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Morning Briefing for pub, restaurant and food wervice operators

Fri 22nd Mar 2019 - Propel Friday News Briefing

Story of the Day:

GDK signs franchise deals to launch more than 100 sites in Saudi Arabia and the US: German Doner Kebab (GDK) has signed a franchise deal to open 100 stores in Saudi Arabia in the next ten years, while it has also struck a separate partnership to launch stores in the US. The Saudi development agreement sees Ajlan & Bros Group, which has estimated assets of $2.9bn, become master franchisees in the kingdom. Ajlan & Bros Group has secured its first property and will open its debut GDK site, in Riyadh, during the first quarter of this year. Ajlan & Bros Group has interests in retail, manufacturing, real estate, tourism and transport, with brands in its Saudi portfolio including Hugo Boss, Puma, Nike, Adidas and Reebok. GDK has also teamed up with Texas-based businessman Tanweer Ahmed, who operates 153 sites for KFC, 58 for Pizza Hut and 24 for Mexican restaurant brand Taco Bell in the US. Ahmed has signed up to open an initial 12 GDK branches in Houston, Dallas and Las Vegas, which will be rolled out during the next two years. He also intends to expand the brand further across Texas and Nevada. GDK global chief executive Imran Sayeed said: “We are forging partnerships with some of the biggest players in the global food franchise sector and currently have between 30 and 40 units under development in six countries.” In the UK the group has opened 33 sites in two years, with a store slated to open every fortnight during 2019. Sayeed said: “We have an aggressive pipeline for the UK, with more than 350 units already sold. Internationally, we expect to grow just as quickly.” GDK also operates stores in Bahrain, Dubai, Oman, Sweden and United Arab Emirates, with sites also planned for Canada.

Industry News:

Propel insights editor Mark Wingett to look at what’s next for Tasty: Propel insights editor Mark Wingett will ask what’s next for Wildwood operator Tasty in his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (22 March) at 5pm. He will also look at what it takes to lead a business in the current climate, talking to the heads of some of those businesses that appeared on the Sunday Times Best Companies To Work For 2019 list. On the same day, subscribers will also receive a 30-minute video in which JD Wetherspoon founder Tim Martin talks to Paul Charity about the eight business books that have shaped his business philosophy. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, access to our database of 1,300 multi-site companies, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from Mark Wingett. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Belu Water passes £4m milestone for restaurant water filtration initiative: Social enterprise Belu has passed the £4m milestone for donations to charity WaterAid through its water filtration initiative with restaurants. Belu Water provides restaurants with a free filtration system. In return, restaurants agree to raise voluntary £1 contributions from customers for unlimited still or sparkling filtered water, with 100% of profits donated to WaterAid. In 2018, Belu Water gave a record £1m to WaterAid to help provide people in some of the world’s poorest communities with clean water and decent sanitation. Belu Water chief executive Karen Lynch said: “In a world where resources are under increasing pressure, the Belu Filter Initiative is a great example of how seamlessly integrating what used to be corporate social responsibility into a business operating model can deliver impact that changes lives for good.” WaterAid chief executive Tim Wainwright added: “We all have a role to play in making clean water, decent toilets and good hygiene normal for everyone around the world. Businesses of all sizes are crucial in bringing about the step change needed to meet this global challenge.” More than 30 restaurants, cafes and hotels in the UK have signed up to the initiative.

UK hotel market sees significant revpar slowdown in February: The UK hotel market has seen a significant slowdown in revpar after falling 0.9% in February compared with growth of 1.4% in January and 5.8% in December, according to Morgan Stanley’s latest Global Hotel Revpar Tracker. Occupancy fell 0.2% in February compared with 0.1% growth in January, while room rates declined 0.6% versus a 1.4% increase in January. In London, revpar grew 1.8% in February compared with 5.5% in January and 11.6% in December, with occupancy growth of 0.6% and room rate growth of 1.2%. Regional revpar fell 2.7% in February versus a 1.8% fall in January and 0.4% growth in December, with a decline in occupancy of 0.5% and a 2.2% decline in room rates. The midscale and economy segment, in which Whitbread’s Premier Inn operates, saw revpar fall 2.9% in February compared with a 1.3% drop in January and growth of 1.6% in December, with 0.7% occupancy growth offset by a 3.6% decline in room rates. European revpar growth weakened in February with growth of 2.2%, compared with 4.4% the previous year. The revpar increase was driven by room rate growth of 1.7% (2.7% in January), while occupancy grew 0.4% (the same as January). The US saw revpar growth slow to 2.6% from its 2.8% increase in February last year, while revpar growth weakened significantly in the Asia-Pacific region with an increase of 1.4% in February, down from 3.2% the year before.

Company News:

East Anglia Pub Co acquires sixth site: East Anglia Pub Co has acquired its sixth site, the Ship Hotel in Leigh-on-Sea, Essex. Director Paul Barthaud said: “We are proud to be new custodians of the Ship and look forward to reopening the hotel in all its glory in early 2020.” Chris Rogers, of Everard Cole, which brokered the deal, added: “The Ship is a great site and a number of attractive offers were received. It is an excellent addition to East Anglia Pub Co’s portfolio. We look forward to seeing the transformation next year.” East Anglia Pub Co also operates The Peterboat and The Bellhouse in Leigh-on-Sea. Its other pubs, all in Essex, are The Hamlet Court and The Trading Room in Westcliff-on-Sea, and The Exchange in Southend. Its website states: “The East Anglia Pub Company is a family run business benefiting from more than 100 years’ experience and roots that originate in the East End of London. Our traditional pubs are based on friendship, community and family values.”

Flat Iron Square founder to launch eating, drinking and arts space in London Bridge: Flat Iron Square founder Benj Scrimgeour is to launch an eating, drinking and arts space in London Bridge next month. Vinegar Yard will open in St Thomas Street on Wednesday, 3 April offering street food traders, bars, pop-up shops, art installations and large indoor and outdoor spaces with seating for hundreds of people. Open seven days a week from “super early until late”, the rotating food line-up will include My Million Pound Menu winners Baba G’s, which accepted a £300,000 investment offer from Atul Kochhar on the BBC show and operates at Pop Brixton and Camden Market. Vinegar Yard will also see The Gentlemen Baristas open its eighth coffee shop in the capital, joined by Argentinian-inspired steak and chimichurri brand Up In My Grill, which operates at three Street Feast sites (two seasonal), and gravy-dipped burger concept Nanny Bill’s, which operates residencies in Dalton and Boxpark Wembley. Other confirmed traders are Sugo (Italian ciabattas) and Borough Market fruit and vegetable brand Turnips. There will also be an open-air bar offering draught beer and a rotating tap for London craft brewers. The site will feature artwork by Joe Rush, known for his scrap metal sculptures at Glastonbury Festival. Vinegar Yard will also host a vintage flea market at weekends. Scrimgeour launched Flat Iron Square in Bankside in 2016 after taking over seven London Bridge railway arches and grade II-listed Devonshire House. Flat Iron Square features 16 traders and an outdoor stage.

Giuliano Lotto returns to London to launch Latteria in Islington: Renowned restaurateur Giuliano Lotto is to launch his first London restaurant for seven years. Italian restaurant Latteria will open in Essex Road, Islington, later this month at a site formerly occupied by Tuscan deli concept Food Lab. Latteria’s website states: “Latteria is a cafe, restaurant and bar that draws inspiration from the pasticceria, panino shops and pizzerias in Milan. Open for breakfast, lunch, afternoon tea and aperitivo, everything from the morning pastries to pizza dough and hand-rolled fresh pasta is made in-house, with ingredients sourced from Italy.” Latteria, which means “dairy” in Italian, will join Lotto’s Il Baretto restaurant, which opened in Marylebone in 2008. He also opened Banca in Mayfair in 2012, which has since closed, while his portfolio also included La Petite Maison, which he launched in Mayfair with Peter and Arjun Waney. Lotto gave several world-famous chefs their start in the restaurant world, including Marcus Wareing, Gordon Ramsay and Giorgio Locatelli.

BrewDog launches hot-desking initiative: Scottish brewer and retailer BrewDog has launched a hot-desking initiative at six of its sites. The DeskDog spaces are available at its Brixton, Paddington and Shoreditch venues in London as well as Lothian Road in Edinburgh, Norwich and Sheffield. Remote workers can pay £7 for access to Wi-Fi, unlimited coffee and a pint of Punk IPA. DeskDog is the latest “bar experience” initiative from BrewDog. Earlier this month it launched Local Tap, which sees the company dedicate two taps in each of its 43 UK bars to beer exclusively brewed by local breweries. 

Larkin Cen to open fourth Bristol site: MasterChef finalist Larkin Cen is to open his fourth site in Bristol. Cen will launch a “robata stall” in St Nicholas Market offering Asian street food to go. He has yet to reveal exactly when and where the stall will launch but it is expected to be in a unit previously occupied by American-style barbecue restaurant Grillstock, which folded last year. Cen, who reached the MasterChef final in 2013, already operates two Woky Ko restaurants in Wapping Wharf – one of which opened last week – as well as a venue in Queens Road, Clifton, reports Bristol Live. Robata means “fireside cooking” in Japanese. It refers to a technique similar to barbecuing, with food cooked over charcoal. Cen opened Woky Ko: Kaiju at the Cargo 2 extension of Wapping Wharf last week and has brought in John Watson as head chef of the 40-seat venue.

Titanic Brewery lines up Newport site: Titanic Brewery is lining up a new site in Newport, Shropshire. The company has lodged plans with Telford & Wrekin Council to convert a former NatWest bank branch in High Street. Titanic Brewery said it had been searching for the “right building and location” in the Newport area for a “long time”. Internally, the footprint of the former bank will remain unchanged, with the exception of introducing a new part mezzanine floor, reports the Shropshire Star. A report submitted with the application, said: “With the loss of so many community pubs in the area, Titanic Bar Cafe will provide a new hub for locals and visitors.” Founded by Keith and Dave Bott, Titanic Brewery has been brewing beer in Burslem, Stoke-on-Trent, for more than 30 years. It also operates circa ten sites across Shropshire.

SSP Germany signs new contract with national rail firm: SSP Group, the UK-based transport hub foodservice specialist, is expanding its partnership with DB Station & Service in Germany after signing more than 60 new leases and extending existing contracts with the company. SSP Germany currently has 130 contracts in place with DB Station & Service, a subsidiary of Germany’s national railway company Deutsche Bahn. The latest deal will see SSP Germany invest heavily to expand its multi-brand portfolio, with activity at key locations such as Frankfurt, Hamburg, Hannover and Cologne. This will be complemented by new franchise brands from the quick-service sector and exclusive flagship projects with renowned television chefs. Under the new deal, SSP Germany has also signed a franchise agreement for ServiceStore DB – DB Station & Service’s convenience store concept. Jan Kamp, director of business development and properties for the SSP DACH region, said: “We are delighted our long-standing partner DB Station & Service values our brand portfolio and that our retail expertise will help to drive the ServiceStore DB convenience store concept forward.” Horst Mutsch, head of business development leasing at DB Station & Service, added: “We are about to embark on another chapter in our co-operation with SSP. Brand expertise and operational know-how make SSP just the right partner for our attractive stations.”

DUM Biryani founder to open Mayfair restaurant next month for second London site: Dhruv Mittal, a chef who has worked at The Fat Duck, Hibiscus and Sat Bains, is to open his second Indian restaurant in London. Mittal, who launched DUM Biryani in Wardour Street in November 2016, will open Lucknow Social in Mayfair’s Maddox Street on Tuesday, 2 April. The menu will take inspiration from India’s Lucknow region and its Awadhi method of cooking. Dishes will include kakori kebab spiked with cloves, black pepper and cinnamon; Awadhi chicken biryani; and lamb-neck korma. The lunchtime menu will feature quick bites to eat in or take away. The drinks list will be compiled by restaurant wine consultant and author Zeren Wilson and include a short wine list paired with the cuisine, while there will be a collaboration with Hackney Brewery. The playlist will feature “chilled beats and Urdu pop”, Hot Dinners reports.

Milton Pubs and Taverns shuts Haslingden site as it continues to shrink portfolio: Milton Pubs and Taverns, the company formed by real estate investment firm Aprirose when it acquired 73 pubs from Mitchells & Butlers (M&B) in 2017, has shut its site in Haslingden, Lancashire. The company has closed the Duke of Wellington in Grane Road and put it on the market. A spokesman told the Lancashire Telegraph: “Regrettably the Duke of Wellington has closed. It is unfortunate for the loyal, dedicated staff and customers but we believe it still offers a good opportunity for the right investor and it is up for sale.” It is one of several Milton Pubs and Taverns-branded sites across the country to close in recent months due to “changing trading conditions and a review of the portfolio”. In October, the company put 26 sites on the market and Propel understands about ten of those remain unsold. Milton Pubs and Taverns has also shut pubs in Leeds and Penarth since then.

Online beer distributor returns to Seedrs to raise £200,000 for international expansion: Online beer distributor EeBria has returned to crowdfunding platform Seedrs in a bid to raise £200,000 to expand internationally. The company, founded by David and Rachael Jackson and whose customers include BrewDog and Innis & Gunn, is running a convertible share equity campaign with a 20% discount. The pitch states: “We operate a unique market place model where beer, cider and other drinks are listed on the EeBriaTrade site by the producers who make them. They set the prices, control the imagery and descriptions, and manage the stock levels. When products sell, we use our nationwide network of fulfilment partners to collect the order from the producer and deliver it directly the next working day to the pub, bar, shop or restaurant. We have more than 500 producers actively listed on the platform and more than 3,500 active products at any one time. To our knowledge this is considerably more than any competitor using a more traditional warehouse approach. The proceeds would primarily be used to launch our international platforms. This is a combination of staff costs – new country managers and operations staff and significant growth of our in-house technology team to ensure the platform builds are completed quickly – while also continuing development of the platform and new features. We intend to increase headcount by ten over a couple of months. The proceeds will also be required to cover initial losses for the international platforms, with marketing spend as well as subsidies on early cross-border shipments while sales volumes are building to a critical mass.” In 2017, EeBria raised £750,000 on Crowdcube to support its growth having previously raised £288,000 on Seedrs in 2015.

Suffolk-based operator to open fish restaurant in Ipswich for second site: Suffolk-based operator Hasan Orman is to open a fish restaurant in Ipswich for his second site. Orman, who runs Huffers in Sudbury, will launch the Ocean Fish Basket in Upper Brook Street. He is transforming the former Browne’s men’s outfitters shop, which closed in August 2015, for his new venture. The 86-cover restaurant’s menu will include platters, fish kebabs and shellfish. Orman told the Ipswich Star: “I come from a fishing family. My grandfather was a fisherman and so was my father, and my uncle’s son still operates and fishes on the family boat. It has always been my dream to have a fish restaurant.”

Coffee#1 to open Cheltenham site next month: Coffee#1, which is majority-owned by Caffe Nero, is to open a site in Cheltenham next month. The company will open the outlet at a site in Montpellier Walk that was formerly occupied by Montpellier Lodge restaurant, which closed in May 2018, reports Gloucestershire Live. It marks the second opening for Coffee#1 under Caffe Nero’s ownership following a launch in Buckingham last month. Caffe Nero became the majority owner of Coffee#1 in January, when it acquired close to 70% ownership from Welsh brewer and retailer SA Brain. The brand currently has 93 sites. At the time, Caffe Nero founder and group chief executive Gerry Ford told Propel he sees potential to at least double the size of Coffee#1 in the UK.

Numis – TRG an ‘attractive buying opportunity’ after returning to growth: Numis leisure analyst Tim Barrett has said The Restaurant Group is an “attractive buying opportunity” with the company back in profit growth in the second half of its 2018 financial year. Issuing a ‘Buy’ note on the shares with a target price of 225p, Barrett said: “Growth in the second half of 2018 in profit before tax marks an important turning point. While The Restaurant Group’s profit before tax fell by circa £5m (7%) in FY18, that masked an important distinction between the 20% decline in the first half (minus £5.4m) and stability in the second half (up £0.5m, removing the £0.5m contribution from Wagamama). The like-for-like profile during this period was volatile but, for the second half as a whole, we estimate group like-for-likes were down 0.3% as the early part of the period was affected by the Fifa World Cup and abnormal weather. This is evidence that measures taken to offset cost inflation and restructure the leisure estate are starting to produce positive results and lacklustre sales growth has been no impediment to stabilising profits. The pubs and concessions businesses continue to operate in attractive growth markets and, in the case of the former, enjoy freehold asset backing (£148m). Acquiring Wagamama has diversified the business into a high-growth segment – in the three months to end of January, Wagamama grew like-for-likes 9.1% and Ebitda 19%. In aggregate, the three growth businesses account for more than 70% of outlet Ebitda, implying only £59m for the leisure division. We acknowledge this is only a source of advantage if the earnings in the structurally challenged leisure business can be stabilised with obsolete sites exited over time. The signs here are encouraging – 41% of the leisure estate has a lease end within five years, implying it will be able to continue to scale back this division and could exit 20 to 30 sites per annum. The market will need reassurance a new chief executive will be able to execute on the ambitious business case underpinning the acquisition. This is mostly based on self-help such as synergies (£15m), 16 site conversions, and expansion into delivery kitchens and grab-and-go formats. We are reassured Allan Leighton will become senior non-executive director at The Restaurant Group as he has been involved with Wagamama for four years (becoming chairman in 2015) and should offer welcome continuity and insight. The Restaurant Group’s share price is down 15% during the past three months and 43% below the level prior to the announcement of the acquisition of Wagamama in October. The £300m reduction in value since that time is equivalent to a 3.4 times Ebitda de-rating on the legacy TRG business and creates an attractive buying opportunity in our view.”

Barbecue star launches crowdfunding campaign to turn Suffolk bakery and cafe into debut restaurant: Barbecue food author and chef Christian Stevenson, aka DJ BBQ, is to launch a campaign on crowdfunding platform Kickstarter to turn a Suffolk bakery and cafe into his debut restaurant. Stevenson has partnered with David Wright, of Fire Station Café and the adjacent Cake Shop Bakery in Woodbridge, to turn the site into an all-day restaurant and cafe celebrating food cooked with fire. The venue will combine bread, coffee and wood-fired pizza with Stevenson’s burgers and barbecue dishes. The £75,000 campaign will launch on Thursday, 4 April on the day Stevenson publishes his third book. Stevenson is a live fire chef and pit master and has fronted shows for MTV, Channel 4 and Channel 5. His YouTube channel has 175,000 followers. He said: “This is an incredible opportunity for me to team up with David, who in my opinion is the best baker in the world. Combining his skill set with my knowledge of meat and fat gives us an unbeatable offer! I’ve been coming to Suffolk for five years to host Jimmy’s Festival and, staying with Jimmy Doherty and his family, I’ve come to love the area.” The Cake Shop Bakery was opened by Wright’s grandparents in 1946. Wright said: “Making the most of what we have and showing there is life in an established business is what we’ve done for more than 70 years. Now we must adapt, take some risks and go all in so the business is still going for my grandchildren to enjoy.”

Ei Group signs diversity charter: Ei Group has signed the Diversity in Hospitality, Travel and Leisure Charter, part of the Women in Hospitality, Travel and Leisure 2020 (WiH2020) campaign. The charter asks companies to commit to ten action points and encourages firms to set their own objectives and priorities within the field of diversity and inclusion while sharing best practice, collaborating on joint initiatives and participating in industry-wide surveys and projects. Ei Group chief executive Simon Townsend said: “We are determined to make a meaningful contribution to improving diversity and inclusion, not just within our business but across the wider hospitality industry.” WiH2020 founder Tea Colaianni added: “Ei Group has joined a group of pioneer companies determined to make a difference for the good of the sector as a whole.” Read more about the ten charter action points at

Manchester-based micro-brewer heading to new home with on-site taproom after outgrowing current base: Manchester-based micro-brewer and operator Marble Beers is moving to a new home with its own on-site taproom after outgrowing its current base. Currently brewing out of two railway arches in Williamson Street in the Green Quarter, the team is heading to a larger site at Boston Court in Salford. Plans have been submitted to the city council and a licence has been granted for the industrial unit and yard outside. The taproom will offer Marble’s core range as well as new, more experimental brews. Director Jan Rogers told the Manchester Evening News: “We needed more space. The production staff were tripping over each other and you couldn’t swing a cat in the office space.” The new brewery is expected to start production in April and the taproom is set to follow in May, subject to planning approval. Marble will continue to operate The Marble Arch pub, where the brewery started in 1997, and Northern Quarter bar 57 Thomas Street.

Marston’s scoops MIDAS awards: Marston’s scooped two accolades at the Menu Innovation & Development Awards (MIDAS). The company won best neighbourhood pub menu for its Village format, which is available across 48 pubs, while head of food category management Nicola Arrow became Marston’s first female winner of the head of food industry award. The accolade celebrates individual performance and experience in developing creative menus. Claire Yates, assistant menu development manager for Village, said: “This award is an amazing achievement to everyone who has been involved with Village – from the team at head office that creates and develops the offer to the operators who bring the menu alive in their pubs.”

Vue to launch Eltham cinema next month: Vue is set to launch its cinema in Eltham, south east London, next month. The cinema will open in High Street at the end of April as Vue’s 91st site in the UK and Ireland. The venue will offer six screens and 857 seats in a mix of standard and VIP options. The project is part of the large regeneration of Eltham High Street to turn it into an entertainment destination and stretch its popularity into the evening. PizzaExpress and Nando’s are due to open restaurants at the complex, while there will be a Sky Bar on the first floor of the cinema, News Shopper reports.

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