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Morning Briefing for pub, restaurant and food wervice operators

Tue 28th May 2019 - Propel Tuesday News Briefing

Story of the Day:

Wadworth puts 24 tenanted sites on the market: Devizes-based brewer and retailer Wadworth has put 24 of its tenanted pubs on the market, Propel has learned. Wadworth is selling nine pubs on an individual basis and 15 as part of a package. The company said the sites “no longer fit our long-term plans”. The nine individual sites, which are being marked under Project Swordfish, are located across the south and west of England. They are The Black Dog in Salisbury, Wiltshire; the Butchers Arms in Stroud, Gloucestershire; Clifton Wine Bar in Bristol; The Haw Bridge Inn in Tirley, Gloucestershire; the Linden Tree in Gloucester; The Queens Arms in Chew Magna, Somerset; The Sun In The Wood in Ashmore Green, Berkshire; The Teddy Rowe in Sherborne, Dorset; and The Yew Tree in Conderton, Gloucestershire. The package of 15 pubs consists of Beckets Inn in Glastonbury, Somerset; The Boot Inn in Berwick St James, Wiltshire; The Cricketers Inn in Longparish, Hampshire; The Crown Inn in Bishop Cannings, Wiltshire; England’s Glory in Gloucester; the New Inn in Bath; The Oak in Andover, Hampshire; The Plough in Shalbourne, Wiltshire; The Princes Motto in Barrow Gurney, Somerset; The Royal Standard in Yeovil, Somerset; The Ruishton Inn in Ruishton, Somerset; The Tall Ship in Gloucester; The Victoria in Westbury On Trym, Bristol; the Woodbridge Inn in North Newnton, Wiltshire; and The Yellow Wagtail in Yeovil, Somerset. Wadworth chief executive Chris Welham said: “Every year we undertake a review of our pub estate to look at opportunities to transfer pubs between our managed and tenanted divisions, acquire pubs in our heartland or sell parts of the estate we no longer believe fit our long-term plans. This year has been no different and we undertook this review in January. One of the outputs of this review was to consider the sale of a small package of pubs from our tenanted business. As a result, we have identified 24 sites we believe aren’t suitable for us to retain long-term. We have therefore decided to take the opportunity to offer these pubs to the market now – nine as individual properties for sale and 15 as part of a package. Having informed all the affected business partners who operate these pubs, we have engaged Christie & Co to market this package of pubs on our behalf.”

Industry News:

New speaker revealed for Propel Multi Club summer conference, two free places for operators: Antony Hunt, managing consultant in innovation at CACI, has been added to the speaker line-up for the Propel Multi Club summer conference and party. Hunt will provide a review of the food and beverage sector and what it takes to deliver the right proposition, to the right customers, in the right location to make a profit. The event takes place on Thursday, 27 June at the Oxford Belfry, which is just off the M40. Hunt will be joined by The NPD Group insights director Dominic Allport; Ted Kennedy, owner of Pebble Hotels and veteran operator of pub assets; Three Joes co-founder Tim Hall; Las Iguanas chief executive Mos Shamel; Remarkable Pubs managing director Elton Mouna; Think Hospitality founder James Hacon; Mario C Bauer, AmRest brand ambassador, Curtice Brothers co-founder and WhiteSpace partner; The Glee Club founder Mark Tughan; Graffiti Spirits Group founder Matt Farrell and Crepeaffaire founder Daniel Spinath. The conference will be followed by the summer party, with an evening barbecue, the Big Fat Quiz and the legendary sounds of DJ Big Lee. Operators can claim up to two free places by emailing Anne Steele at Rooms (bed and breakfast) are also available at £125 plus VAT and can be booked by emailing Anne.
Peter Backman – US restaurant market mood ‘subdued’ with focus on containing costs rather than growth and innovation: Industry analyst Peter Backman has said the mood of the US restaurant market is “subdued”, with operators focusing not so much on growth and innovation but more on costs, particularly in terms of staffing. Backman said the market was mature and going through a “period of adjustment” to a new economic and political landscape. Writing in his What’s Hot In The USA 2019 report following this year’s National Restaurant Association Show, Backman said operators had reasons to be confident but remained fretful. He said: “Disappointingly, unlike previous years the mood was underwhelming. On the one hand there’s growth in the restaurant market but on the other the regular spirit of enthusiasm among US suppliers and operators is subdued. Why? First, growth. Over the past year growth has hit about 3.5% to 4% but strip out inflation and there’s real growth of 1% at very best, which is disappointing after several years of anaemic growth. While top-line growth has been positive but not at all exciting, costs have risen. Food costs have increased especially and are now causing concern but the number-one issue keeping senior restaurant operator executives awake at night is labour, especially the lack of it resulting from recent, sometimes capricious laws on immigrant entry (and immigrants, as in the UK, account for a significant proportion of employees in the foodservice sector). The result is the cost of labour in the restaurant sector is rising and growing faster than the cost of labour in the private sector as a whole. In summary, restaurants in the US generally seem content but the headwinds are palpable and appear to indicate the industry is going to struggle in top-line growth and profitability – somewhat like the UK, in fact.” Backman also pointed out that delivery in the US has a “different flavour” than in the UK – at least for now – while dark kitchens weren’t a “topic of intense discussion yet”. Backman added: “The outlook isn’t exciting. Overall, operators and suppliers are positive but realistic.”
Tim Martin – listening is the key to business success: JD Wetherspoon chairman Tim Martin has said the key to business success is to listen. Martin said: “Successful businesses depend above all on quality of decision-making. Good decisions, in turn, depend on a system that encourages ideas and criticism. Business commentators tend to overemphasise the influence of big, ground-breaking ideas dreamt up by shoot-from-the-hip chief executives. Big ideas have their place but, in reality, long-term success almost always stems from the cumulative effect of thousands of suggestions for small improvements, emanating from the shop floor and implemented weekly or even daily. A key personality trait in business is understanding the cumulative knowledge of employees and customers is far greater than that of the top brass. In my experience, ideas that emanate from experts in ivory towers are often wrong and need to be tested in the fiery crucible of common sense and public knowledge. A way must be found to tap into the pool of public knowledge and sift through and implement the best ideas. This enables businesses to move forward rather than sinking slowly into the mud of obsolescence and changing tastes and fashions. Wetherspoon’s method of adopting the best ideas includes the top brass spending a couple of days a week visiting our pubs to speak to staff and customers – preferably alone and unannounced for maximum exposure. A huge number of the improvements we’ve made over the years stem from these visits. We also encourage staff to make suggestions and we try to be as receptive as possible to criticism from every corner. Suggestions and criticisms are reviewed at a weekly meeting I attend with senior colleagues along with a changing rota of pub managers and staff – and we try to select the best ideas to run with. It’s not rocket science, but somehow it works.” The full article will be published in the Wetherspoon News magazine, which is out in Wetherspoon pubs from Saturday (1 June).
Mark Wingett – Jamie's Italian sites have a combined price tag of £2.15m: Propel insights editor Mark Wingett has revealed the high rent levels and sharp like-for-like sales decline across the Jamie's Italian estate currently being marketed by agent Christie & Co. Writing in Friday's (24 May) Premium Opinion, he commented: "I understand for full-year 2018, total sales stood at almost £60m but a third of that was generated by the sites at Gatwick. While some of the group’s sites were still producing healthy annual sales – Covent Garden Jamie’s FY18 sales stood at £4.3m as tourists were still attracted by the Oliver name – those in the regions were suffering. While Oxford FY18 like-for-like sales declined 24%, there were declines during the same period of 26% at Jamie’s Italians in York, 12% in Liverpool and 14% in Cardiff. I imagine those numbers haven’t improved dramatically since. In the past 12 months Oliver’s name has also been spread thinner as he signed deals with Shell, Aramark and SSP, and what was once special was further diluted at a time when focus was required on the core. Rents attached to the list of sites that closed after falling into administration make painful reading – Jamie’s Italian Edinburgh is on a current rent of £303,600, Oxford circa £273,000 and Manchester about £307,000. Christie & Co has been given the mandate to sell the leases but I understand many landlords have already started to take them back to seek their own tenants – there should be some good deals to be had. The leasehold interests of 20 sites Christie & Co is marketing – 18 Jamie’s plus Barbecoa Piccadilly and Fifteen London – have a combined price tag of circa £2.15m." Propel Premium subscribers receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular video recordings of key speakers. They also receive access to our database of multi-site companies, which has now grown to 1,400 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Company News:

TRG launches Indian delivery concept: The Restaurant Group (TRG), the Wagamama and Frankie & Benny’s operator, has launched a new delivery brand called Pyjama Hotel, Propel has learned. Propel understands TRG has taken space at the Foodstars unit in Battersea to produce the new Indian-style concept, which can be ordered through Just Eat or UberEats. Pyjama Hotel is describes itself as offering “a festival of Indian flavours, bringing colourful, vibrant, Indian favourites and new dishes to your door”. Propel understands TRG is also working on a further concept, which has the working title Jumping Pans. TRG already operates a number of virtual brands out of its Frankie & Benny’s and Chiquito estates, including Burger Burger and Kick Ass Burrito. Wagamama also operates out of the Deliveroo Editions site in Battersea. Earlier this year, it was revealed City Storage Systems, the delivery company run by former Uber boss Travis Kalanick, had acquired London “dark kitchens” company Foodstars last year. Foodstars, which was founded in Bethnal Green in 2015, now operates kitchen spaces across London, which it leases to restaurants focusing on selling food through delivery apps.
Westbourne Leisure reports turnover and profit boost: West Midlands-based pub, restaurant and hotel operator Westbourne Leisure has reported a boost in turnover and profit. The company saw turnover rise to £18,755,863 for the year ending 30 September 2018, compared with £18,212,487 the previous year. Pre-tax profit increased to £4,297,083, compared with £3,239,601 the year before, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “During the year the company continued its expansion into the hotel sector and is looking to expand its presence in this market even further over the coming years.” Westbourne Leisure was established in the 1970s when Pat and Mary Owens bought their first pub – The Greenway Arms in Small Heath, Birmingham.
Domino's franchisees call in KPMG to audit advertising fund: Domino's UK franchisees have increased the pressure on company bosses by hiring auditors to look into how Domino’s spends millions of pounds of advertising money, the Sunday Times has reported. The newspaper stated: "Domino’s Franchise Association, which represents about 90% of the 67 operators in the UK and Ireland, has recruited KPMG to study the chain’s ‘national advertising fund’, which is invested on their behalf. Franchisees must pay 4% of sales into the fund, which amounted to £50m last year. The company says the money goes into advertising and promotion to build the brand. The franchisees want to see how it is spent. Domino’s has agreed to co-operate with KPMG, but it has been accused of dragging its feet by the operators." Domino's franchisees claim increased costs, such a business rates, have meant their share of the profit pie has dropped from about 66% to 50%. 

Adventure Experience puts adventure golf portfolio on market: Adventure Experience has put its portfolio of four adventure golf locations and two development sites up for sale. The adventure golf courses are Pirate Cove in Kent, Jurassic Falls & Altitude Adventure in north east London, Dinosaur Escape in Middlesex and Dinosaur Safari in Hertfordshire. The development sites are in north west London and the East Midlands and have the capacity to accommodate 18-hole adventure golf courses. Adventure Experience director Ed Haddon told Insider Media: “We have undertaken extensive analysis of locations around the UK we know will work for the adventure golf model and have secured an important base of sites around the M25. With our conservative approach to roll-out, we believe the business is well positioned for a new owner or owners to further develop the business, either as a standalone business or ‘bolt-on’ to an existing mini-golf/leisure operation.” Christie & Co is marketing the sites on behalf of Adventure Experience.
Shropshire-based Craft & Jam acquires fifth site: Shropshire-based Craft & Jam has acquired its fifth pub. The company has acquired the Seven Stars in Beckbury, near Shifnal, in a deal brokered by agent James A Baker. Craft & Jam is known for its craft beer, live music and food, and Seven Stars will feature a part American smokehouse, part British pie house offering. The pub in Madeley Road will undergo a refurbishment including the creation of an open plan trading space incorporating an external bar to serve food outside. The pub is expected to reopen at the end of July or early August. Amy Potter, of James A Baker, who brokered the deal, told The Business Desk: “We are pleased to secure the sale of the property on behalf of our client to an experienced local operator, which will be investing in the site and securing its long-term future.” Craft & Jam operates The Malthouse and The Swan Taphouse, both in Ironbridge; The Last Inn in Newport; and The Bulls Head in Rodington, between Shrewsbury and Telford.
Derby Brewing Co takes on Star Pubs & Bars site for fifth venue: Derby-based brewer and retailer Derby Brewing Co has acquired its fifth site. The company is taking on The Corner Pin in Chellaston, which belongs to Heineken-owned Star Pubs & Bars, but has been closed since January. The high-street pub will be renamed The Cruck & Barrel, with a major joint refurbishment due to start next month. Derby Brewing Co managing director Paul Harris told Derbyshire Live the new name reflected the building and the fact it will be run by a local brewing company. A Star Pubs & Bars spokesman said: “We are delighted to confirm Derby Brewing Co is taking the lease for The Corner Pin. To mark the new direction, the pub will be renamed The Cruck & Barrel. The cruck refers to the pub’s distinctive cruck-shaped gable end and the barrel will reflect the pub’s and Derby Brewing Co’s focus on outstanding beer.” Derby Brewing Co’s other sites are The Tap beer and spirit house, and smoked food and craft house concept The Greyhound, both in Derby; The Kedleston Country House – a bar, restaurant, boutique hotel and wedding venue in Quarndon; and The Pig in Lichfield, Staffordshire. The company is also due to open The Hole In The Wall micro-pub in Derby.
Matt Healy to open Leeds gastro-pub for third site: Matt Healy, runner-up in MasterChef: The Professionals, is to open a gastro-pub in Leeds for his third venture. Healy and his Seventh Course business will take over the reins at The Beehive in Thorner. The group has previously opened restaurants Matt Healy X The Foundry, which launched in the city’s South Bank area in May last year, and Grön Kafe in Oakwood, which began trading in September. Healy told Insider Media: “This is such an exciting time for us at Seventh Course and we’re so proud of the success our restaurants have achieved in such a short time. We’ve been working on our business plan behind the scenes for several years and to see it come to fruition is fantastic. The people of Leeds have been so supportive and it’s their feedback and encouragement that motivates us to keep pushing ourselves. The Beehive is a well-known name in north Leeds but we’ll shift the concept towards a gastro-pub feel within a beautiful village pub, serving simple pub classics with a modern twist and hopefully creating a welcoming, friendly venue that will become a hub of the community.” Healy was runner-up on the 2016 series of MasterChef: The Professionals.
International cyber cafe brand Wanyoo to open second UK site, in Coventry: International cyber cafe brand Wanyoo is to open its second UK site, in Coventry. Wanyoo, which has more than 1,000 cafes across China, entered the European market in January by opening a site in Charing Cross Road, London. Now it will double its UK presence with a venue at the Cathedral Lanes development in Coventry. Wanyoo, which also has sites in Australia, the US, Canada and Singapore, has agreed a new 15-year lease for a 3,911 square foot unit with Cathedral Lanes owner Shearer Property Group. Wanyoo UK director Zhaorong Chen said: “We have gone from strength to strength in Chinatown London and now, with an established student community, we can’t wait to bring this concept to a whole new customer base in Coventry.” Shelley Sandzer acted for Wanyoo, while Savills advised Shearer Property Group.
Papa John’s founder cuts stake to 18.9%: Papa John’s founder and former chief executive John Schnatter has trimmed his stake in the company from 30% to less than 19% as he continues to sell shares. Having stepped down from the board in March following a settlement with Papa John’s, Schnatter has now reduced his holding to 18.9%, although he remains the largest individual shareholder, reports Nation’s Restaurant News. According to a Securities and Exchange Commission (SEC) filing, Schnatter sold about 3.4 million shares worth circa $157.4m at an average of $45.62 each. Schnatter began shedding his shares in the company earlier this month when he sold 114,061 shares worth about $6m or 1.1% of the total 9.9 million shares he owns. Although analysts believe he is likely to sell more shares in the future, the SEC filing indicates he will not be doing so over the next 90 days during a “lock-up period”.
Real Eating Company to double up in Chichester next month: The Real Eating Company is to open a second site in Chichester next month, taking over EAT in North Street in June. EAT was bought by Pret A Manger, which has begun turning many of the stores into “Veggie Prets” across the country, but a spokesman for the brand said Pret “didn't need another store in Chichester”. Helena Hudson, owner of the Real Eating Company, said: “We love Chichester and after eight years in the city we’ve been on the look-out for the right place to complement our East Street cafe for some time. We know the building has very fond memories for a lot of locals and as an independent and local business ourselves, we feel we can give 78 North Street the love and attention it deserves. We are very much looking forward to welcoming new and existing customers and really value the support that Chichester has given to an independent business like ours.”
Former Palomar head chef to lead kitchen at Iranian concept launching in Covent Garden: Former Palomar head chef Jeremy Borrow is to lead the kitchen of Iranian concept Nutshell, which is set to launch in Covent Garden. The restaurant is due to open in St Martin’s Lane in July led by husband and wife Mohammad Paknejad and Marwa Alkhalaf. It will focus on bread, brining, pickling, drying and fermentation. The venue will accommodate 80 diners over two floors, featuring an open kitchen with counter dining on the ground floor and a semi-private first-floor space for larger groups to book, Hot Dinners reports.
Dutch-inspired artisan chip shop concept Chip’d to open second site: Dutch-inspired artisan chip shop concept Chip’d is set to open its second site. Founder Andrew McKechnie took inspiration from “twice-fried” chips and sauces served in the Netherlands to launch the concept in Chester. Having opened the first premises in Northgate Street, McKechnie will launch a second site, at the Dockside Dining Club on Pier Head in Liverpool, reports Insider Media. Chip’d uses a “chip, flip, dip” cooking process. Each portion of chips is made to order using fresh potatoes that are chipped by hand. Once fried, they are flipped in sea salt and served in a cone with a range of dips.
Elystan Street co-owner launches new concept in Holborn Town Hall: Rebecca Mascarenhas, who co-owns Elystan Street, Kitchen W8 and Sonny’s Kitchen with chef Philip Howard, has launched new concept Gezellig in Holborn Town Hall, central London. Mascarenhas has teamed up with Wieteke Teppema, Graham Long and James Comyn, who between them have worked at renowned restaurants such as The Square, Elystan Street, Pied à Terre, L’Autre Pied and The Ledbury. Gezellig is set across two floors, with the grade II-listed space featuring button-backed leather banquettes, wingback chairs, walnut tables and hardwood floors. The main dining room has space for 50 guests and counter dining for 15 more. The bar is on a mezzanine offering drinks and snacks, while there are two private dining rooms on the ground floor. Long’s menu includes snacks such as crispy veal sweetbread slider with truffle coleslaw, while larger dishes include roast loin of suckling pig with crispy belly and braised shoulder. Comyn told Hot Dinners: “As much as Gezellig will be about great food, we also want to craft a bit of a drinking den.” Wieteke, a former head sommelier and wine buyer at Viajante, added: “The odd orange wine may also find its way on to the list and we are looking at lots of fine wine – but without the high price tags.”
Chef Martin Milesi returns to Kensington for pop-up ahead of debut restaurant launch next year: Argentinian chef Martin Milesi is returning to South Kensington for a pop-up ahead of opening his debut restaurant in London next year. Milesi will stage Tu – Spanish for “you” – at Refettorio Felix in St Cuthburt’s Church – the home of Massimo Bottura’s Food For Soul project. The residency will run weekly from Thursday, 6 June until Thursday, 25 July and draw inspiration from the cuisine of Latin America, providing an insight into Milesi’s upcoming restaurant concept Tupa. It will be an all-day restaurant with an art gallery promoting artists and musicians from Latin America. Tupa will also be the new home of Una – Milesi’s one-table experience based on private dining rooms – that he has run periodically since 2014. The menu at Tu will include chicharron con salsa verde and Argentine beef with homemade mustard. The pop-up will feature three communal tables and Milesi and his team will collaborate with Refettorio Felix for its main purpose, which is to provide a lunch service for homeless and people in need with surplus food delivered by the Felix Project.
BrewDog unveils new food philosophy: Scottish brewer and retailer BrewDog has unveiled its new food philosophy and said more than half its menu is now vegetarian, while more than one-quarter is vegan. The company stated: “This decision to offer a menu with more than 50% vegetarian or vegan options was one made with our community of shareholders and customers. Because our Equity Punks are involved in everything we do, we invite them to work with us to design menus for our bars. We are also delighted to share our new food philosophy, which is now printed on the front of our menus. We proudly serve farm-to-table ‘junk’ food in our bars and can trace each ingredient back to the source. We take as much care about this as we do when preparing them. As beer lies at the centre of everything we do, every item on our menu is designed to pair with our craft beer – and many feature beer as part of the dish. We believe in bold flavours in our beer and bold flavours in our food.”
Mediterranean restaurant and bar concept to launch in Birmingham: A Mediterranean-inspired restaurant and bar is to open in Birmingham this week. Gjerji Devollaj and Sabi Ukaj will launch Noel’s Bar & Restaurant in Waterfront, next to The Cube, on Saturday (1 June). The 90-cover, 2,200 square foot restaurant will feature a private dining room, open kitchen and charcoal grill. The menu will include hand-picked cuts of meat and freshly made pasta. Devollaj said: “We want to replicate the style, sophistication and quality of the Mediterranean in Birmingham. The city has a thriving food and drink scene and we’re proud to be part of that.”
Former Mr Fogg’s manager heads new bar in Trafalgar Square: Former Mr Fogg’s general manager Marco Ercolano is heading a bar that has opened in Trafalgar Square. Rockwell has launched at the Trafalgar St James hotel in Spring Gardens inspired by the 17th and 18th centuries. Ercolano, who has also worked at The Ritz, combines “exotic imports with traditional English spirits”, while the bar food menu includes marinated chicken skewers with lemon and herbs. Ercolano said: “The hotel and its surrounding area are so rich in history we drew on British heritage when devising the menu too. The bar is a plant-filled hideaway where guests can sip on botanical cocktails and escape reality.”
The 15 Group offers ‘sensory food experience’ at Dash with new summer menu: Liverpool-based The 15 Group has launched a summer menu at its Dash restaurant offering a “sensory food experience”. Executive chef Lee Evans, who was brought in from East Coast Concepts last month, has created seasonal dishes that come with added theatre, including small and large plates served in a cloud of aromatic smoke and dry ice. Evans said: “We want people to leave us feeling they haven’t just had a beautiful meal, they’ve had two hours of adventure. The whole menu has been designed to have a sense of vibrancy because we want our dishes to match the stunning decor of the building.” The menu includes Sichuan duck, which is delivered smoking under a cloche, and Cantonese lamb skewers.
Three west London hotels go on market: Three west London hotels have been put up for sale. The Seraphine Hammersmith Hotel, Sure Hotel Collection by Best Western; the Seraphine Kensington Olympia; and the Holiday Inn Express London Ealing are being marketed by agent Christie & Co. The group offers investors a mix of branded and unbranded hotels, with the Ealing and Hammersmith locations operating under IGH and Best Western brands respectively, whereas the Kensington location currently trades as an independent hotel and therefore provides rebranding and repositioning opportunities. Justin Davies, senior broker at Christie & Co, said: “We are delighted to bring this unique collection of London hotels to market and believe this group will appeal to a range of domestic and foreign investors looking to acquire well-performing assets in key trading locations.” Christie & Co is inviting offers on a group, sub-group or individual basis.

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