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Morning Briefing for pub, restaurant and food wervice operators

Tue 15th Jan 2019 - Propel Tuesday News Briefing

Story of the Day:

Charlie McVeigh looks at making up to three more investments following BBQ Dreamz backing: Draft House founder Charlie McVeigh has told Propel he is looking to make two or three more investments in sector businesses by April. It comes following his £350,000 investment in Filipino street food concept BBQ Dreamz, which McVeigh said would be the only startup he planned to back. McVeigh, who sold Draft House to Scottish brewer and retailer BrewDog in March last year, said: “The current crisis in the sector must represent an opportunity for resilient brands. I’ve been talking to a lot of companies trying to find the right fit and I’ve been making good progress. I’m looking to help companies with fund-raising, expansion planning and preparing for exit. Having built and exited five hospitality businesses in the past 20 years, my view is there are some businesses out there that might benefit from my experience.” More than 1.24 million people watched McVeigh partner with BBQ Dreamz founders Lee Johnson and Sinead Campbell in last week’s episode of BBC series My Million Pound Menu. K10 owner Maurice Abboudi, also on the show, will join McVeigh in backing and mentoring the couple. BBQ Dreamz, which was founded in 2014, has launched a six-week Sunday pop-up at MeatLiquor’s King’s Cross site, which sold out within 48 hours. McVeigh said: “We did about 100 covers this week with an 11-course tasting menu, which is very challenging, and Lee and Sinead did an amazing job. I was hesitant about doing more than two weeks but Lee insisted on six and they’ve all sold out. That’s testament to their personalities on television and their reputation for serving some of the tastiest food in London.” McVeigh said they were looking at potential locations for the first permanent home and hoped to have something open by the summer, although he admitted there was “still a lot of work to do”. He added: “I think it’s possible there could be more than one but let’s see how this goes first!” In the meantime, McVeigh said they would spend one or two weeks in the Philippines with Johnson’s family, who have a rice farm and run food stalls on the island of Ilo Ilo, which inspired the BBQ Dreamz menu. They will work with a Manila-based production company to document the trip. Video and photos will be used to tell Johnson and Campbell’s story on social media and in the new restaurant. McVeigh is back on My Million Pound Menu on Tuesday (15 January) on BBC2 at 8pm.

Industry News:

Propel Multi Club Conference open for bookings, two free places for operators, Nathan Wall to present: 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. Nathan Wall, operations director of Managed Investments at Ei Group, will talk about the company’s progress with its managed investment scheme that has seen the company partner with 12 sector companies and entrepreneurs in joint ventures to develop pubs. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

BII opens entries for Licensee of the Year 2019: The British Institute of Innkeeping (BII) has opened entries for its annual Licensee of the Year award. The competition is open to managers, lessees, tenants and free traders. Last year more than 200 entrants vied for top spot. This year a four-month judging process will culminate with the winner crowned at the BII Summer Event on Tuesday, 4 June. As well as the title, the winner will receive a year’s free Sky Sports pubs and clubs subscription for their venue. Licensees can nominate themselves or be nominated by colleagues, customers or suppliers at Entrants must have been operating their business for at least two years, hold a personal licence and have a food hygiene rating of four or five. The closing date for entries is Thursday, 28 February. BII chief executive Mike Clist said: “The BII Licensee of the Year Award has always had a way of finding the industry’s brightest stars and we are sure 2019 will be no different. The winner this year will need to be a licensee who excels in all aspects of running a licensed hospitality business and be an ambassador for our fantastic industry.” Last year’s winners were Alex and Tanya Williams, of the Polgooth Inn in St Austell, Cornwall.

UKHospitality emphasises need for flexible use of high-street space to allow businesses to thrive: UKHospitality has emphasised the need for flexible use of space on the high street to allow sector businesses to thrive. In its response to the government’s consultation on planning reform, chief executive Kate Nicholls said: “Hospitality businesses are integral to high streets and will have a significant role to play if they are to prosper. Flexibility is increasingly important for both businesses and customers looking to take advantage of multi-use spaces. More than ever, commercial space is being used fluidly and the planning system should be able to encourage dynamic use of the high street. Hospitality is at the centre of the high street and the consultation correctly acknowledges the important role it plays. Hospitality businesses are integral to communities around the country and the sector should be at the forefront when the government considers reform of planning regulation. Removing burdensome red tape and restrictions can help hospitality businesses make good use of their available space in an environment where costs are continually increasing. Merging A1, A2 and A3 legislation into a single class would allow businesses to open quickly in empty units and enable them to effectively diversify to meet consumer demand. It benefits nobody if property is sat empty so measures to encourage flexibility and ensure space is put to good use is a positive step if the government is committed to supporting high streets.”

London hotel market sees significant year-on-year revpar rise in December: The London hotel market saw a significant year-on-year rise in revpar during December, according to the latest data from STR. Revpar rose 11.4% to £128.09, while all other key performance indicators saw an increase compared with December 2017 including demand, which was up 7.3%. Average daily rate increased 6.2% to £156.47, while occupancy rose 5.0% to 81.9%. Supply increased 2.3% year-on-year. STR analysts attributed the performance to a strong holiday season. Daily data showed New Year’s Eve was the strongest day of the month, with revpar up 17.8% year-on-year at £219.39.

Michael Saunders begins role as chairman of The Benevolent: Bibendum chief executive Michael Saunders has officially taken over as chairman of The Benevolent, a charity that supports employees in the drinks trade. Saunders, who has replaced Tom Yusef in the role, called for industry members to buy the “equivalent of a drink for The Benevolent every month” during his maiden speech as chairman. Saunders added: “2019 promises to be another important year for The Benevolent and I look forward to playing my part to raise awareness of our work and the vital funds needed to enable us to provide the support that is in such demand.” Saunders joined Bibendum in 1982. He will be succeeded as The Benevolent chairman by Enotria & Coe chief executive Troy Christensen in January 2021.

Licensing update: Licensing solicitors John Gaunt & Partners produce a useful monthly summary of topical issues. To access the latest, click here

Company News:

Revolution boss admits taking pizza off menu was mistake, new experiential entertainment leads to 15% sales uplift: Revolution Bars Group chief executive Rob Pitcher has told Propel taking pizza off the menu was a mistake as he admitted he wasn’t pleased with how the brand’s new food offer had landed. Speaking following the company’s first-half trading update, Pitcher said the company was rectifying the pizza move while more work was being carried out on the menu ready for launch in the spring. He added: “The lack of traction is also down to a drop in lunchtime footfall. Our sites are on the high street and with footfall down by more than 30%, that is having a knock-on impact.” A brunch menu has also been trialled across 12 sites which, “after a few tweaks”, will be rolled out across the estate over the next eight weeks. The company has also trialled experiential entertainment on a Saturday night and Pitcher said those sites had seen sales up between 12% and 15%. A second batch has been added to the pilot, with sales there up about 5%. Pitcher said: “We are doing a bit more refinement before rolling out but we’re pretty pleased with it.” Revolution Bars Group has also expanded delivery to circa 50 sites. Again, Pitcher said the offer was being refined, including changes to packaging. Pitcher said the company was now answering 90% of customer feedback within 48 hours, which had helped the brand improve its rating from 4.0 stars to 4.2 stars. Revolution Bars Group has also completed its brand research programme. Pitcher said management was now working through the findings and would provide further updates at its interim results on Friday, 1 March. Meanwhile, Peel Hunt leisure analyst Douglas Jack has argued stabilising trading and executing on new initiatives rather than site openings must be the focus of Revolution Bars Group management. Jack said: “Based on revised forecasts, Revolution Bars Group is currently valued at 6.4 times EV/Ebitda, which is not onerous in our view. We are cutting our recommendation to ‘Hold’ (target price 120p) from ‘Add’ (target price 150p). The prospect of corporate activity remains a possibility but stabilising trading and executing on new initiatives must be the sole focus of management.”

Oakman reports year-to-date like-for-likes up 8.5% following ‘excellent’ Christmas, extends settled status funding to staff family members: Oakman Inns and Restaurants has reported like-for-like sales are up 8.5% for the 40 weeks ending 6 January 2019 as the company revealed an “excellent” performance over the Christmas trading period. Meanwhile, total sales for the current financial year are up 36.1% to £29.7m. The announcement comes as the company saw like-for-like sales for the five weeks ending 6 January 2019 increase 8.3%. The company also revealed it will extend funding to help family members of staff apply for settled status. Chief executive and founder Peter Borg-Neal said: “Christmas started slowly but gathered pace towards an excellent outcome, with key date performance particularly strong. While our like-for-likes (as with everybody) benefit from sites we have invested in, I was delighted to note our comparable (uninvested) estate grew 4.9% over the Christmas period. The enduring strength of our business is further underlined by the fact three of our first four sites set new record trading weeks. Our new sites also performed impressively, with The Royal Foresters in Ascot averaging more than £100,000 net per week and sites such as Beech House, Hampton Hill, and The Cherry Tree, Olney, smashing their respective targets. Our mood over Christmas was only dampened by the rather crass television advert the government put out on 27 December reminding our EU colleagues they will need to apply for permission to remain in their homes and places of work after Brexit. We thought the timing was poor with so many people in the hospitality, care and health sectors giving up their Christmas to look after others. We announced last year we would fund all applications for settled status and support the process. In response to the advert we announced to our people on New Year’s Day we will extend the funding to family members. We have two projects on-site at present – The Polecat in Prestwood and the extension of The Beech House in Beaconsfield – both of which will complete in the spring. We are in the planning process for a further five sites and are close to completing on the freehold of a new site in Buckingham. Our new chief operating officer, Dermot King, has started with us this week, further strengthening our capacity for growth and business improvement.”

Chestnut Group boosts estate to nine after pub buys: East Anglian-based pub company The Chestnut Group has added two pubs to its portfolio, taking its estate to nine sites. It has acquired its first site in Essex – The Eight Bells in Saffron Walden – from Cozy Pubs and The Weeping Willow in Barrow, Suffolk. The Eight Bells dates to the 15th century and features a heavily beamed bar, private dining area and 60-cover restaurant. Cozy Pubs acquired the business in 2011. The decision to sell the pub, in a deal brokered by agent Christie & Co, enables the owners to concentrate on its room-led business The Cricketers, near Bishops Stortford. The property is held on a lease from Heineken-owned Star Pubs & Bars. The Weeping Willow is a 16th century pub that was restored and expanded in 2017. Philip Turner, who founded Chestnut Group in 2012, said: “We have known The Weeping Willow through its restoration and highly successful launch, having worked with the previous owners. It is a modern country pub and kitchen that demonstrates how old and new can be brought together to provide a unique experience for today’s guests. Saffron Walden has always been a target market for us. The Eight Bells, with its historic dining room, fantastic location and local reputation, is a great platform for growth through investment.”

Urban Pubs and Bars to open Watling Street site next month: Urban Pubs and Bars, led by Nick Pring and Malcolm Heap, is to open its 19th site, a bar and restaurant in the City of London’s Watling Street, on Tuesday, 12 February. Juno Rooms will open across two floors at a site formerly occupied by Carmona Tapas Bar. Dishes will include chicken ramen burger with fries in a cream bun, and crab linguine with garlic, chilli and basil, Hot Dinners reports. Earlier this month, Urban Pubs and Bars secured its 20th site, a former JD Wetherspoon pub in Balham, south London, which will reopen in March. The company’s annual turnover is expected to hit circa £23m by April this year, while it achieved “strong” double-digit like-for-like sales growth during the four-week December trading period, with more than 20% like-for-like growth on food. In November, Urban Pubs and Bars acquired Salt Yard Group and its three central London restaurants for an undisclosed sum.

JW Lees operations director for hotels and inns division to retire: North west brewer and retailer JW Lees has announced Tony Spencer will retire as operations director for its hotels and inns division this summer. The company is now advertising for his successor. Spencer joined JW Lees in July 2015 and was instrumental in setting up the hotels and inns division, which is now a £20m business in its own right with £5m unit Ebitda and annual growth of 31%. New hotels added during Spencer’s time with the business included Stanneyland’s, Groes Inn and Bluebird Inn, taking the division to 14 sites and 291 bedrooms. Major refurbishments have also taken place at properties such as The Alderley Edge Hotel, Golden Pheasant, Gwesty Links and The Boathouse. The advert for Spencer’s replacement states: “We are looking for someone special who can take this important trading division to the next level. You will sit on the JW Lees management board and be supported by colleagues in finance, marketing, people and property, as well as heading up a great team. There is great appetite for growth at sixth-generation family business JW Lees and, while sites share operating formats and systems, each hotel or inn is individual with its own character. We are looking for a highly experienced hospitality professional who has the capability to successfully expand the current estate, deliver returns on capex projects and grow turnover while converting to the bottom line.”

Edinburgh-based Swedish artisan bakery and cafe Söderberg to make London debut: Edinburgh-based Swedish artisan bakery and cafe Söderberg is to open its first London site, this month. Founded in 2007, the company operates its own bakery, three cafes and three bakery shops in the Scottish capital. Now it will open its first London-based cafe, in Berwick Street, Soho, after agreeing a deal with landlords Shaftesbury. The 1,800 square foot venue will offer Swedish open-style sandwiches, smörrebröd, signature cardamom buns and chocolate cake. The drinks menu will include Johan & Nyström coffee roasted in Sweden, Scandi-inspired cocktails, natural wine and craft beer. The cafe will be set across two floors and feature concrete counters and industrial bakery racks. The downstairs lounge will be furnished in a Scandinavian mid-century style, complete with record player and 1960s Scandinavian furniture. Söderberg managing director Asa Penman said: “Berwick Street’s varied and cutting-edge shops make it the perfect setting for our first London Söderberg cafe.” Julia Wilkinson, group restaurant strategy executive at Shaftesbury, added: “Söderberg’s contemporary take on traditional Swedish baking and hospitality is an exciting new addition to Soho’s diverse and vibrant food and beverage offering.” Hanover Green Retail acted on behalf of Shaftesbury.

Red & Blue Restaurants reports like-for-likes up 9.2% in final quarter of 2018, promotes group executive chef to board: Liverpool-based Red & Blue Restaurants has reported like-for-like sales increased 9.2% in the final quarter of 2018. The company, which operates four sites in the city, has also appointed group executive chef Matt Walsh to the board of directors. Walsh joined the company in 2014 to head the opening of Bacaro in Castle Street, which offers Italian small plates designed to be combined and shared. He was promoted to group executive chef in 2018 overseeing the rest of the company’s growing portfolio. Most recently he headed the launch of Rocket & Ruby, which serves a selection of small plates, freshly made sandwiches, home-baked goods and coffee. Co-owner Jonathan Poole said: “Matt is now running all four of our different, independently named restaurants in Liverpool and we remain extremely proud of the high-quality standards we maintain across the group, which is down to the leadership and creativity of Matt and his team. We are now looking to expand our popular Bacaro restaurant by opening a site in Manchester in 2019 and, with like-for-like sales up 9.2% for the last quarter of 2018, we are confident that under Matt’s direction this will be another great addition to the Red & Blue Restaurants group and a great start to the new year.” Red & Blue Restaurants also operates Salt House Tapas and Hanover Street Social.

Brasserie Bar Co to fund ‘settled status’ for non-British EU staff: Brasserie Bar Co, the 36-strong group behind Brasserie Blanc and the White Brasserie Company, is to pay for its 591 non-British EU employees to apply for “settled-status” in the UK following Brexit. Under the EU Settlement Scheme, all EU citizens living in the UK will need to apply for the right to remain in the UK post-Brexit. The application fee is £65 and will give workers who have lived in the UK for five years or more “settled status”. Founder and director Raymond Blanc said: “Being a Frenchman and a UK resident for the past 35 years, this issue is very close to my heart. With the continued uncertainty over the nightmare that is Brexit, the hospitality industry is facing a staffing crisis. Pre-Brexit, there was a shortage of young people entering the industry. Britain’s decision to leave the EU has resulted in a huge decline in the number of people applying for hospitality jobs. Our 1,200-strong team is integral to the success of our business and, by granting them settled status, we will be protecting ‘our family’ and providing them with much-needed security. We are sending out a clear message they are welcome and wanted.”

James Horler steps down as non-executive director at Patisserie Holdings: James Horler has stepped down as a non-executive director of Patisserie Holdings. Horler has decided to concentrate on his role as chief executive of 3Sixty Restaurants. The company is expanding its Ego brand in partnership with Mitchells & Butlers, which bought sector investor Luke Johnson’s minority shareholding in the business in August. Patisserie Holdings stated: “James Horler, non-executive director, has resigned with immediate effect to focus on his role as chief executive at another business. The board would like to thank him for his service.”

Whitbread acquires first Dublin city centre freehold site in ‘significant step’ for Premier Inn expansion plans: Whitbread has acquired its first Dublin city centre freehold site in a “significant step” for the company’s Premier Inn expansion plans in the city. Twilfit House in Jervis Street will be turned into a 180-bedroom hotel and Thyme restaurant as the budget brand seeks up to 2,500 bedrooms in Dublin. Whitbread acquired the freehold from investment fund Abarta Investments, which had secured full planning permission from Dublin City Council to build a 180-bedroom hotel on the site. Whitbread will demolish three-storey Twilfit House and construct a seven-storey Premier Inn. Kevin Murray, Whitbread head of acquisitions (north and Ireland), said: “Securing Twilfit House is an important landmark in Premier Inn’s expansion into Ireland and builds strong momentum to our acquisition drive in Dublin. The deal marks Whitbread’s first freehold investment in Dublin city centre and we are actively pursuing other live freehold and leasehold opportunities, including potential office-to-hotel conversions and going-concern purchases.” Whitbread has already secured planning permission for a 97-bedroom Premier Inn in Dublin’s South Great Georges Street, scheduled to open in summer 2020, while it operates a 213-bedroom Premier Inn at Dublin airport. The brand operates seven hotels in Northern Ireland.

Frankie & Benny’s closes Reading site: The Restaurant Group brand Frankie & Benny’s has closed its site in Reading. The restaurant in Shepherds Hill employed 15 members of staff. Five have been redeployed to other Frankie & Benny’s site, with ten unable to move due to “geographical constraints”. A Frankie and Benny’s spokesman told In Your Area: “The casual dining market is facing various headwinds such as increased property costs, which has impacted certain sites within our leisure portfolio. In light of this backdrop, we have taken the difficult decision to close the Frankie and Benny’s site in Shepherds Hill. We regret the impact on colleagues and will ensure they are supported throughout the process as well as identifying opportunities for those wishing to remain in the business. Where possible, we have looked to redeploy staff to other sites within The Restaurant Group’s portfolio.” The closest Frankie & Benny’s restaurant is now in The Square shopping centre in Camberley, Surrey. The brand’s site in Bracknell closed in January 2018.

Great British Menu chef Tommy Heaney to open Cardiff coffee and wine bar for second site: Tommy Heaney is to open a second site in Cardiff. The Great British Menu chef launched his first solo venture, Heaneys, in Cardiff in October. Now he is set to open a coffee and wine bar next door. Open for breakfast and lunch by day and wine and charcuterie in the evening, the first meal of the day will centre on a cooked breakfast featuring Heaney’s homemade sausages and sourdough. Healthier options will include homemade granola and honeycomb. The lunch menu will include home-cooked stews, house salads, sandwiches and soup to eat in or take away. The venue will also offer Heaney’s freshly cooked crumpets and bagels with house fillings, while meat will be cured, cooked and smoked in-house. From mid-afternoon there will be light bites, charcuterie and cheese on offer. Heaney has teamed up with a local coffee producer to create a home blend that will be roasted on-site, alongside a regularly changing wine list, gin, cocktails and craft beer. The venue will host monthly wine tastings and live music. It will feature bar stools, refectory-style tables and window seating. 

Administrator’s investigation into management of Lincolnshire brewer continues: An investigation into potential falsification of accounts at independent Lincolnshire brewer Tom Wood Beers prior to the company going into administration is continuing. In his progress report, administrator Charles Ranby-Gorwood, of Grimsby-based CRG Insolvency & Financial Recovery, said the administration period had been extended to Friday, 31 May as a result. Ranby-Gorwood began the investigation last year into the way Tom Wood Beers was managed, which may result in court action. He said: “My current investigations into the roles of various people is the main activity. I must remain confidential as to my enquiries at this stage but matters will be more fully reported in due course.” Ranby-Gorwood added the prospect of a dividend greatly depends on the outcome of the investigation. The latest report said there were 48 non-preferential unsecured creditors with an estimated total deficiency of £535,520. So far, claims have been received from 21 creditors, including HM Revenue & Customs, at a total of £388,929. As previously reported, there are no secured creditors. The only potential preferential creditor was Tom Wood, as an employee for a claim against outstanding wages, but this had been mitigated due to “monies owed by the individual”, the report said. The business was sold in November 2017 to Lincolnshire Craft Beers, a company connected to Mark Smith, who was a director of Tom Wood Beers.

Village Hotel Club outlines plans for 50 sites by 2026 as it prepares to open most high-tech property: Village Hotel Club has outlined plans to expand the group to 50 sites by 2026, with potential for up to 100 properties in the UK. The company, which operates 29 hotels, plans to open five hotels during the next two years – in Basingstoke, Cambridge, Milton Keynes, Slough and Southampton. Executive chairman Gary Davis revealed the plans as the company prepared to open its 30th hotel, in Bristol this month. He said: “The openings in Bristol this year and Portsmouth last year mark a turning point in Village Hotel Club’s expansion plans, and Bristol is our most high-tech hotel to date.” Each bedroom is fitted with a virtual concierge – the Amazon Echo or Echo Dot – allowing each guest to order room service, set alarms, call room to room and pick their entertainment without lifting a finger. The Village Hotel Club concept also includes the Village Hotel Pub and Grill as well as a hot-desking business called VWorks, which provides local business with flexible working spaces.

Belhaven has 300th anniversary recognised by Scottish MPs: Belhaven Brewery, which is owned by Greene King, has had its 300th anniversary recognised by Scottish MPs. An early day motion from Labour MP Martin Whitfield, which has received cross-party support, said: “This house welcomes the 300th anniversary of the iconic Belhaven Brewery in Dunbar, the oldest working brewery in Scotland and one of the oldest in Britain. Brewing has taken place on the site for hundreds of years. The brewhouse’s lintel is engraved with the date 1719, recognised as the founding of the present brewery when it was taken over by local market gardener John Johnstone. Belhaven has produced some of Scotland’s most popular beers, including Belhaven Best, Scotland’s best-selling ale. The house acknowledges Belhaven has almost 100 pubs across Scotland and exports its products to markets around the world, congratulates all staff at the brewery on its 300 years of continuous brewing innovation, and wishes everyone at Belhaven many more years of success.”

Beautiful Pubs Collective founder Sam Hagger named business executive of the year: Sam Hagger, founder of The Beautiful Pubs Collective, has been named business executive of the year by the Leicester Mercury – the first time a hospitality business director has been recognised in the awards. The pub company operates the Rutland & Derby Arms and the Knight and Garter, both in Leicester, and The Forge Inn in Glenfield. The Beautiful Pubs Collective employs 90-plus staff and has a turnover of more than £2.5m. Hagger is also behind non-profit recruitment company Hospitality Minds, is a regular contributor to BBC Radio Leicester on food and drink matters and is a steering member of BID Leicester. He said: “I am extremely humbled and proud. It is a fantastic way to celebrate ten years of The Beautiful Pubs Collective.” Hagger founded Ssoosh Inns – or The Beautiful Pubs Collective as it is known locally – in 2008. 

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