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Morning Briefing for pub, restaurant and food wervice operators

Thu 3rd Jan 2019 - Propel Thursday News Briefing

Story of the Day:

Pubs and restaurants lead the way as consumers continue to prioritise spending on entertainment, overall spend grows 4.0% in 2018: Pubs and restaurants led the way as spending on entertainment continued to be a priority for consumers in 2018, according to the latest data by Barclaycard. Spending was up 11.2% in pubs and 8.7% in restaurants compared with 2017, helping the entertainment category grow 9.0%. Overall, consumer spending in 2018 grew 4.0% year-on-year, rising slightly from 3.5% in 2017. 2018 was a tumultuous year with overall spending growth slowing to just 2.0% in March, before rebounding in the summer with three months of consecutive growth surpassing 5.0%. Entertainment spending was consistently strong, resulting in robust discretionary expenditure in contrast to the challenges faced by the high street. At 4.7%, essential expenditure remained in line with 2017’s figure of 4.6%. Supermarket expenditure was a driving force and was consistent with 2017’s rate of growth at 3.6%. However, the category was bolstered by rising petrol prices in the second half of the year, which saw petrol expenditure increase by an average of 10.4% in contrast to 3.6% in the first six months of 2018. Clothing expenditure reached just 0.7% growth, falling below the rate of inflation and representing a decline in real terms. Continuing a trend from 2017, department stores and electronic outlets remained under pressure, seeing contractions of 3.7% and 3.8% respectively. Barclaycard director Esme Harwood said: “Spending remained relatively robust in 2018, with strong growth in entertainment spending balancing continued struggles on the high street. The weather played a key role, with the long hot summer driving spending, while the colder weather kept consumers from the shops earlier in the year. Ongoing political and economic uncertainty has begun to have a marked impact on how people feel about their finances. Confidence in the UK economy and confidence in household finances both dropped to their lowest levels in October and November respectively. Looking ahead, it will be interesting to see how consumers respond to the January sales and what impact the wider environment will have on household budgets and consumer confidence in the new year.”

Industry News:

Propel Multi Club Conference opens for bookings, two free places for operators: The first Propel Multi Club Conference of 2019 is open for bookings. The full-day event takes place on Thursday, 7 March at the Millennium Gloucester hotel in London. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

More than 10,000 restaurant jobs lost in 2018, almost 11,000 predicted for 2019 with independents hardest hit: More than 10,000 workers in Britain’s restaurants lost their jobs during 2018 – with even more predicted this year. The Centre for Retail Research has predicted almost 11,000 jobs will go in 2019 – with independent restaurants hit the hardest. According to the organisation, 10,413 jobs were lost in 2018, amounting to 30 people a day. Restaurants have been battling stagnating sales, overcapacity and rising costs, which saw brands such as Gourmet Burger Kitchen, Carluccio’s, Prezzo, Byron and Jamie’s Italian close sites, seek rescue deals or enter administration. Costs have increased for restaurants, with a rise in the minimum wage while a fall in the value of the pound since the EU referendum has driven food prices higher. Meanwhile, uncertainty over Brexit has hit consumer confidence. Competition has also increased with a raft of new chains backed by private equity firms having opened across the UK. Property taxes for restaurants paid via businesses rates in England and Wales rose 23% to £564.7m for the 2018 financial year, a two-year hike of £106.64m since rates were revalued in April 2017, according to property advisory group Altus. Alex Probyn, president of UK expert services, said there had been “huge growth in the casual dining market with restaurant numbers up 16% overall since 2010”, but the “race for space pushed up rents impacting on rateable values that came into effect in 2017”. The Centre for Retail Research forecasts a further 10,950 jobs will be lost across the casual dining sector in 2019, with independent restaurants being hit the hardest. Professor Joshua Bamfield said: “Many of the large chains have already made cuts and, in 2019, we expect the smaller and independent restaurants to bear the weight of the losses.”

Sector sees like-for-likes up 4.5% in December as operators enjoy festive trading boost: Like-for-like sales were up 4.5% in December compared with last year, according to S4Labour, the online labour-scheduling management system from Catton Hospitality. Analysis of more than 100 organisations that use S4Labour software showed wet-led venues enjoyed a 3.9% boost in sales, thanks to a 6.5% increase in food sales. Meanwhile, food-focused businesses were the biggest winners overall with a 4.8% uplift, driven by a 5.5% rise in drink sales. Over the key festive trading days (24-26 December and 31 December), sales were up 5.4% compared with last year.

Irish hospitality industry calls for tourism VAT review as it warns increase will lead to 'a lot of closures': The Irish hospitality industry has called for a review of the increase in the VAT rate paid by the sector, warning it will lead to "a lot of closures". The tax was lowered to 9% almost eight years ago to help create jobs during the recession, and having achieved this, the government restored the rate to 13.5% on New Year's Day. The lowest hourly wage that businesses are allowed to pay their workers has also gone up by 25 cent to €9.80. But the sector fears the moves will lead to some businesses closing or cutting jobs. Restaurants Association of Ireland chief executive Adrian Cummins said he expects a lot of closures in regional and rural Ireland. He told RTE: "It will have an effect on tourism, it will have an effect on border counties. The minister moved the VAT rate from 9%, which was the average VAT rate in Europe, to 13.5% which is the third highest in Europe. That doesn't make us competitive. We need to review this immediately, in light of Brexit."

Company News:

Casual Dining Group enhances learning and development programme following senior management change: Casual Dining Group (CDG), the operator of almost 300 mid-market restaurant brands including Las Iguanas, Cafe Rouge and Bella Italia, has enhanced its learning and development programme, following the promotion of Claire Clarke to group HR director. Previously people director – concessions, franchising and central, Clarke is now responsible for overseeing all strategic HR decisions across CDG. The appointment is a direct result of the implementation of the new learning and development programmes. The first of the new programmes, a BA (Hons) business management degree, run in partnership with Leeds Beckett University, enables operations managers and support centre leaders to complete a fully funded degree alongside their day job. CDG has also introduced a chef programme at University College Birmingham, targeting students completing level two and above and providing them with a gateway to work at CDG’s core brands. CDG has also introduced an Elevate programme, targeted at high-performing general managers within the business that are looking to progress to multi-site leaders. All the programmes have been designed to complement CDG’s Leadership Academy programme that was initially launched at Bella Italia before being rolled out across the business. The academy consists of three programmes – stepping up, emerging leader and future leader. CDG chief executive Steve Richards said: “Our employees are the beating heart of our business and we’re dedicated to investing in them and providing them with the courses and tools they need to progress. Equally important is attracting quality talent into the hospitality industry and demonstrating the range and wealth of opportunities available in our vibrant sector. I firmly believe these courses will help us with these focuses." Clarke added: “With these programmes in place, we’re able to offer a clear career path and clarity for each individual. The onus is on the individual and every course participant will be the driving force behind their own progression. We simply provide the tools, structure and advice they need to take the next step in their career.”

Loungers lines up Huntingdon site: Cafe bar group Loungers has lodged plans for a site in Huntingdon, Cambridgeshire. The company, which is backed by Lion Capital, has applied to Huntingdonshire District Council to convert the former Argos unit in High Street. Loungers, which runs 139 cafe bars under the Lounge and Cosy Club brands, has also applied for an alcohol licence. A report submitted with the planning application stated: “The proposed A3 use would contribute to the long term vitality and viability of Huntingdon town centre and primary shopping frontage. The proposed Loungers would keep an active frontage along High Street and would generate footfall throughout the day and evening due to the proposed opening hours of 9am to 11pm, Sunday to Wednesday, and 9am to midnight, Thursday to Saturday.” A Loungers spokesman told The Hunts Post, subject to securing planning consent, it proposed to open the Lounge site in the spring. Loungers, which was founded by Alex Reilley, Jake Bishop and Dave Reid, opened its first Lounge in 2002 in Bristol. 

Greggs launches vegan sausage roll: Food-on-the-go retailer Greggs has launched a vegan sausage roll. The company, which sells 1.5 million traditional pork sausage rolls a week, said the new version has been designed to "mirror some of the original’s classic features". It has 96 layers of puff pastry – made with vegetable oil – and a “bespoke” Quorn filling. The launch comes after 20,000 people signed a petition by animal welfare organisation Peta last year calling on Greggs to produce a vegan version of its bestselling item. Greggs chief executive Roger Whiteside said: “Like many food retailers, we have seen increasing demand for vegetarian and vegan products. We have been trying to develop a vegan version of our famous sausage roll for some time now. It has not been easy but our taste panel customers all love this one, so we have decided to launch it as our contribution to Veganuary.” The new vegan sausage roll is on sale in 950 of Greggs’ 1,850 UK shops. 

McDonald's criticised over Christmas Day pay policy: McDonald’s has been criticised by pay campaigners for its policy not to give staff more money for working on Christmas Day. McDonald’s UK does not have a standard hourly wage for staff, with hourly pay ranging between £5.50 and £10 an hour depending on age and experience. The company said there was no pay enhancement for employees who work on a bank holiday or Sundays, and the policy also applies to staff working on Christmas Day. A spokesman told the I: “Very few of our restaurants are actually open on Christmas Day, and we do not change our rate of pay.” There are 1,261 McDonalds branches in the UK, and up to 100 opened on Christmas Day. Matthew Bolton, executive director of Citizens UK, which campaigns for higher wages, said: “It is disappointing a global food chain that makes billions a year can’t find the extra money for the Christmas Day shift.” McDonald’s Christmas Day pay policy contrasts starkly with the policies of several other sector companies. A spokesman for Pret A Manger said, while the majority of its outlets were closed on Christmas Day, staff were paid double if they did work while workers at JD Wetherspoon received double pay. There is no legal requirement for UK workers to receive extra pay on bank holidays, and therefore UK workers are not entitled to receive a bonus for working on Christmas Day. The Bakers, Food and Allied Workers’ Union, which represents workers in the fast food industry and argues all workers should be paid double on Christmas Day, said: “Global corporations such as McDonalds that pay no extra for bank holidays or anti-social hours should recognise the sacrifices its workers are making.” Meanwhile, McDonald’s has introduced its first vegetarian Happy Meal for children, along with a new “spicy veggie wrap”. Both products are accredited by the Vegetarian Society.

Brend Hotels reports turnover boost but sees profits hit: Brend Hotels, which operates a portfolio of three and four-star hotels in Devon and Cornwall, has reported turnover increased 5.9% to £38,262,068 for the year ending 31 March 2018, compared with £36,124,919 the previous year. The company saw pre-tax profit fall to £429,681, compared with £585,911 the year before, according to accounts filed at Companies House. Gross profit margin remained at 38%. In their report accompanying the accounts, the directors stated: “The directors are pleased to report an increase in turnover of 5.9%. However, profitability has been affected by increased wages and additional administration costs in the year. The external commercial environment is expected to remain competitive in 2018/19. However, we remain confident we will maintain our current level of performance in the future." The business was founded by butcher Percy Brend in 1955 and currently has 11 luxury hotels including Saunton Sands Hotel in Braunton, The Imperial in Barnstaple and the Carlyon Bay Hotel in St Austell.

JD Wetherspoon holds two-week January sale: JD Wetherspoon is holding a two-week January sale, with discounts on draught beer and cider, wine, spirits and soft drinks. Prices vary from pub-to-pub with the promotion running until Thursday, 17 January inclusive. The drinks featured in the January sale are a craft beer (Shipyard); one lager (Coors Light); two ciders (Strongbow Dark Fruit and Magners); Guinness; a guest ale; a selection of wine including three from Coldwater Creek (red, white and rose); three spirits – Gordon's gin, Gordon's pink gin and Smirnoff vodka (all inclusive of a mixer); six soft drinks – Old Jamaica Ginger Beer, ting (grapefruit crush), Pepsi Max, R Whites Lemonade, diet Pepsi and San Pellegrino (lemon and blood orange) – as well as cocktail pitchers. Chief executive John Hutson said: "Department stores and shops hold their sales in January, so it is the perfect time to have a sale in the pub too. The range of drinks on sale in the pub is aimed at suiting a wide variety of tastes – and I believe the January sale will prove popular with customers.”

Ei Group invests £650,000 across four Craft Union sites in Plymouth: Craft Union Pub Company, part of Ei Group’s managed operations, has invested £650,000 across four pubs in the Plymouth area. Funds have been invested in the Cherry Tree, Pennycross; Kings Head, Plymouth; Newmarket Inn, Plymouth; and the Post Office, Plympton. Craft Union Pub Company operations director Frazer Grimbleby said: “The Craft Union model puts great quality pubs back in the heart of local communities by reinvigorating them with targeted investment that enhances the original features of the pub and improves the overall customer experience. We’re delighted to breathe new life into pubs in the Plymouth area. The move clearly demonstrates the successful implementation of our strategy to increase our presence across the country and bring quality, great value, customer experiences for communities across the country." The operators from each of the Craft Union pubs in Plymouth have come from the local community. In addition, Sean Clarke, who previously operated the Cherry Tree, Penycross, was recently appointed as the area manager for Plymouth. Craft Union is a wet-led format and has more than 250 sites.

Cook & Indi’s World Buffet to open Clyde restaurant for seventh Scottish site: Cook & Indi’s World Buffet is to open a restaurant at Clyde Shopping Centre for its seventh site in Scotland. The restaurant is due to open in January or February at a 5,023 square foot unit next door to Nando’s. Ross Campbell, senior asset manager of the centre’s landlord, Edinburgh House Estates, told the Clydebank Post: “We have been working really hard to ensure we bring the right brands to the centre and building on our strong loyal catchment. We do a lot of research into what our shoppers want.” Cook & Indi’s World Buffet currently operates sites in Motherwell and Bishopbriggs alongside four venues in Glasgow. The brand offers Chinese, Indian, Italian and Japanese cuisine as well as takeaway “munch boxes” and cocktails.

The Orange Tree sells remaining pub, in Derby: Independent pub group The Orange Tree has sold its remaining site, in Derby. The deal comes after the Leicestershire-based company, founded by Ben Hings and Gareth Smith in 1997, announced it would be selling its seven sites across the East Midlands. Keiran Lythe, who became The Orange Tree Derby's general manager a year ago, has taken on the role of director, alongside former assistant manager Mike Simpson. The duo have worked together at various bars across the East Midlands for more than 15 years. Lythe told The Business Desk: “Owning our own pub is always something Mike and I joked about, but we never got around to doing anything about it. The Orange Tree Derby just fell into our laps – there was no way we could turn down the opportunity." The Orange Tree Derby, which opened in the Cathedral Quarter building once known as Bar 5 in September 2016, was the group’s seventh and final branch and focused on premium cocktails and spirits. The Orange Tree group’s other venues – the Orange Tree in High Street, Leicester; Ward’s End, Loughborough; and Shakespeare Street, Nottingham, along with the neighbouring Kelso in Loughborough – have been sold to Bedford-based brewer and retailer Charles Wells, while independent operator Koban Group has acquired Fenways in Loughborough and Lansdowne in Leicester.

Black and White Hospitality takes on management of second London hotel with third to follow: Black and White Hospitality has taken on the management of its second London hotel with a third to follow in the first quarter of this year. The company is now operating the four-star, 29-bedroom, The Lansbury Hotel, which is located close to Canary Wharf. Black and White Hospitality will also provide strategic management advice for the hotel in order to optimise the venue’s profitability. Led by hotels managing director Shezan Aslam, the Black and White Hospitality team will manage all elements of The Lansbury Hotel’s operation. The hotel, which can trace its history to the 17th century when the East India Company built its first chapel and almshouses on the site in 1628, also has a spa and restaurant. Black and White Hospitality chairman and chief executive Nick Taplin said: “To add such a major London-based venue to the Black and White portfolio really is a fantastic achievement and we’re delighted to have been brought in to help the owners maximise the hotel’s profitability. This is the second London-based hotel that we now manage with a third to follow in the first quarter of 2019."

TGI Friday's bringing vegan burger from US to UK: TGI Friday's is bringing its vegan burger from the US to the UK. The burger, which is available from Monday (7 January), tastes "every bit as juicy and flavoursome" as the real thing, according to TGI Friday's, and even "bleeds" thanks to beetroot juice. As well as beetroot, the burger is made from coconut oil, mushrooms, herbs, plant proteins, and spices, and flame-grilled before being served in a vegan bun with lettuce, onion and tomato, as well as a side salad or fries. TGI Friday's head chef Terry McDowell said: “We launched our vegan burger in the States last year and have been inundated with messages asking if we planned to bring it to the UK. So, it is here by popular demand.”

Hampshire-based licensees acquire second Star Pubs & Bars site, look to grow portfolio further: Hampshire-based licensees Kate Hayden and Paul Warriner have taken on a second site with Heineken-owned Star Pubs & Bars – and are looking to grow their portfolio further. Hayden and Warriner, who run The Snow Goose in Farnborough, have acquired the lease of The Hare in West Hendred, Oxfordshire, on a five-year agreement. The pub, which is the only one in the village, will reopen in March after a four-year closure following a joint £500,000 investment. The pub’s original name – The Extraordinary Hare – will be reinstated. Original features such as timber floors, open fires and snugs will be restored with the large bar remaining at the heart. A new extension will house a separate dining area while an all-weather garden is being added. Having taken The Snow Goose as their first leased pub in 2015 after extensive careers in managed houses, Hayden and Warriner felt ready to take a second site and plan to acquire more leased pubs once The Extraordinary Hare is relaunched. Hayden said: “We’ve established The Snow Goose and got a brilliant team in place, so it makes sense to expand our business by adding a second pub with a view to ultimately building up a group of three or four sites within a reasonable driving distance of each other.” Neil Convery, Star Pubs & Bars regional operations director for the south west, added: “It has taken time to find the right licensees for The Hare. Kate and Paul are perfect for it – they’re highly experienced, know what it takes to build a fantastic pub business and are passionate about great hospitality and meeting the needs of the community. We’ll be investing across the south west in 2019 and this is one of the most exciting schemes.”

Former Chiltern Firehouse head chef to launch restaurant at The Stratford hotel, in April: Former Chiltern Firehouse head chef Patrick Powell is to launch a restaurant at The Stratford hotel in east London, in April. Powell is launching Allegra on the seventh floor of the 145-bedroom hotel within the Manhattan Loft Gardens skyscraper in the Queen Elizabeth Olympic Park. The restaurant will serve modern European cuisine and will have doors opening on to one of the hotel's sky gardens. The restaurant's roof garden will feature outdoor seating among the herbs and vegetables growing for use in the kitchen. Chiltern Firehouse, which comprises a restaurant and hotel, has become renowned for attracting A-list celebrities.

Wimpy UK introduces biodegradable paper straws: Wimpy UK has replaced plastic straws across all its restaurants with biodegradable paper ones. The move reinforces the company’s commitment to reducing non-recyclable waste throughout its estate. Wimpy UK general manager Chris Woolfenden said: “We’re making good on the promise we made in 2018 to source a sustainable and suitable alternative to plastic straws. We are delighted to have come up with a solution that we believe will go down extremely well with customers and adds a big tick to our sustainability goals.” The red and white paper straws are made from Forest Stewardship Council-managed forests and are 100% biodegradable. They can be composted – breaking down within four to six weeks – and can also be disposed of as food waste. The straws come in two sizes – a larger one for thick shakes and a normal size for soft or sparkling drinks. In the summer, Wimpy introduced 100% recyclable menus made from a new biodegradable laminate and, Woolfenden said the company was continually looking for new opportunities to add to its sustainability credentials.

Newcastle-based operator gets go-ahead for second site: Newcastle-based operator Viehard, which operates restaurant Uno’s, has had plans approved to open a second restaurant in the city. The company, led by Stevie Pattinson and Richard Nellis, will now launch Hibou Blanc in Bigg Market at an empty site formerly occupied by The Gentleman restaurant and neighbouring listed building the Sunlight Chambers. Hibou Blanc, which is French for “white owl”, is set to open next year and will be a high-end, all-day restaurant for more than 100 diners. Work has started at the site and the restaurant could prove a focal point of the regeneration of Bigg Market, where the first phase of a £3.2m scheme is under way. Italian restaurant Uno’s opened on Newcastle’s Quayside in 1989.

Manchester nightclub has licence reinstated following attack on rugby player: A Manchester nightclub where a rugby player was attacked outside has been allowed to keep its licence as long as it commits to a set of conditions. Door staff at Factory Manchester were sacked after St Helens academy player Joe Sharratt, 18, was attacked and suffered a serious head injury. The club's licence was later suspended but the city council has now ruled it can be reinstated, reports BBC News. Door supervisors will be required to wear body cameras as part of the agreement. The club must hire a new security company with accredited door staff, while an "independent auditor" will oversee the venue and ensure staff are fully trained. There will also be "mystery shopper-style" visits to the venue to ensure it is complying with the conditions. Great Manchester Police representative PC Alan Isherwood said: "We believe the proportionate course of action would be to allow the premises to continue to keep its licence with these conditions in place.” The council's decision to suspend the club's licence came after footage emerged of the attack at the start of December on Sharratt and his friend, Leon Cooper, also 18. Seven people arrested in connection with the incident were later bailed pending further inquiries. The council ruled the suspension could be lifted in about three weeks, once the club had had the chance to put all the changes in place.

Persian food blogger opens first cafe: Persian food blogger Maryam Sinaiee has opened her first cafe. Sinaiee, who published her first book, Nightingales and Roses – a guide to Persian home cooking – in November, has launched Maryam's Cafe in Chiswick, west London. The menu at the Chiswick High Road venue includes Persian spinach and chipea soup with barbari bread, rice with lamb and yellow lentils and dried limes stew. There is also apple, cinnamon and walnut muffins and tea will be served with saffron rock candy stirrers. Sinaiee told Hot Dinners: "All sorts of Persian delights are on offer here including my tea blends, herbal infusions, cakes, Persian food and salads." 

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