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Morning Briefing for pub, restaurant and food wervice operators

Thu 31st Jan 2019 - Propel Thursday News Briefing

Story of the Day:

Leisure vacancy rate hits five-year high although bar and restaurant numbers continue to grow: The number of vacant units in the leisure sector is at its highest level in five years, new research has revealed. Data from Local Data Company (LDC) covering changes in the retail and leisure market during 2018, revealed the leisure vacancy rate has been creeping up and now sits at 8.5%. The report said this had been caused by the recent flurry of administrations and company voluntary arrangements (CVAs) in the casual dining sector alongside a cautious market. The vacancy rate in Britain rose from 11.2% to 11.5% during 2018 but is still lower than the 12.6% seen in 2013. Despite the increased vacancy rate, leisure businesses continued to see growth during the year. Restaurants saw net growth of 218 units, beaten only by the barber’s shop sub-category, which grew by 813 units, and beauty salons (495 units). Cafes and tearooms added another net 214 units while bars were up 145 units and ice cream parlours 92 units. Increasing numbers of dessert parlours are coming into the market, while the popularity of 24-hour, low-cost gyms such as PureGym continues to gather pace. The sub-category that closed the most UK units was banks (716 net closures) followed by pubs (636). For the first time in recent years, the total number of occupied units at retail parks declined, by 1.3%, as some of the larger-format stores tackled administrations or CVAs. Between 2017 and 2018, there was an 18.8% rise in the number of retail units – live and vacant – that were split into multiple units, redeveloped for warehousing, office or residential use, or demolished. LDC senior relationship manager Lucy Stainton said: “Perhaps the most defining feature of 2018 is the first-time reversal of fortunes in the leisure space. This has largely been driven by a decline in the mid-market casual dining space. The key areas of growth across the past 12 months are skewed towards ‘lifestyle’ brands and offers. This shows consumers continue to be driven by newness and experience, presenting increasing challenges for more legacy operators. We predict the overall size of the physical retail and leisure market will continue to shrink as shown by the acceleration of retail stock changing to other uses such as office or residential space in 2018. However, we also expect to see a continued flurry of new entrants to the market across the retail and leisure spaces as new businesses seek to capture consumer appetite for originality – albeit potentially to the continued detriment of operators that fail to tweak and build on their concepts accordingly.”

Industry News:

Propel Multi Club Conference open for bookings, two free places for operators, Alastair Scott 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. Alastair Scott, co-founder of food-led operator Malvern Inns and Catton Hospitality, will talk about how the company has set about creating a tool to motivate staff and optimise shift performance. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at

UK hotel transactions see slowdown with £1bn sales fall in 2018: Hotel transactions in the UK have slowed with a £1bn fall in the sale of hotels during 2018, according to a new report. The UK Hotel Market Tracker, produced by HVS London, AlixPartners and STR, said the 19% fall could be attributed to buyers and sellers both waiting for a Brexit solution and sellers being keen to avoid selling too cheaply. HVS chairman Russell Kett said: “If a Brexit solution is found quickly that is well received by the financial markets we could see some of the remaining private equity funds’ holdings making a dash for the market. Otherwise buyers and sellers will wait for the outcome so transaction activity will remain sluggish for the time being.” The report also showed the fortunes of London’s hotels compared with those in the regions widened in the fourth quarter of 2018 as occupancy in London rose 5% year-on-year compared with a more modest 1% increase in hotels outside the capital. Average room rates also rose 5% in London’s hotels, to £157.20, boosting revpar by 10%. Revpar growth was 3% for the full year. Conversely in the fourth quarter, hotels in the regions failed to see any growth in average room rates, causing revpar to plateau. For the full year, however, revpar in the provinces grew 2%. Kett said: “For the UK’s hotels, the fourth quarter was a very different trading picture in London compared with outside the capital. Hotel supply outside London grew 1.8%, causing supply to exceed demand. As a result of more intense competition, operators were unable to lift average room rates. While supply growth was also strong in London at 2%, demand in 2018 resulting from a number of high-profile events boosted visitor numbers and meant in the fourth quarter London’s operators were able to mitigate the impact of the increasing number of hotels rooms available.” According to the report supply is expected to grow further in 2019 inside and outside London, with a 4% rise in inventory in the capital and a 3.3% supply growth outside London.

KAM Media launches report revealing insights into where consumers decide to eat out: Insights agency KAM Media has launched a report investigating how customers decide where to eat out of home. The report – From Plan To Plate – has been created in association with Think Hospitality and Restaurant Marketer & Innovator. It states there are 130,000 different journeys a customer can make between thinking about eating out to when they pay the bill and reveals how you can influence those people. The report, which covers 1,000 UK consumers who have eaten breakfast, brunch, lunch or dinner in a pub or restaurant, found more than half of consumers ate at a site because they wanted to “experience the venue” rather than for a specific occasion. The study said offering an exceptional or unique experience would benefit operators as one-third of respondents “make up” an event as an excuse to dine out. Respondents still prefer to make reservations by phone, although this is shifting towards online with almost two-fifths (39%) of 18 to 34-year-olds preferring to book online compared with 19% of over-55s. The top “turn offs” to booking online were “I like to speak to a human being”, “you can’t ask for a specific table” and “I’m worried my reservation will get lost”. Social media, especially Instagram, are playing a significant role in influencing customer’s eating out decisions. More than one-third of respondents have taken a photo of their food in a restaurant or pub and 50% of 18 to 34-year-olds have posted a photo of their dish on social media. Another third of all respondents admitted they had been influenced to choose a particular venue by how “photogenic” the dishes were. KAM Media managing director Katy Moses said: “This report plugs one of the main knowledge gaps we have in the hospitality industry – why and how customers make the decisions they do at all touch points along the eating out of home journey. It’s a detailed look into the mind of the pub restaurant customer and will help our clients, operators and suppliers better understand how to market to them and affect them at each touch point.” For more information about the report, email or visit

HIT Training calls on companies to fund apprenticeships via new campaign: HIT Training, the national apprenticeship provider to the hospitality industry, has launched a campaign that calls on sector businesses to fund apprenticeships. The campaign, entitled Don’t Waste: The Future Of Hospitality, calls on businesses that pay the Apprenticeship Levy to fund at least one apprenticeship outside their company as new research revealed almost two-thirds (65%) of levy-paying hospitality businesses are unaware they can transfer 10% of their funds to SMEs or charities in the sector, a figure that will rise to 25% this year. HIT Training said with £1.28bn of unspent levy funding in the UK and less than half of hospitality businesses having used their Apprenticeship Levy, there was an untapped opportunity to use the capital to tackle the skills shortage and protect the sector’s future. Companies already signed-up to the initiative include Bidfood, UKHospitality, the Institute of Hospitality and The Springboard Charity. HIT Training managing director Jill Whittaker said: “The year ahead is going to be a challenging one for everyone so we need to do all we can to protect our industry and provide aspirational career opportunities for the next generation of hospitality stars.” HIT Training has created a pledge portal where companies can commit their support to transfer a percentage of their levy fund or download more information on how the levy transfer process works. For more information, click here 

Company News:

Gerry Ford – there’s potential to at least double the size of Coffee#1 in the UK: Caffe Nero founder and group chief executive Gerry Ford has told Propel there is potential to at least double the size of Coffee#1 in the UK. Caffe Nero has acquired a 70% stake in Coffee#1 with Welsh brewer and retailer SA Brain, which had owned Coffee#1 since 2011, retaining 30%. Ford said it would look to grow the 92-strong Coffee#1, which will remain a standalone business, outwards from its base across Wales, Midlands and southern England. He said: “It has a lot of brand awareness within the area it covers so it makes sense to push out from the edges and continue growing that way. In the short term, the next three to five years, our focus will be on growth in the UK. I’m not sure it can grow to the 750 sites Caffe Nero has in the UK but I think there’s potential to have a least double what we have now.” Ford revealed Caffe Nero started having conversations with SA Brain about three years ago, shortly after it began looking at strategic options for Coffee#1. He said: “Over the years we’ve kept in touch and we’ve managed to work out something that is mutually beneficial.”

Crussh extends vegan store trial following ‘overwhelming response’: London-based healthy food and juice brand Crussh, which turned its Soho site into a vegan pop-up this month, is extending the trial after an “overwhelming” response. Crussh will extend its offer at the Broadwick Street store until at least the end of February. The fully plant-based menu features more than 70 vegan recipes. The company said the move would allow it to gain further insight into how a fully plant-based operation could become a more sustainable business model for the future. Head of marketing Helen Harrison said: “Customer response has been fascinating and incredibly positive. Our regulars have been really supportive of the idea, welcoming the fact we’re making it so easy for them to choose a plant-based option. We’ve also been able to reach new customers – vegans, vegetarians and those opting for a flexitarian approach. We’ve also had some great feedback from those with dairy allergies who can now come to the store and choose whatever they like without having to be mindful of allergens. We’ve been asking customers to vote and it’s currently about six to one in favour of keeping it vegan. However, we think it’s important to see how the store trades once Veganuary passes to understand whether the offer is strong enough to sustain the store outside this period.” Crussh has introduced two vegan breakfast lines that will initially be exclusive to the Broadwick Street store – a scrambled tofu and spinach pot, and a Mexican spiced bean pot, both served with a choice of toppings. Crussh’s menu is already more than 45% plant-based – an increase from 22% in January 2017 – and is currently selling more than 50 vegan products. The company operates 35 sites across London.   

7Bone Burger co-founder gets go-ahead to open Dorset micro-pub: Rich Zammit, co-founder of 7Bone Burger Co, has been given the go-ahead to open a micro-pub in Dorset. Zammit has had his proposal to convert a disused Barclays bank branch in Ashley Cross approved by Poole Council. Zammit said the Crazy Camel would sell premium craft ale and be an “alternative” to mainstream pubs. Officers had backed the proposal but it was called in for consideration by members of the planning committee following concerns over the number of eating and drinking businesses already operating in the area. However, Zammit said he was willing to work with residents to create a management plan to reduce any potential problems. He told the Daily Echo: “I believe this addition to the Ashley Cross area would be a good one and add to the vitality of the area.” 7Bone, founded by Zammit and Matt Mollicone, opened its first restaurant in Southampton in 2013, followed by Bournemouth the following year. In August 2016, Kings Park Capital took an equity stake in the business and, with its financial backing, 7Bone now operates nine sites.

Cheshire-based Almond Family Pubs acquires Stockport site for sixth venue: Cheshire-based Almond Family Pubs has acquired a pub in Stockport for its sixth site. The Jolly Sailor in Davenport will undergo a £1m refurbishment ahead of reopening in “late spring” in a move that will create 40 jobs. Almond Family Pubs, run by former hotelier Doug Almond and his children James and Vicki, has a reputation for taking on and turning around “unloved”pubs. Its formula includes a carvery but the Jolly Sailor will also offer an extended menu of pub classics and an orangery, which will create additional dining space. Doug Almond told Marketing Stockport: “We have been listening closely to what the locals want and will be doing what we can to make sure the pub works for them. We will serve our famous carvery but, having listened and seen the success of our extended menus in our existing pubs, we will offer a good pub menu alongside and keep dedicated areas for drinkers. It’s safe to say the locals want their pub back and that’s exactly what we’re going to give them.” The company’s other pubs are the Fletchers Arms, The Hesketh, the Three Bears, Puss In Boots, and the Spread Eagle, all in and around Stockport.

Starbucks named world’s fifth most-admired company, comes top in foodservice sector: Starbucks is the fifth most-admired company in the world, according to research by Fortune magazine, and is the number-one company in the foodservice industry. Starbucks appeared on the 2018 list for a 17th year in a row, while Apple topped it for a 12th year in a row followed by Amazon, Berkshire Hathaway, Walt Disney, Starbucks, Microsoft, Alphabet, Netflix, JP Morgan Chase and FedEx. Fortune created the list from a starting point of 1,000 companies based in the US and 500 from the rest of the world with revenue of at least $10bn. It then surveyed 3,900 executives, directors and analysts, who rated businesses in their own industry on nine criteria. Meanwhile, Starbucks chief executive Kevin Johnson has told staff “nothing changes” for the company regarding former boss Howard Schultz’s possible presidential bid, reports Nation’s Restaurant News. Schultz reiterated he might launch a presidential campaign but only if he believed it was “possible to win”. Johnson, in a letter to staff, embraced the legacy of the brand’s former chief executive, who stepped down as executive chairman in June 2018, and distanced Starbucks from Schultz’s political aspirations. He said: “Whatever he decides, it is my personal belief Howard will continue to make a positive impact on the lives he touches, and I wish him well. Many of us will inevitably be asked if the company supports a possible presidential candidacy of Howard and what changes for Starbucks? As a company, we don’t get involved in national political campaigns – and nothing changes for Starbucks.”

Caravan to operate coffee counters as part of Office Group partnership: Caravan, the London-based restaurant, bar and coffee-roasting concept, is to run coffee counters at a number of sites operated by co-working company The Office Group (TOG). The deal is TOG’s first hospitality partnership and will see Caravan roast an exclusive single-origin coffee for the company’s workspaces across the UK. The coffee will be available in espresso, filter and decaffeinated versions. Caravan co-founder and commercial director Chris Ammermann said: “We are hugely excited to partner with co-working pioneers The Office Group, supplying its members with freshly roasted craft coffee from our new Islington roastery. We are thrilled to be working with people who share our passion for great, sustainably-sourced coffee.” Caravan operates five sites in London.

Yard & Coop to open third site, in Leeds: Fried chicken concept Yard & Coop, owned by former Revolution Bars Group employees Carl and Laura Morris, is to open its third site, in Leeds. Yard & Coop will open the 120-cover venue in York Place in the former home of Miah’s Kitchen, creating 30 jobs. As with Yard & Coop’s other restaurants in Liverpool and Manchester, the Leeds site will source all its chicken from a farm in Shropshire. Carl Morris told BDaily: “Leeds is an amazing city and we’re extremely excited to bring the home of buttermilk fried chicken to the people of Yorkshire.” The Morris’ founded Yard & Coop in 2015 with a debut site in Manchester’s Northern Quarter. In December 2016, the company expanded with a second venue at the Liverpool ONE shopping and leisure complex.

Brunning & Price resubmits plans to turn 17th century farmhouse near Solihull into pub restaurant: Brunning & Price, the gastro-pub division of The Restaurant Group, has resubmitted plans to turn a listed 17th century farmhouse near Solihull into a pub restaurant. Tidbury Green Farm in Earlswood features four buildings including a cow house, pigsties and barns that were awarded grade II-listed status in 2016. The company has made changes to the application lodged last year with Solihull Council following residents’ concerns over work on listed buildings and protected trees, reports Birmingham Live. The number of parking spaces has reduced from 58 to 49. A planning statement said: “The ground floor of the farmhouse, with the exception of the existing entrance hall and dining room and large barn, are proposed to provide the dining area for the pub restaurant. The existing dining room, front entrance and upper floors of the farmhouse would provide staff facilities and manager’s accommodation.” Land surrounding the farmhouse in Fulford Hall Road has been sold for housing, with construction work currently taking place. Brunning & Price operates 70 pub restaurants across the UK.

Trio of operators sign for Portman Marylebone: Three operators – Blue Dot Coffee, Everbean Deli and A.O.K. Kitchen & Bakery – have signed to open sites in Marylebone, central London. The brands will open as part of the 110-acre Portman Estate, taking the estate’s dining offer to 40 restaurants, cafes and delis. Everbean Deli has opened at a 900 square foot space in Seymour Place offering breakfast, brunch and lunch menus to eat in or take away. Barista brand Blue Dot Coffee will open at a 450 square foot site in the spring offering artisan coffee and hot and cold snacks from its site in Old Quebec Street. As previously reported by Propel, the brands will be joined by A.O.K. Kitchen & Bakery, a debut restaurant for Kelly Landesberg, daughter of Admiral Taverns founder Gary Landesberg. A.O.K. is an all-day healthy food concept focusing on gluten, dairy and refined sugar-free dishes and will launch in a 3,500 square foot site in Dorset Street on Monday, 18 February. Philip Norris, head of retail at The Portman Estate, said: “We are delighted independent businesses and entrepreneurs continue to choose this quarter of the West End to open their restaurants and cafes. The mix of owner-operated shops and restaurants is an important part of Marylebone’s unique character.”

Cubana launches £106,000 crowdfunding campaign to develop roof terrace at Waterloo site: London-based Cuban restaurant Cubana has launched a £106,000 fund-raise on crowdfunding platform Crowd2Fund to develop the roof terrace at its Waterloo site into a terrace bar. The company is offering a 10% interest-paying mini-bond with a term of 36 months. Cubana, led by Phillip Oppenheim, also operates a restaurant in Smithfield. The pitch states: “Our two locations, Waterloo and Smithfield, emulate the soul of Cuba, with live music and salsa clubs hosted on Fridays and Saturdays. We take pride in our vibrant, colourful decor that gives the place a fun atmosphere and has led to us being used as a location for several film and commercial photo shoots. The next step for Cubana is to develop our space further by renovating our Waterloo rooftop into a terrace bar. We will use the funds raised in this campaign to facilitate this, ready for the uptake of sales in the spring and summer.” In 2017, Cubana raised more than £300,000 through two rounds on Crowd2Fund to fund its Smithfield site.

Shutov to open Bob Bob Ricard sister site in March: Bob Bob Ricard owner Leonid Shutov is to open its much-delayed sister site – on Monday, 25 March. Located on level eight of the Leadenhall building – also known as the Cheesegrater – Bob Bob Cité will “break new ground” in design and menu, with the latter overseen by Eric Chavot. The 190-cover restaurant will be set across two rooms. Bob Bob Ricard’s “press for Champagne” buttons will also be an integral part of the new site. Shutov told Harden’s: “Good things come to those who wait. I am delighted we will be opening Bob Bob Cité a mere 14 months later than we intended. Bob Bob Ricard was two years late when we built it so I feel this is already a big improvement! One concierge service told us they’ve had more than 5,000 reservation requests for Bob Bob Cité since it has been delayed. I am thrilled that, come March, we will be able to welcome everyone to enjoy Eric’s outstanding food in a restaurant I hope will become as much a City of London landmark as the Cheesegrater itself.”

Birmingham-based pan-Asian restaurant takes over former Frankie & Benny’s in Coventry for second site: Birmingham-based pan-Asian restaurant Oodles n’Oodles is to open its second site, in Coventry. The concept has taken over a site in Tile Hill previously occupied by The Restaurant Group brand Frankie & Benny’s. Oodles n’Oodles offers a variety of dishes with a focus on noodles. The Coventry site will be run by franchisee Imran Asif, with work to fit out the restaurant currently under way. He told Coventry Live: “I am Coventry born and bred and the choice for places to eat and drink has significantly increased recently. There is a real buzz about the city – you can see a difference. We want to be part of that and part of a successful city. We already have a restaurant in Star City that has been going ten years and we think now is the right time to open in Coventry.”

BaxterStorey opens first vegan outlet, plans concept expansion: Contract catering company BaxterStorey has opened its first vegan outlet to meet rapidly growing demand for plant-based alternatives – with plans to expand the concept. The cafe has launched at the University of Stirling in Scotland, where more than 14,000 students are enrolled. The venue features an entirely plant-based menu, including vegan carrot cake and vegan sausage rolls, with soups such as cauliflower minestrone and curried yellow pea. Minor Figures cold brew and banana split Rebel Kitchen dairy-free milk coffee are also on offer. Baxterstorey said it has ambitions to expand the dedicated vegan outlet to other universities in the area. Managing director Jeremy Wood said: “BaxterStorey prides itself on being a sustainable business and, with the growing trend for more plant-based options, we’re proud to be able to introduce a range of beverages and snacks that benefit the environment as well as the health and well-being of our customers.”

CMA clears PepsiCo’s acquisition of Pipers Crisps: PepsiCo’s acquisition of Pipers Crisps has been cleared by the Competition and Markets Authority (CMA). PepsiCo announced in November it planned to buy Pipers, which is stocked by a number of sector operators, for an undisclosed sum. The CMA decided to look at the deal to see if there would be a lessening of competition but has ruled the deal can go ahead. It stated: “The CMA has decided, on the information currently available to it, not to refer the following merger to a Phase 2 investigation under the provisions of the Enterprise Act 2002.” PepsiCo said it plans to accelerate the growth of the Pipers business in the UK and continue to develop exports, while Pipers would complement its own savoury snacks portfolio.

Stokes Tea & Coffee secures six-figure funding package to support expansion: Lincoln-based cafe operator Stokes Tea & Coffee has secured a six-figure funding package to support expansion at its headquarters. The company has been awarded funding from HSBC to boost its coffee and equipment trade and increase its servicing offer. The money will also be invested in the continued £2m refurbishment of its headquarters at The Lawn. The grade II-listed building, formerly run as a psychiatric hospital and then a City of Lincoln Council venue, has already been transformed into a roasting, packaging and distribution hub. It’s also the home of the company’s third cafe, offices and a variety of independent retailers and business owners. A barista training centre also operates at the site. Director of Stokes Tea & Coffee Nick Peel told the Lincolnite: “We are continuing to see increased demand for quality tea and coffee and we’re perfectly placed to support the industry with our wholesale and service business.” The deal is part of HSBC UK’s £1.1bn lending fund to support small and medium-sized enterprises.

St John’s College seeks new operator for historic Oxford pub: St John’s College is seeking a new operator for its historic Lamb & Flag pub in Oxford city centre. The 17th century pub is being offered free of tie through agent Savills and is available for a term of no more than five years. The Lamb & Flag lies on the eastern side of St Giles and is close to Oxford’s colleges. The customer areas are set across the ground floor and comprise a front and middle bar, a snug and rear lounge. The pub has retained its wood-panelled walls, flagstone flooring and fireplace. Famous novelists who have frequented the Lamb & Flag include JRR Tolkien, CS Lewis and Thomas Hardy, who set part of his Jude The Obscure novel in the inn. Chris Bickle, director in the licensed leisure team at Savills, said: “Oxford has seen a great deal of investment in recent years with more bars, restaurants and shops opening in the centre. The character, vibrancy and diversity of the city is what makes it so appealing. The Lamb & Flag is a superb example of a historic pub and we are confident it will generate plenty of interest.” A St John’s College spokesman said: “The pub has been an integral part of the college’s history for more than 400 years. Our vision is to ensure the continuation of this wonderful pub through an agreement that allows the new operator freedom to develop the business with our support.”

Jurys Inn opens Southampton hotel for Leonardo brand’s ninth site: Jurys Inn has opened the Royal Hotel Southampton Grand Harbour as a ninth site for its Leonardo Hotels brand. Formerly called the Grand Harbour Hotel, the venue offers 173 bedrooms and suites and the city’s only Marco Pierre White Steakhouse Bar & Grill. The newly named Royal Bar offers food all day, while the hotel also features 13 meeting and events spaces, including the 500-capacity Mayflower function room, a leisure centre and swimming pool. Jason Carruthers, managing director of Jurys Inn and Leonardo Hotels UK and Ireland, said: “We are thrilled to expand our UK portfolio with this renowned hotel.” Leonardo is a recent entrant into the UK market, with six hotels in Scotland and others in London Heathrow and Manchester. It also has 150 properties in major European cities in Germany, Spain, Italy, Austria, Switzerland, Belgium, the Netherlands, Hungary, Poland and the Czech Republic.

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