howard, Star Pubs & Bars operations director for the north, added: “Fine & Country Inns’ attention to detail and vision is phenomenal.”

Adventure Bar to open seventh London site, in Shoreditch: Adventure Bar, the London cocktail group led by Tom Kidd, is to open its seventh site in the capital, in Shoreditch. The move follows a £1.4m debt finance deal from OakNorth, bringing the bank’s total lending to the group to £3m in three deals since 2015. As well as the Shoreditch launch – in Hoxton Square at a site formerly occupied by Barworks’ Electricity Showrooms – the latest loan will be used to refurbish a site in Covent Garden. Kidd said: “Shoreditch is a popular choice among young professionals and therefore an ideal location for our next site. We’re delighted to once again be working with OakNorth to fund our expansion. We appreciate all the support they’ve given us over the last three years and look forward to continuing to work with them as we grow.” Deepesh Thakrar, senior debt finance director at OakNorth, added: “Adventure Bars was one of our first clients when we launched in September 2015 so it has been a privilege to see the group expand from its three sites then to the seven it has today. The team works brilliantly together and has developed a proposition that is proving to be extremely popular with Londoners and tourists alike. All sites are profitable including their two sites in Waterloo, which are less than a year old.” The company operates two Adventure Bars in Clapham and one in Covent Garden alongside The Escapologist in Seven Dials, Bar Elba and Tonight Josephine in Waterloo, and an après-ski bar in Courchevel, France.

Chinese hot pot chain Hai Di Lao to make European debut, at Piccadilly Circus: Chinese hot pot chain Hai Di Lao is to make its European debut by opening a site at the Trocadero in Piccadilly Circus. The company has agreed a new 15-year lease and will occupy a site totalling almost 10,000 square feet. The flagship London restaurant will follow the recent launch of a site in Time Square, New York, one of 310 venues the brand operates worldwide. The West End site will have direct links to Piccadilly Circus tube station and sit beneath a 700-bedroom hotel with rooftop bar. Richard Thomas, associate director in the leisure team at Savills, which advised the Chinese company during the deal, said: “Hai Di Lao is a globally recognised brand with fans of the concept worldwide. It is testament to London’s reputation as a foodie capital that it has chosen the city as its first European destination. The chain already has its sights set on expansion in the UK and across Europe and we are very pleased to have secured this prime spot for its flagship restaurant.”

Deckers repositions business to move focus away from hotels: Deckers Hospitality Group, which owns hotels and restaurants across Greater Manchester and West Yorkshire, has repositioned itself to focus further on the wholesale side of the business and less on the retail sites. The move led to the company putting the Royal Toby Hotel and Crimble Hall restaurant near Rochdale and Best Western Pennine Manor Hotel in Huddersfield on the market for £8.7m through agent Savills. Accounts filed at Companies House showed The Crimble restaurant was sold in April this year while the Pennine Manor Hotel is presently in a period between exchange and completion. The company decided to take The Royal Toby Hotel off the market and plans further investment in 2019 in the site. During the year, Deckers invested about £250,000 to refurbish the property, including the main restaurant and bar area, which helped sales increase 4.9% year-on-year despite the restaurant being closed for five weeks. Gross margins at The Royal Toby have moved forward, being 72.1% (2016: 71.6%), “reflecting the strong hotel results”. For the year ending 30 September 2017, turnover fell 0.5% to £41,331,538, compared with £41,540,081 the year before. Pre-tax profit was down 7.1% to £260,454 compared with £280,391 the previous year. Ebitda fell slightly to £734,864, compared with £758,066 the year before. The group had cash of £2,567,970 at the year-end and said that maintaining plentiful cash availability to take advantage of key buying opportunities was an important part of company strategy. The group repaid bank loans of £501,316 during the year. Net assets increased 2.4% to £5,418,061, compared with £5,291,296 the year before.

Craft beer and whisky demand drives malt company’s pre-tax profits increase: Essex-headquartered malt company Bairds has seen profits increase with craft beer and the whisky industry driving increased demand for malt. The company, which operates five production facilities across the UK, saw revenue fall to £187,443,000 for the year ending 30 September 2017, compared with £189,746,000 the previous year. UK and Ireland revenue fell from £168,552,000 to £165,705,000, while sales to the Americas, Europe and the Middle East, and the Asia-Pacific market were all up. Pre-tax profit for the group increased to £4,535,000, compared with £3,556,000 the year before. Ebitda was down slightly to £11,493,000 compared with £11,582,000 the previous year, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “The company experienced an increase of circa 3% in its overall volumes into the UK brewing sector due to slightly increased volumes with two major customers and double-digit growth in the volume sold in the craft beer sector. The craft beer sector continues to grow year-on-year and through Brewers Select, our one-stop shop for craft-brewing ingredients. The prospects for 2018 deliveries are indicating the business will see an overall reduction in its brewing volumes due to the loss of a customer contract but with slightly increased volumes into the craft beer sector. The whisky industry overall continues to drive increased demand for malt as they see medium-to-long-term increased demand for their products. The whisky industry has remained relatively resilient to the economic pressures, although the industry is slightly cautious with regards to its expansion plans. The prospects for 2018 deliveries into UK distilling are indicating a slight increase in volumes compared with 2017. The merchanting division in England and Scotland continued to deliver a solid performance in line with expectations, both in volume and in profitability.”

YO! Sushi abandons branding to back Pride in London: YO! Sushi is to remove all labels from the front of its High Street Kensington restaurant and its website and social media platforms as part of the company’s “No Labels. Just Pride” campaign, which celebrates Pride in London and the LGBTQ+ community. The move comes in response to recent research by Pride in London that found the LGBTQ+ community feels “over-labelled”. YO! Sushi is a Pride in London partner and will participate in the parade on Saturday (7 July) and donate £1 to UK Pride Organisers Network for every Pride deal purchased. The YO! Pride deal offers customers seven different-coloured plates for £20. Chief executive Richard Hodgson said: “We have always prided ourselves on our diverse values and strived to be respectful, unconventional, colourful and confident. We are passionate about inclusivity and individualism, which is why we are so excited and honoured to be involved in this year’s Pride in London.” Polly Shute, director of strategic partnerships for Pride in London, added: “Ditching labels and branding is a brave step and we are excited to have such a bold brand partner with us this year.”

Nuala’s Niall Davidson to cross the water for second site: Niall Davidson, who operates Nuala restaurant and Irish bar in Shoreditch, is to cross the water to launch a new venture in Dublin. Davidson, a former chef at London restaurants Chiltern Firehouse and St John Bread and Wine, launched Nuala in December focusing on British ingredients cooked over a wood fire. His new restaurant will open in Dublin 2 next spring and feature a similar concept but using Irish produce. The as yet unnamed 35 to 40-cover restaurant will be part of Trinity Townhouse, a 25-bedroom boutique hotel in South Frederick Street, but will operate separately. The restaurant will primarily serve diners at a counter, while there will be a private dining room and a large larder to accommodate a “big cured meat and fermentation programme”. The Scottish-born chef, who was raised on a farm in Derry, said: “Counter dining works very well, it’s kind of informal but you can still get blown away by nice cooking, nice service and everything cooked to order. People in Ireland are waking up to what’s on their doorstep and there is so much great produce here.”

JD Wetherspoon lodges plans for 30-bedroom hotel next to Ilfracombe pub: JD Wetherspoon has lodged plans for a hotel on Ilfracombe seafront. The company has applied to North Devon Council to build the 30-bedroom hotel in the car park of the Admiral Collingwood, next to the current pub. It follows the arrival of Wetherspoon in the town in 2014, after a lengthy £3.45m redevelopment of the former Collingwood Hotel site. The company originally planned to redevelop the Victorian building into a hotel and restaurant when it was acquired in 2007. This was revised to just a pub and restaurant after the building was damaged by fire and the old hotel was demolished in 2012. A statement with the new plans said a “sympathetic design” would reflect the “timelessly classic” white townhouses of the local area. JD Wetherspoon said the hotel would help drive the local economy by bringing more visitors to the town at an affordable price, reports the North Devon Gazette.

Bury St Edmunds operator acquires lease of Wellington Pub Company site for second venue: Bury St Edmunds-based operator Ben Hutton has added a second site in the Suffolk town. Hutton has acquired the lease of Wellington Pub Company’s The Queens Head, four doors from his current site, Ben’s Restaurant. Hutton, whose food offering focuses on “food to fork”, intends to undertake a complete refurbishment of The Queens Head. The main bar and restaurant will open first, at which time attention will be directed to the development of the letting accommodation on the first floor. Gareth Hatton, of Fleurets, who brokered the deal, said: “Bury St Edmunds has seen some notable changes over the past ten to 15 years and, as a result, the pub and restaurant scene has exploded to provide some of the best offerings in East Anglia. Ben already has a notable reputation in the town as being one of the finest independent operators, with his flagship restaurant receiving various coveted awards within the first year of opening. I am very excited to see where Ben will take The Queens Head.”

M&B sees first member of staff complete new apprenticeship standard: Mitchells & Butlers (M&B) has seen its first member of staff complete the apprenticeship standard introduced by the government in May last year. Ben Collins, part of the Ember Inns team at the Village Inn in Southampton, has completed his Hospitality Team Member – Food and Beverage Service Level 2 standard. Collins also becomes the first apprentice to complete his end point assessment (EPA) from M&B’s training partner Lifetime Training. Collins said: “I found both the apprenticeship and EPA a fantastic experience. It was fun and really tested my knowledge from all my training and four years of being with M&B. I’m glad I got the chance to do this.” M&B vocational learning manager Paul Capper added: “We are extremely proud of Ben for being our first learner to undertake and pass the new assessment approach. We wish him all the best as he looks to embark on his next supervisory level apprenticeship and further his career.”

Entertainment venue Last Days Of Shoreditch to close this month to make way for hotel development: Entertainment venue Last Days Of Shoreditch, a collaboration between Red Gallery and Electric Star founder Rob Star, is searching for a new home as it prepares to close at the end of the month to make way for Amsterdam-based Art’otel’s Hoxton development. Located in a formerly derelict 30,000 square foot space on the intersection between Shoreditch and Old Street, Last Days Of Shoreditch has mixed street food with art, family-friendly events and night-time culture for the past eight years. The neighbouring Red Gallery, which is also closing to make way for the hotel development, has been home to keynote exhibitions, events, screenings and talks, and has hosted local community workshops and UK university graduation shows. Set to close on Sunday, 29 July, Red Gallery and all associated businesses are looking for a new home to continue operating. 

South Yorkshire-based operator opens second site: South Yorkshire-based operator Michelle Carr has opened her second site, in Mexborough. Carr has launched bar, bistro and coffee lounge Empress Rooms in the Empress Building in Swinton Road. The former ballroom and dance hall has been converted into a hub for business, health and community activity. Carr, who also runs the Park View bar in Swinton, told BDaily: “We are really excited about our plans for the Empress Rooms. It is quite unlike anywhere else in the area and we hope it will help to revitalise this part of Mexborough.”

Flourish Food Solutions takes on food and beverage offering at second Diamond Resorts hotel: Flourish Food Solutions, led by chef Ian Boden, has taken on the full food and beverage offering at a second hotel operated by Diamond Resorts. Flourish Food Solutions took over the offering at Wychnor Park Country Club, near Burton-on-Trent, in March, leading to a 32% increase in food and beverage sales. Now the company has taken on Thurnham Hall, near Lancaster. The company is responsible for all restaurants and bars at the hotels as well as catering for events and weddings, with the creation of new restaurant and bar menus as well as packages for drinks and afternoon tea. Las Vegas-headquartered Diamond Resorts owns 379 properties in 35 countries, 17 of them in the UK.

Flip Out opens £1.5m Doncaster trampoline park: Trampoline park operator Flip Out has opened a £1.5m site at the Frenchgate Shopping Centre in Doncaster. The company has opened the 30,000 square foot venue having previously agreed a deal with The Frenchgate Partnership. The unit is split over a 3,600 square foot ground floor and a 24,700 square foot basement that includes a trampoline arena, cafe, a children’s trampoline area, and a ninja obstacle course. The centre also features an interactive system that tracks digital wristbands and records customers showing off their skills on seven different activities around the arena, which can then be shared on social media. It also offers four party rooms and a 160-seat cafe, reports The Business Desk.

Lancashire-based operator opens second site, in St Annes: Lancashire-based operator Veli Kirk has opened his second site in the county. Kirk, who has run Anatolia Turkish Cuisine in Fylde for the past eight years, has launched Anatolia Sea View overlooking the beach at St Annes. The 100-cover restaurant has opened within The Island complex following a six-figure investment, creating 20 jobs. Kirk told the Blackpool Gazette: “I love St Annes and the town is booming, with the number of events and visitors increasing all the time. We can’t wait to welcome customers.”

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