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Morning Briefing for pub, restaurant and food wervice operators

Mon 21st Jan 2019 - Propel Monday News Briefing

Story of the Day:

James Horler – Notes can become leading mid-market cafe brand, reports 9% like-for-like trading: Industry veteran James Horler, chairman of nine-strong Notes Coffee Roasters & Bars, has told Propel the company is forging ahead with plans to establish itself as a leading brand on the mid-market cafe scene while the business had been trading at 9% like-for-likes since the last quarter of 2018. Horler, who is also chief executive of 3Sixty Restaurants, said: “Notes is trading at 9% like-for-likes at the moment and has done so for the last quarter of 2018 – we’d like to see that growth continuing. The past six months has seen Notes produce a very strong performance and I believe it’s possible to become a leader in the massive mid-market coffee sector. The growth in this highly successful sector has been phenomenal and the next transition will be to become more premium, as we have seen happen in the wine sector.” Notes’ unique selling point is its single-origin coffee, usually the domain of speciality coffee shops. Horler said: “Notes’ coffee quality is so much better than that available in the mid-market. It’s the equivalent of a good-quality Bordeaux versus a blended wine. It’s a part of the market set to grow and grow as consumers become more discerning. Notes is in a great place to benefit from the growth in premium coffee. It’s not dissimilar to what has happened with craft beer. It may still be a small piece of the overall beer market but its growth has been phenomenal.” Notes is also set to launch an easy-to-use premium coffee solution for restaurants, hotels and bars that want to improve their coffee offer without investing in expensive machines and barista training. Its new Nespresso-compatible coffee capsule is set to launch in the first quarter of this year and, alongside wholesale, will also sell on the home market. Horler said: “Hotels, restaurants and pubs interested in offering more premium coffee can buy from us, which in turn helps to promote the Notes brand more widely. We believe this gives us a USP against the big-brand names selling mainly blended coffee. We believe we can take market share off these operators because we have a better product.” Notes is also seeking new sites – a mix of coffee-only smaller locations of 600 to 700 square feet as well as larger, multi-function venues of 3,000 square feet. Horler said: “We are growing sales and see enormous opportunities from the massive growth that’s to come from the coffee market – the UK is miles behind Europe.” Horler said Notes was also in discussions with SSP Group as it looked to follow in Grind’s footsteps into transport hubs – a move that would take it into direct competition with the mainstream players. The company will launch initiatives to improve service speeds, a key factor in being successful at transport hubs. Notes raised £1.2m on crowdfunding platform Crowdcube last summer, double its initial target, and funds will also be used to upgrade its nine London sites.

Industry News:

Propel Multi Club Conference open for bookings, two free places for operators, Joe Grossman 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. Joe Grossman, founder of the nine-strong Patty & Bun brand, will talk about ten challenges he has overcome in his journey from leading the marketing at Roast to finding a unique position in the better burger market. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at
Network Rail reports food retailers see 10% festive sales growth: Network Rail has reported food retailers at its managed stations saw sales grow 10% during the festive period. Total retail sales were up 2.3%, with increasing numbers of consumers using stations as a one-stop-shop for a range of products. The figures, which reflect sales between 10 November and 22 December, also show growth of 0.6% in like-for-like sales. In total, Network Rail recorded more than £93.8m in sales during the six weeks. There was also a 1% increase in retail footfall, comparing favourably against results in the latest BRC-Springboard and Vacancies Monitor, which showed overall UK retail footfall was down 2.6%. London Bridge (74.7%), Paddington (10.7%) and Charing Cross (7.6%) showed the highest total sales growth in London, with the sales surge at London Bridge and Paddington correlating to Network Rail’s significant investment in regeneration and retail enhancement projects. Meanwhile, Edinburgh Waverley, with 3.5% growth, and Birmingham New Street (2.9%) were the best performers outside London. David Biggs, managing director of Network Rail Property, said: “We are committed to delivering a positive experience for the 900 million people who use our stations each year and therefore any decisions we make around our retail portfolio are centred on what our passengers want. Of course there are wider challenges in the retail market and this has affected some retailers but today’s results show our strategy is paying off and convenience is most definitely king, with station retail continuing to outperform the high street. This is also at a time we are investing in and upgrading our stations, which has an impact on retail. However, this will have long-term positive effects – helping the railway to grow and improve for passengers while creating great places for communities to thrive.”
Bookatable acquires online booking and pre-payment platform EasyPreOrders: Michelin’s reservation service Bookatable has acquired EasyPreOrders, the online table booking and pre-payment platform. Bookatable said the deal would complement the services it offers by adding additional features to its online booking platform. Chief executive Michel Cassius said: “I am excited about what this acquisition means for the development of our business and how it improves our offering for restaurants and diners. We’ve been working exclusively with EasyPreOrders for the past two years and have seen how its solution is responding to market needs.” EasyPreOrders allows booking, ordering and payment to be completed up front. Restaurant owners have an effective way to avoid the cost of no-shows by securing table reservations and are better able to forecast food requirements in their kitchen, while diners can control the budget for the evening and simplify exclusive events and large party payments. EasyPreOrders founder and managing director Mark Roberts said: “Bookatable has always shared EasyPreOrders’ mission of using technology to make going out to eat more streamlined for restaurants and diners alike so we are delighted to join forces to make that happen on a larger scale.” The deal also includes the integration of four EasyPreOrders employees into Bookatable’s team.
MyPubGroup to stage industry’s first virtual recruitment event: West Midlands-based recruitment company MyPubGroup is to stage the hospitality industry’s first virtual recruitment event. is a national online interactive event that showcases job vacancies, business opportunities and agreement types. The event, which will take place on Wednesday, 27 March, will allow key service providers involved in the recruitment process to unite on a single platform to showcase the best of the hospitality sector. As well as the ability to interact directly with potential applicants, will allow recruiters to generate interest in their vacancies without leaving their desks. Managing director Helen Lees said: “As a dot-com business, innovation is at the core of what we do. I am thrilled we will host an industry-first, recruitment-focused event that utilises dynamic technology with the express purpose of promoting our fantastic industry and the opportunities it offers.” Client director Rachael Nixon added: “Our pub company partners have welcomed, acknowledging cross-company collaboration is essential to promote the industry and engage with as many potential applicants as possible. This is a win-win situation for all.”

Reward offered for missing Restaurant Marketer & Innovator prop: A popular prop from the Restaurant Marketer & Innovator European Summit held last week by Propel and Think Hospitality has gone missing. The giant “R” was last seen being smuggled out of Cafe de Paris in the early hours of the morning after the awards. Organisers are offering a reward for its recovery in the form of a free ticket to next year’s event. Co-founder James Hacon said: “We can only imagine that someone wanted a bigger trophy than the ones we offered to the winners. We are intrigued as to the adventure it has been on, but are willing to treat any information that comes forward with absolute confidentiality.”

Company News:

Vulture funds circle PizzaExpress: The Sunday Times has reported so-called vulture funds are believed to be stalking PizzaExpress, buying up the company’s debt on the cheap in an attempt to seize control. The company’s bonds, which are trading at 47p in the pound, compared with 90p a year ago, saw a surge in trading at the end of last week, suggesting opportunists view the chain as vulnerable. One investor said he had been tracking PizzaExpress for the past nine months with a view to taking a position. “If you could get a decent percentage of the bonds at 50p in the pound, you could get control of the whole chain for between £400m and £500m,” he said. A source told the newspaper: "It looks very much like somebody is trying to take control of the business, buy it for cheap via controlling the debt then flip it on to someone who is willing to invest. There is some sort of deal to be done." 
Patisserie Valerie teeters on the brink: The Sunday Times has claimed Patisserie Valerie could go bust on Monday (21 January) if emergency talks between leading shareholder Luke Johnson and its banks fail. It stated: "The entrepreneur has been scrambling to extend a standstill agreement on the company’s bank facilities, which expired on Friday (18 January). If he fails, HSBC and Barclays could demand repayment of £9.7m of overdraft debt. Johnson could be forced to plough in more cash to stop Patisserie Valerie tipping into administration, with 2,800 jobs at risk. He put in £20m of his own money to keep it afloat after the shock discovery in October of a £40m hole in the accounts and what the company called ‘significant, potentially fraudulent, accounting irregularities’.” 
London Cocktail Club placed on the market: London Cocktail Club, the wet-led operator founded by John James Goodman and James Hopkins, with Dragon's Den star Sarah Willingham and chef restaurateur Raymond Blanc on the board, has been placed on the market, according to The Sunday Times. The company, which has 13 sites, produced turnover of £4,155,755 in the year to 20 June 2017, the most recent publicly available accounts, and pre-tax profit of £239,578. It has just opened its latest venue in the capital – London Cocktail Club Old Street. The venue, which features a secret garden theme, is based in Worship Street. Visitors enter the bar below a wisteria tree hanging from a mystical wall of mirrors. Cocktails are served in the Victorian-esque veranda, which features arches adorned in roses and swinging seats. There are also Moroccan-esque festival tents with draping rouge curtains and opulent lamps. Hidden away, a private conservatory hosts day beds and a fountain of youth. 

McMullen appoints new property director: Hertfordshire-based brewer and retailer McMullen has appointed Jenny Strathern as its new property director, Propel has learned. Strathern, who joins from Prezzo, succeeds Andrew Newbury, who will retire in the spring. Strathern has joined the board with immediate effect and will report to joint managing director Tom McMullen. She has been head of asset management at Prezzo for the past three years and was previously property director at the Parks Trust. McMullen said: “Having completed 30 years with Macs, Andrew is taking well-earned retirement. He has been fundamental to the growth of our business over this time, in particular as the board director responsible for our estate over the past 14 years. We are extremely grateful for his service and wish him all the best in his retirement. Jenny brings a wealth of experience in the commercial property market, including the casual dining and pubs sector, and in addition to her day job managing our estate and driving our freehold acquisition programme, Jenny will bring further balance to our board and decision-making.”
BrewDog updates on bars pipeline for 2019: Scottish brewer and retailer BrewDog has updated on its bars pipeline for 2019, with at least 20 sites set to open. The first opening of the year will be on Friday (25 January) in Carlisle. The company is also opening a bar in Dalston, east London, in March following “several false starts”. In the same month, BrewDog plans to open sites in Peterhead and Inverurie. A brewpub – its second in the UK – is set to launch at the University Green development in Manchester. BrewDog also revealed it is in legals for sites in Inverness and Cambridge, while discussions are taking place for an outlet in St Andrews. The company is also adding a taproom and takeaway shop at its warehouse off the M8 north of Motherwell. Internationally, its next US bar is set to arrive this summer in Cincinnati – its third site in Ohio – followed by Indianapolis. The company has signed a deal for its debut site in Canada, in Toronto, and picked up the keys for its first bar in Paris. BrewDog also plans to double up in the French capital with a brewpub. Elsewhere in Europe, sites will open in Hamburg, Germany, and Helsingborg for its sixth bar in Sweden. It also has applied for a licence to open a brewpub in Dublin. BrewDog said it was “very close” to agreeing a location for its first bar in Shanghai, while it also has its eyes on Kuala Lumpur. Meanwhile, it plans to open a bar in Brisbane having broken ground on its Australian brewery in the city.
Three Joes aims to extend crowdfunding campaign to finance fifth site after hitting £400,000 target: Sourdough pizza restaurant Three Joes, co-founded by Tim Hall, founder of London-based healthy eating brand Pod, is aiming to extend its fund-raise on crowdfunding platform Crowdcube to finance a fifth site after hitting its initial £400,000 target. Hall, who launched Three Joes in 2017 with ex-Pod food director Emma Blackmore and former Byron operations director Peter Bruton, told Propel the funding market was “as tough as I’ve seen it” due to macro-economic concerns and the public difficulties encountered by a range of private equity-backed restaurant chains over the past year or so. Three Joes first restaurant opened in Fareham in August 2017, with a second site added last summer in Winchester, which is generating monthly Ebitda of £10,000. Three Joes is in advanced discussions to open its third site, at The Beacon, a redeveloped shopping centre in Eastbourne, with talks taking place on a fourth site in the Home Counties. Three Joes is offering 6.25% equity in return for the investment, giving the company a pre-money valuation of £6m. So far, 223 investors have pledged £412,580 and the campaign is now "overfunding" with 18 days remaining. Hall said: “This enables us to open two great new restaurants in 2019 and to begin developing a pipeline of sites for the future. We’re still tiny but many of the key ingredients at Three Joes feel quite similar to Pod. We’re a challenger brand expanding in a distressed market place with huge support and encouragement flowing in from our own customers hence our amazing TripAdvisor position. The key difference with Three Joes is the business and board is controlled and operated by a small team of experienced hospitality experts with no requirement to flatter and handhold non-executive directors. We’re pretty sure this structure will enable us to grow fast and profitably while avoiding unhelpful distractions. The timing for a small, new brand with such an experienced management team may be serendipitous. I raised almost £10m of equity for Pod over a decade and the funding market is as tough as I’ve seen it. However, by inviting our customers and advocates to back us financially, we have been fortunate enough to secure the funding we need to grow.”

Soho House to launch budget motel this month: Soho House will launch its new budget hotel concept, Mollie’s Motel & Diner, this month. Inspired by 1950s American motels and diners, the first Mollie’s will open in Buckland in Oxfordshire. With an initial rate of £75 a room, the first Mollie’s will feature 79 bedrooms, with king-size beds, Egyptian cotton sheets and rainforest showers. Guests will also have access to free tea and coffee, with a general store providing space to work and somewhere to stock up on essentials. It will offer a classic American menu, with bacon and sausage baps and grain bowls for breakfast; nachos, rotisserie chicken with mac ‘n’ cheese, and Dirty Burgers for lunch and dinner plus shakes, juices and sodas. Plans for Mollie’s in both Manchester and Bristol are already in the works.

SSP plans eighth Beer House, within Norwich train station: SSP Group, the UK-based transport hub foodservice specialist, has applied to Norwich City Council to open its Beer House brand in the empty unit between WHSmith and the newly opened M&S Food within Norwich train station, its eighth site. The new pub will have raised seating and “rusticated brickwork”. The Beer House currently has seven branches across the UK including London Victoria, Manchester Victoria and Newcastle airport. It sells traditional food such as fish and chips, burgers and a full English breakfast. Some of the branches also sell regional food, including haggis and neeps and tatties at the Glasgow Central Beer House.
Center Parcs set to open Irish site earlier than planned this year: Center Parcs will open its first site in Ireland – Longford Forest holiday resort – this summer. It will offer 470 lodges and 30 apartments set in more than 400 acres of woodland – and is now taking bookings from 23 August. The €233m facility was previously only able to take bookings from November but now it'll be ready to take in as many as 2,500 guests at a time this summer.
Deltic closes Chicago’s in Basildon after selling site to Adventure Leisure: Deltic Group has closed its Chicago’s site in Basildon, Essex, after a farewell party on Saturday (19 January) having sold the site to Adventure Leisure, Propel has learned. Adventure Leisure has bought the property at Festival Leisure Park for its adventure golf brand Mr Mulligan’s Lost World Golf. In total, 18 staff were employed at Chicago’s and many have transferred to alternative Deltic venues in and around Basildon. A Deltic spokeswoman said: “Our big sister venue, Unit 7, is ready to welcome fans of Chicago’s with its party room, Vinyl, plus a great line-up of entertainment.” Last week, Propel reported Adventure Leisure had submitted plans to Basildon Council to convert the site. The plan includes two nine-hole crazy golf courses, a bar, restaurant and mezzanine. Adventure Leisure operates eight Mr Mulligan’s Lost World Golf sites, including in Cheltenham and Milton Keynes.
Boparan to convert original Ed’s Easy Diner to third Slim Chickens site: Boparan Restaurant Group (BRG) is to convert the original Ed’s Easy Diner site in Soho to its third Slim Chickens restaurant. BRG partnered with Slim Chickens USA in January last year to bring the fast-casual, fresh chicken brand to the UK market. The debut site opened in James Street, Marylebone, in March with a second following at the St David’s shopping centre in Cardiff in December. Now BRG plans to convert its Ed’s Easy Diner on the corner of Old Compton Street and Moor Street, reports Hot Dinners. The diner opened in 1987 and for almost 20 years was a sole site for owner Barry Margolis until he opened two more restaurants in London. After Margolis’ death, the business was put into trust and eventually sold in 2009. From there it boomed to almost 60 restaurants before going into administration in 2016. BRG bought the Ed’s Easy Diner brand and 33 of the company’s restaurants for £8.75m in a pre-pack agreement. BRG plans to roll out Slim Chickens, which has more than 80 outlets in the US, to other cities in the UK and Ireland.
M&B partners with AB InBev on alcohol-free beer campaign aimed at driving pub footfall, bringing O'Neill's brand back to Nottingham 15 years after closing site: Mitchells & Butlers (M&B) has partnered with Anheuseur-Busch InBev (AB InBev) on an alcohol-free beer campaign aimed at driving footfall into its pubs. The campaign, which will run at more than 1,000 M&B pubs, offers consumers a free bottle of Becks Blue from Monday (21 January) until Sunday (27 January). The offer is only redeemable in pubs and bars to drive footfall during what is a quiet period of the year for the on-trade. At the same time, the initiative positions participating businesses as champions of moderation, responding to the wants and needs of their customers. M&B director of brand marketing Anna-Marie Mason said: “We know January is a key period for moderation and we want to help our customers with their goals. We want them to experience the friendly surroundings of our pubs and bars but not give up on their resolutions.” Rory McLellan, on-trade sales director at AB InBev UK, added: “When speaking with our partners we often hear the same concerns, that after a busy Christmas and New Year’s pubs struggle to get people though the door in January. We wanted to create a fun campaign that would help the on-trade boost footfall while also being mindful of consumers’ growing appetite for abstinence and moderation.” Meanwhile, M&B is to open an O'Neill's Irish bar in Nottingham more than 15 years after closing in the city. M&B shut O'Neill's in Market Street in October 2003 to make way for 1980s-themed nightclub Reflex and then Copper. The brand will now return to Nottingham on Valentine's Day in the current premises of The Bank in Beastmarket Hill, which is owned by M&B. 

Charles Wells recognises pub partners at annual awards: Bedford-based brewer and retailer Charles Wells has recognised the best in business across its 174 leased and tenanted premises during its annual awards. Ten accolades were handed out at a ceremony at The Bedford Swan Hotel. Winners included The Nightingale in Bicester, which scooped best community pub; The Embankment in Bedford, which won best marketed and champion pub; while The Cross in Kenilworth netted the best premium food offer award. Chief executive Justin Phillimore said: “It is important for us to give our pub partners the recognition they deserve for their contributions throughout the year and our annual awards are an integral part of us doing so. Seeing what great things have come during 2018, we’re all very excited about what 2019 has to offer.”
Cornish events company extends £250,000 crowdfunding campaign to expand offering at 10,000-capacity venue: Cornwall-based events company The Wyldes has extended its £250,000 fund-raise on crowdfunding platform Crowdcube for phase two of the development of its 10,000-capacity concert venue. The company is offering 4.76% equity in return for investment, giving the company a pre-money valuation of £5m. So far, 103 investors have pledged £176,180 with 23 days of the campaign remaining. The company stated: “We have extended the campaign into February as we are in talks with a number of potentially large investors that need a bit more time to work things through.” The 150-acre, eponymous venue near Bude overlooks an area of outstanding beauty and has hosted more than 50,000 visitors. Founded in 2008, the venue hosts its own festival and has seen a “6,313% increase in annual ticket sales between 2006 and 2018”. The pitch states: “The Wyldes has three permanent stages, eight bars, catering facilities, and a team and infrastructure in place. We are producing two or three large-scale music-based events per year during summer and we’re ready to improve our infrastructure and assets to bring a larger, more diverse range of increased-capacity shows throughout all seasons. These improvements will also increase the profitability of each event by reducing hire costs and enabling new revenue streams, including options for luxury accommodation on-site.”
Amateur chefs offered chance of six-month Brixton residency: Amateur chefs have been offered the chance to win a six-month residency in one of the capital’s food markets. Hondo Enterprises, owner of the Brixton Village and Market Row arcade, is holding a competition “to find the next big talent in food”. It has one category for London home cooks and another for more experienced chefs from Lambeth who already run a small commercial venture such as a supper club or street food stall. Shortlisted finalists will pitch to a panel of judges including James Cochran, of Islington’s 1251, Jackson Boxer, of St Leonards in Shoreditch, and Claire Ptak, who baked the cake for the wedding of Prince Harry and Meghan Markle. The two winners will be given a space in Brixton Village from this summer, supported by a team of mentors, including food critic Charles Nyereyegona and chef Shakya Manage, founder of Sri Lankan Supper Club. Hondo’s Alistair Maddox said Brixton Village’s aim was “to celebrate food and community and support entrepreneurship”.
Easyhotel opens Ipswich site: Easyhotel, the owner, developer and operator of “super budget” branded hotels, has opened a site in Ipswich. The company has converted the vacant Assembly Rooms building in Northgate Street into a 96-bedroom hotel. Easyhotel acquired the grade II-listed building, which was constructed in the early 1800s and most recently functioned as a bar and nightclub, in January 2016. Ipswich has joined Easyhotel’s company-owned portfolio, which consists of 11 sites totalling 1,219 bedrooms. It has a further 24 franchised hotels with 2,039 bedrooms.

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