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Thu 20th Dec 2018 - Propel Thursday News Briefing

Story of the Day:

Hop founder – potential for at least 30 sites in London following launch of evening format: Paul Hopper, founder of City-based Vietnamese street food concept Hop, has told Propel he believes there is potential for at least 30 sites in London under its traditional grab-and-go and new evening formats. Hop opened its fifth site – and first to offer sit-down meals in the evening – this month at the base of the Leadenhall building, more commonly known as the “Cheesegrater”. Hopper said the new format had been “extremely challenging” but would help the company’s bid to start expanding outside its City heartland, with a target of five openings in 2019. He said: “We dipped our toe in the water at our London Wall site but this is a new experience for us. I wanted to see if there was a market for us in the City before we looked to commit to a ten to 15 site roll-out. We’re not looking to add the format to our existing sites because people aren’t really in those areas in the evening. The model we already have works well but this gives us an opportunity to look at launching a variety of formats across London. Also, from a landlord point of view, it makes us more attractive because we can offer something that fits in with what they are looking for. We’ve opened sites within a five-minute walk and they’re not cannibalising each other. We have something for any location. If it’s a train station, we’ve got a great breakfast and lunch offer. If it’s an evening-led area, we’ve got this new format. We can fit in a big or small space. We can be flexible and that’s key, particularly in the current market. Right now the focus is on London. Realistically, we could have at least 30 sites there. You look at what companies such as Wasabi and Leon have achieved in the capital and now we have a genuine all-day offer people are embracing – we could certainly sit alongside them.” Hopper said his immediate priority was the new site and “bedding-in” the expanded support team, which recently moved into the company’s new head office in the Cheesegrater. He added: “Once you go through that five-site barrier, the set-up has to change completely. We’ve managed to cut costs in our supply chain because the people we’ve brought in have experience of negotiating contracts, and that’s certainly helping the P&L.” Hopper said current trading was “really solid”, with the company seeing double-digit like-for-like growth. “We’ve seen incredible like-for-like performance for the past two years,” he said. “All four of our other sites are profitable.”

Industry News:

Restaurant Marketer & Innovator – one month to go, speakers for day two: There is one month to go until the Restaurant Marketer & Innovator European Summit, which is returning for its second year. The two-day event, a partnership between Propel and Think Hospitality, will feature more than 40 speakers with a unique blend of senior marketers, business leaders and entrepreneurs. Day two will feature Wagamama UK marketing director Andre Johnstone; YO! Sushi marketing director Luisa Fernandez; Tim Foster, head of being awesome at Yummy Pubs; Just Eat UK marketing director Ben Carter; Martin Morales, chief executive and founder of Ceviche Family; Celia Pronto, chief customer officer at Casual Dining Group; WE ARE Spectacular chief executive Mark McCulloch; The Stable operations director David Gough; TGI Friday’s UK chief marketing officer Steve Flanagan; Australian entrepreneur Sarah Holloway, who co-founded Matcha Mylkbar; and Lynne Parker, chief executive and founder of Funny WomenWiseTiger managing director Andy Shaw will interview Google industry manager Ailish O'Brien while Zonal chief operating officer Peter Edwards will talk to Novus head of marketing Michelle Farrell, Wadworth retail and digital marketing manager Mark Daniels, and Gusto marketing director James Newman about digital developments and how hospitality businesses can better leverage digital marketing. Wireless Social chief executive Julian Ross and Stephanie Lloyd, head of marketing at The New World Trading Company, will reveal the results of tests that used technology to track customers’ real-life actions in an exclusive report for Restaurant Marketer & Innovator. Meanwhile, Elliotts Agency chief executive Ann Elliott will talk to Abokado operations director Kara Alderin; Seafood Pub Company managing director Joycelyn Neve; and Arc Inspirations chief executive Martin Wolstencroft about what they look for from a marketing team and how to create a great link between the functions. Tickets for the two-day conference, which will take place on 16 and 17 January at One Moorgate Place, London, cost £575 for operators and £845 for suppliers. Group ticket packages are available when purchasing three tickets or more. Tickets can be purchased by emailing Anne Steele, of Propel, at anne.steele@propelinfo.com

Trade bodies differ over government’s post-Brexit immigration plans: The government’s post-Brexit immigration plans, revealed in a white paper today (Wednesday, 19 December) by home secretary Sajid Javid, has provoked differing responses from sector trade bodies. The plans would see low-skilled workers no longer automatically receive the right to work in the UK. The government also plans to ditch the cap on skilled workers coming into the country and seek a consultation on installing a minimum salary requirement of £30,000 a year for skilled EU migrants on five-year visas. This already applies to non-EU workers in most cases. Under proposed rules, low-skilled workers entering the UK from EU countries would be asked to apply for visas of up to a year. UKHospitality chief executive Kate Nicholls labelled the policy “fundamentally flawed”, saying it would “damage the hospitality sector and wider UK economy”. She said: “These proposals will be crippling for business, and Britain’s high streets in particular. An immigration policy that recognises the contributions of migrants of all skill levels is one that works for Britain. The introduction of a 12-month temporary visa could risk creating a dual workforce, with those permitted to stay being invested in and those on temporary visas unable to plan or progress. This could prove a significant drag on productivity.” Brigid Simmonds, chief executive of the British Beer and Pub Association, branded the white paper a “positive step forward”. She said: “We have called for a review of the Tier system and welcome the intention outlined by the government to remove the annual cap on the number of Tier 2 work visas issued, widen the skills threshold to include people with qualifications equivalent to that of A-levels, and end the requirements for labour market tests by employers wanting to sponsor a worker. We have also previously raised concerns over retaining the salary cap of £30,000 as many pub chefs, who are in short supply, would fail to meet this prohibitively high cap. A further consultation on the appropriate salary cap is therefore most welcome.” Chairman of the British Takeaway Campaign Ibrahim Dogus said: “The government’s decision to treat EU and non-EU citizens the same in the post-Brexit migration system is right – our restaurants need talented chefs working within specialist cuisines from across the globe. However, the insistence on suggesting skills in the takeaway and hospitality sector are ‘low’ and using salary as a crude measure to decide how important they are is deeply disappointing and will have a huge impact on our sector.” 

PCA publishes first set of Pubs Code awards: Pubs Code Adjudicator (PCA) Paul Newby and deputy PCA Fiona Dickie have published the first set of Pubs Code awards in a step to “level the playing field” between pub-owning businesses and tenants in free-of-tie negotiations. Newby and Dickie called the move a “significant step to creating greater transparency in the arbitration process and providing equality of arms between pub companies and tied tenants”. Newby said: “Our aim is to help tenants be more informed when negotiating with their pub companies. Publication of awards will also provide a greater incentive for pub companies to engage in effective negotiations with their tenants on the issues that have already been decided by the PCA.” Examples of themes included in the awards are terms of Market Rent Only (MRO) proposals should be reasonable and common in the free-of-tie market as a whole; pub-owning businesses shouldn’t take advantage of the more limited negotiating power a tied tenant who requests a MRO proposal will usually have as negotiations aren’t taking place in the open market; the MRO proposal should constitute an accessible option for the individual tied tenant; and a pub-owning business shouldn’t make a proposal on standard terms unless it has considered the particular circumstances of the tied tenant and is satisfied the terms are compliant in that individual case. Dickie said: “We will continue to consider each case on its own facts, keeping an open mind when making a decision. However, we do expect where a decision on law has been made, this is respected by both pub-owning businesses and tenants.” The PCA has also published a document providing information for tenants who have received a Pubs Code award to help them consider whether there is personal or particularly commercially sensitive information they don’t want to be published. The PCA said it intends to publish further awards to increase industry understanding about how the Pubs Code has been applied in individual cases. The six pub companies covered by the code – Admiral Taverns, Ei Group, Greene King, Marston’s, Punch, and Star Pubs & Bars – outlined and agreed to a framework whereby they would waiver confidentiality to make arbitration decisions public. Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “Making the awards public will increase transparency, allowing tenants and industry alike to learn from the decisions the PCA makes.”

Company News:

Wagamama staff to receive £1,000 bonus from directors as part of £559m sale to TRG: Wagamama staff are to receive a £1,000 bonus from its directors as part of the £559m sale of the business to The Restaurant Group (TRG), Propel has learned. Employees who have been with Wagamama for more than 12 months as of 28 November will receive the pay-out. It is believed the total pot is worth about £4m. The one-off deal-related bonus is a thank you from the directors including outgoing Wagamama chief executive Jane Holbrook and private equity firm Duke Street to staff for their hard work in getting the business to where it is today, leading to the sale. TRG shareholders approved the acquisition of Wagamama last month. A rights issue to help fund the deal had a take up of 92%. TRG chairman Debbie Hewitt said at the time the deal was announced in October it created a “raft of new opportunities” for the company to capitalise on. It said there was potential for a further 40 to 60 Wagamama sites in the UK while TRG expected to convert at least 15 outlets to the Wagamama brand by 2020.

TGI Friday’s UK chairman steps down: TGI Friday’s UK chairman Murray Hennessy has stepped down having previously taken up a chief executive position in the US, Propel has learned. Hennessy, who joined TGI Friday’s in July 2015, has left the company following his appointment as boss of indoor water park business Great Wolf Resorts. Although Hennessy was appointed chief executive of the US firm in March, having served on an interim basis following the departure of Ruben Rodriguez in December last year, he has now decided to relinquish his role at TGI Friday’s. The company revealed no further details of a planned replacement. A spokesman said: “We can confirm Murray has taken on a full-time chief executive role, based in the US. Due to this, it was mutually and amicably agreed Murray would step down from his UK-based non-executive chairmanship for TGI Friday’s. We’d like to thank Murray for his incredible contribution to Friday’s over the years – he will remain part of the extended Friday’s family.” Prior to joining TGI Friday’s, Hennessy served as deputy chairman of Trainline.com having stepped back as the company’s chief executive in 2014.

Coopland & Son reports turnover up 7.2% to £47.5m in year of BGF investment: Bakery company and cafe operator Coopland & Son has reported an increase in turnover and pre-tax profit in the year it secured a multimillion-pound investment from the BGF. Coopland & Son, founded in 1885, currently has 145 shops and 11 cafes across Yorkshire, Lincolnshire and the north east, as well as bakeries in Scarborough, Durham and Hull. The company saw turnover rise 7.2% to £47,512,290 for the year ending 31 March 2018, compared with £44,297,000 the year before. Pre-tax profit was up to £1,597,710, compared with £542,127 the previous year. The company said growth in turnover had been achieved despite severe weather in the last quarter of the financial year, which led to delivery issues and reduced customer footfall. In December 2017, Coopland & Son secured an £8.5m investment from BGF to accelerate the roll-out of its shops across the north of England. This led to a restructuring of the business, with Coopland & Son (Scarborough) becoming a subsidiary of CS Food Group, of which BGF became a minority shareholder. As part of the restructuring the company’s motor division, trading as Londesborough Motor Services, was disposed of. In their report accompanying the results, the directors stated: “We are focusing hard on organic growth of our retail estate and mobile van sales, looking at opportunities within our existing and neighbouring trading areas. We continue to ensure we maintain product quality through continued development while ensuring our manufacturing sites maintain their efficiencies.”

Marston’s executives see slight rise in remuneration: Marston’s executives have seen a slight increase in their remuneration, the company’s annual report has revealed. It showed chief executive Ralph Findlay and chief financial and corporate development officer Andrew Andrea received a bonus of 17.7% of salary based on the company’s targets. This meant Findlay saw his total remuneration rise slightly to £807,665 for the year ending 29 September 2018, compared with £803,303 the previous year. This consisted of £552,840 salary, £17,473 benefits, £97,852 bonus, £1,290 of long-term incentives and £138,210 pension. Meanwhile, Andrea’s total pay was up to £524,621, compared with £522,903 the year before. This was made up of £370,260 salary, £14,773 benefits, £65,536 bonus and £74,052 pension. Both executives were awarded a 2% salary increase “in line with the average salary increases across the group”.

Montpeliers returns to pre-tax profit despite turnover fall: Edinburgh-based pub and restaurant business Montpeliers has reported a return to pre-tax profit despite a decline in revenue. Turnover fell to £15,322,273 for the year ending 30 April 2018, compared with £16,007,810 the year before. It saw a pre-tax profit of £128,767 compared with a loss of £677,462 the previous year, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “The success of the innovative changes in the ergonomics, ambience and product offer at Rabble (in Frederick Street, Edinburgh, formerly known as Rick’s) was one of our trading highlights of the year. Our flagship unit, Tigerlily, had yet another very satisfactory trading period despite a great deal of new competition in the city centre, as did our other well-established bars and restaurants. Our late-night venues were a mixed bag, with Lulu maintaining its popularity but the Opal Lounge (now Eastside) felt the impact of the well-documented malaise that has affected this sector of the market in Edinburgh and, indeed, in all parts of the UK for some years now.”

Ascot Brewing Company embarks on second crowdfunding campaign to raise £250,000 for brewery move: Ascot Brewing Company has returned to crowdfunding platform Crowdcube as it looks to raise £250,000 to move to larger premises and buy equipment to meet demand. The brewer, which was acquired by local businessmen Chris Davies and Mike Neame last year and is based in Camberley, Surrey, raised more than £270,000 at the start of this year to ramp up brewing capacity. Now it is back for a second funding round, offering 14.29% equity in return for the £250,000 investment, giving the company a pre-money valuation of £1.5m. The pitch states: “With 535 new investors we have prudently used their investment to grow, increasing sales and production capacity. Our strategy is working. To accelerate the next phase of our growth we are raising further capital to move premises and equip the brewery appropriately. With the investment we aim to increase brewing capacity and our sales team, meeting demand for kegs and cans in the UK and for export; increase revenue by maximising value from our brewery, web and brewery shop and micro-pub; roll out contactless ‘smart pump clips’ to pubs, instantly answering consumers questions about how we brewed our beer, its style, the hops and process we use; and test market Ascot House Amarillo handcrafted gin using our knowledge of hops, flavours and aromas.”

Daniel Batham reports turnover and pre-tax profit boost: Midlands-based brewer and pub operator Daniel Batham has reported turnover increased to £5,958,100 for the year ending 30 June 2018, compared with £5,243,339 the year before. Pre-tax profit was up to £1,568,155 compared with £1,278,902 the previous year, according to accounts filed at Companies House. Gross profit margin rose to 67.76% from 67.56% the year before. The number of employees increased during the period to 111 from 93 the year before. A dividend of £480,000 was paid. The company operates ten pubs.

SA Brain targets Coffee#1 site in Devon town that rejected Costa: Cardiff-based brewer and retailer SA Brain wants to open a Coffee#1 site in a Devon town that previously rejected Whitbread-owned Costa Coffee. SA Brain has applied to South Hams District Council to convert a former Barclays bank branch in Totnes. The cafe would have about 104 covers inside and 12 outside, reports Radio Exe. In 2012, several thousand people signed a petition against Costa and pledged to boycott the branch if it opened, warning Totnes risked becoming a “clone town”. Costa successfully achieved planning permission for a store in Fore Street but withdrew its plans in the face of opposition. In a letter supporting the application, Coffee#1 references the Costa Coffee plan. It said: “Many of the objections related to the fact Costa was the application. However, the officer was clear in his report these objections are not a material consideration and therefore are afforded little-to-no weight in the decision-making process. While it is acknowledged Totnes has many independent businesses, there are high street and chain retailers present within the central shopping area. These objections were specific to Costa being a national company with external shareholders resulting in money being taken away from the local area.” Coffee#1 opened its first store in Cardiff in 2001, with SA Brain acquiring the business in 2011. It currently has 92 sites.

Pub People moves into Leicester for 51st site: Midlands-based operator Pub People, led by Kevin Sammons, is to open its first pub in Leicester and 51st in total. The company, which operates pubs in Nottingham, Derby, Chesterfield, Sheffield and Lincoln, will reopen The Clarendon, on the corner of West Avenue and Montague Road, on Friday (21 December). Sam Bodell, who has run a number of venues for Pub People, will manage the pub, which will offer four cask ales and more than 20 varieties of premium gin alongside rum and whiskey. The Clarendon will also screen live sports and host quiz and live music nights. The pub will undergo a full refurbishment in the spring, when a new food offering will be introduced.

Co-owner of Michelin-starred Harwood Arms to open restaurant and bar in Stratford-upon-Avon: Mike Robinson, restaurateur and co-owner of the Michelin-starred Harwood Arms in Fulham, is set to open The Woodsman in Stratford-upon-Avon, Warwickshire. Showcasing Robinson’s passion for British produce and sustainable wild food, the restaurant and bar will launch at the Hotel Indigo Stratford-upon-Avon in the spring. Robinson will be working with head chef Jon Coates to bring his core “field to fork” philosophy to The Woodsman, with a focus on sustainability, seasonality and locally sourced produce. A large wood-fired oven and charcoal grill will form the focal point of the restaurant, where guests can watch the chefs at work. The Woodsman will also house an on-site butchery. Beyond The Woodsman, Robinson and Coates will also oversee The Falcon, the hotel’s original tearoom complete with Shakespearean wood panelling. Set to open in April, guests will be able to choose a selection of sweet and savoury treats paired with a range of champagne. In the evening, The Falcon bar will offer a seasonally rotating cocktail list.

Harry Ramsden’s celebrates 90th anniversary with free children’s meals: Fish and chip chain Harry Ramsden’s, owned by Boparan Restaurant Group, is marking its 90th anniversary on Thursday (20 December) by offering free children’s meals at a series of parties across its estate. The brand has been operating since Harry Ramsden sold his first portion of fish and chips from a small hut in Guiseley, West Yorkshire, and now has more than 35 sites across the UK. Harry Ramsden’s chief executive Tom Crowley said: “This is a very special day for everyone involved with Harry Ramsden’s and we look forward to celebrating with our customers and teams. To be in a position to mark such a landmark anniversary underlines the loyalty towards the Harry Ramsden’s brand and we enter the next phase of our ongoing evolution with great confidence.”

KPS Pub Co to transform newly acquired Islington bar into artisan beer venue: KPS Pub Co has acquired the leasehold of Cured Bar in Liverpool Road, Islington, in a deal brokered by agent Savills. The property was marketed at a guide price of £125,000. KPS Pub Co will turn the venue into The Foxglove, a neighbourhood pub serving drinks solely sourced from small and independent producers. Formerly trading as Cured Bar, with Tuscan restaurateur Johnny Bruschetta as guest resident, the property is set over a basement, ground and two upper floors with a walled beer garden. The ground-floor bar and dining area will provide 64 covers. A KPS Pub Co spokesman said: “We hope to inject some passion and integrity into the pub scene based on our appreciation of good-quality, independently made alcohol. The focus of the pub will be on artisan beer and spirits, with the aim of making craft beer accessible for all.” Chris Bickle, director in the licensed leisure team at Savills, added: “The locality is home to several award-winning dining pubs and the arrival of The Foxglove as a carefully curated wet-led pub will complement the area well.”

AB InBev inks deal to use 100% renewable energy for UK operations: Anheuser-Busch InBev (AB InBev) has signed a deal with solar energy company Lightsource BP to purchase 100% renewable electricity for its UK operations. The 15-year power purchase agreement will be the largest unsubsidised solar energy deal in the UK. AB InBev’s two main UK breweries in Magor, South Wales, and Samlesbury, Lancashire, produce more than 17 million bottles and cans of Budweiser each week. The new solar capacity is expected to be connected by the end of 2020 and all Budweiser brewed and sold in the UK will feature a symbol encouraging consumers to choose a beer brewed with 100% renewable electricity. The symbol, which has already rolled out across the Budweiser brand in the US, is available for other businesses to use. The move is part of AB InBev’s global 2025 sustainability goals, which will see 100% of the company’s purchased electricity sourced from renewables. Jason Warner, zone president for Europe at AB InBev, said: “We want to build a movement towards celebrating and growing renewable electricity and we’re asking our consumers, customers, colleagues, business partners and fellow companies to join us. We are making our 100% renewable electricity symbol available for any brands who share these values.”

Yamagoya opens second London site, in Soho: Japanese ramen restaurant Yamagoya has opened its second London site, in Soho. Founder Masatoshi Ogata debuted the concept in the UK as a six-month residency at hot pot restaurant Shuang Shuang in 2016, before relocating to a permanent site in Waterloo. Now Yamagoya has returned to Soho to take over Shuang Shuang’s restaurant in Shaftesbury Avenue, while the hot pot restaurant has relocated upstairs. The venue offers dine-in and grab-and-go ramen alongside new dishes such as vegan curry rice with fried vegetables and pickled greens and Yamagoya’s renowned raindrop cake. Drinks include beer, sake, freshly made matcha and soft drinks. Ogata said: “Soho is the perfect spot for Yamagoya and I’m proud it has come such a long way from the humble start in Fukuoka to the heart of London.” Ogata founded Yamagoya, which means “mountain hut”, in Japan in 1969.

Paul Heathcote to open high-end restaurant in Bolton’s Albert Halls: Former multi-site chef Paul Heathcote is to open a high-end restaurant in Bolton’s Albert Halls as the final piece of the venue’s multimillion-pound refurbishment. The restaurant will launch next year in the former Dido suite canteen after the chef’s catering company, Heathcote & Co, signed a ten-year partnership with the Albert Halls. Heathcote closed the last of his 12 restaurants in 2016. He told This Is Lancashire: “Bolton is my home town. We look forward to working closely with the council, business community and further afield to drive hospitality into the town centre again. The plans are under wraps, as is the name, and we hope we will be open for Easter. What I can say is the menu will feature traditional northern dishes.” Bolton Council leader Linda Thomas added: “A high-class restaurant is a key part of the regeneration of the town centre. Paul is Bolton through and through and it’s a real feather in our cap that Heathcote will be the official catering partner for the Albert Halls. The restaurant will provide superb catering for conferences, weddings, performances and corporate events.”

Team behind boutique hotel Ampersand to launch City of London sister site: The team behind South Kensington boutique hotel The Ampersand is to launch a sister site in the City of London. Vintry & Mercer will launch in Garlick Hill on Monday, 4 February offering two restaurants and a cocktail bar. The food offering will be overseen by former Nobu and Zuma chef Chris Golding. The Vintry Kitchen will be an open-plan restaurant offering Asian-style dishes including bao buns and sandos with fillings such as chicken karaage with kimchi. There will also be sharing plates such as sweet soy-braised beef ribs with smoked bone marrow, Hot Dinners reports. The name Vintry Kitchen reflects the fact wine will be served from casks surrounding the restaurant. Vintry & Mercer will also feature a rooftop restaurant offering modern British fare featuring a charcoal oven and dishes such as hay-smoked beef tartar. Basement cocktail bar DND, which stands for “do not disturb”, will have its own entrance and take inspiration from 1920s speakeasys with velvet chairs and art deco detailing. DND will be run by Mihai Cosmin, formerly of Berners Tavern and Nine Lives, who will offer barrel-aged and house cocktails alongside a New York-inspired menu of small plates, tacos and sliders.

Compass Hospitality to operate Inverness hotel acquired by Singaporean investment group: Compass Hospitality is to operate The Craigmonie Hotel in Inverness, which has been acquired by Singapore-headquartered private investment firm The Buxani Group. The 40-bedroom hotel features two restaurants, a lounge bar, and function and meeting rooms. It was previously privately owned and operated and was sold in an off-market deal for an undisclosed sum as The Buxani Group looks to build its hotel portfolio. Stuart Drysdale, director – hotels at Christie & Co, which handled the sale, said: “The hotel has enjoyed healthy turnover levels and profits and we are confident The Buxani Group will be able to build on the historic trading levels as Inverness continues to enjoy increased visitor numbers.”

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